While some producers may have a problem with the assumptions, such as the $5.68 spring guarantee price, use a different figure to see how that changes your guarantee. Lower cash rent will also change the amount needed for coverage. However, Schnitkey says, “In many situations, the highest coverage level will not provide a guarantee above the total costs of production.”
The majority of farmers may select Revenue Protection as their crop insurance tool for protecting profitability in 2013, but selection of coverage level will determine how far it can go. The spring price guarantee has not yet been determined, and will not be for another month, however, fading prices in the corn market could push the guarantee to levels below what is needed to cover reasonable production costs.
Source: FarmGate blog