New Year: A Toast to Your Grain Marketing and Crop Insurance Plan
China’s livestock industry is in overdrive, and U.S. domestic grain buyers have no choice but to remember what Iowa’s 2020 windstorm did to the grain supply. Put these factors together and 2021 will be a year when the market will likely provide you with profitable ways to sell your grain.
But you need to be strategic and take time to plan. With the turn of the calendar coming up, now is a great time to look at your marketing strategies. Think of your crop insurance as, first, your financial backstop, then second as a central and important part of your marketing plan.
If this makes you anxious, you’re not alone. Finding the right professionals to ask questions and navigate the market complexities can help you achieve your goals.
In the latest episode of In The Driver’s Seat, listeners get a brief overview of the current grain marketing landscape and learn about some new crop insurance products from Brian Wiggins, a Crop Risk Specialist for ADM and Jon Scheets, a National Sales Manager for Crop Risk Services (CRS).
Below are some of the revenue-based crop insurance products offered by CRS, an Approved Insurance Provider (or AIP) that has partnered with ADM for more than a decade:
- RevNet: Allows a producer the opportunity to lock in a price for their upcoming crop insurance policy using two-week pricing windows starting July 1st and running through February 15th. This price will replace the February Spring Price or October Harvest Price when determining your revenue guarantee if it is higher than both the Spring and Harvest prices.
- RevBoost: A buy-up option that allows at least 5 percent up to an additional 10 percent coverage of guaranteed bushels, based only on the February average.
- RevMax: This attaches to the RevBoost to give additional discovery windows. In addition to the February average, the producer has four two-week windows in June and July to set a better bushel price for indemnity payouts, if any of the prices average higher than the February price.
- ECO (Enhanced Coverage Option): This is a federally backed product, so if you have an RMA plan covering 85 percent of your crop, an ECO can cover 86 to 95 percent at a county-based level.
- Spring Price Premium Contract: This offers a premium for an agreed upon number of bushels on top of the February average.
- Peril Coverage that includes Early Replant Options: These are becoming popular as more farmers are starting to plant soybeans earlier in the spring.
Based on your operation and its needs, you’ll want your own unique mix of products because every farm is different. Scheets, who is a farmer in Central Illinois, says he’s going to look outside the box for 2021 and 2022, which will include some buy-up opportunities, the RevNet policy again, and some early replant options because he loves planting soybeans early in the spring.
He adds, “If we look at where the market sits today, and we continue (these strong markets) into the winter months, I would challenge everyone to make sure they are exploring every opportunity that’s out there. There are going to be three or four new things on the table this year.”
Do you want to explore how to marry your grain marketing and insurance options to maximize profit opportunities in 2021? Reach out today to your ADM representative who can refer you to a Crop Risk Services agent.
ADM is providing this communication for informational purposes, and it is not a solicitation or offer to purchase or sell commodities. The recommendations in this communication do not take into account any particular individual’s or company’s objectives or needs, which should be considered before engaging in any commodity transactions based on these recommendations. The sources for the information and recommendations in this communication are believed to be reliable, but ADM does not warrant or guarantee the accuracy of the information or recommendations. ADM or its affiliates may hold or take positions for their own accounts that are different from the positions recommended in this communication. The information and recommendations in this communication are subject to change without notice.