How good is the 2013 crop insurance safety net?
The poorest safety net year was 2006, when the revenue guarantee was projected to cover only 78, 63 and 59 percent of soybean, corn and spring wheat total costs per acre, respectively.
It is important to note that the crop insurance revenue guarantee is not necessarily the minimum revenue that will be received per acre.
“In fact, it only is accurate if there is a complete crop failure,” Swenson says. “If there is any production, the revenue will be a combination of crop value and crop insurance indemnity (if any). Because of differences in the crop revenue insurance harvest price (determined by the futures market) used in the calculation of crop insurance indemnities and the local cash price the farmer actually receives when selling the grain, the actual revenue per acre typically is somewhat less than the crop insurance revenue guarantee.”