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Transcript

Crop Insurance Series: Changes · Professional Ag Marketing Podcast

• 0:01
  SPEAKER_00: Welcome to the Professional Ag Marketing Podcast.
• 0:04
  SPEAKER_00: If you want a deep dive into the ag markets and risk management strategies, your search is over.
• 0:10
  SPEAKER_00: Come here after every Friday to get your weekly commodity recap.
• 0:14
  SPEAKER_00: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 0:21
  SPEAKER_00: This is your host, Mike Minor.
• 0:22
  SPEAKER_00: Let's get started.
• 0:24
  SPEAKER_01: Welcome everybody to the Professional Egg Marketing Podcast.
• 0:27
  SPEAKER_01: I am your guest host today, Lucas Peters, and I'm kicking off our 2025 Crop Insurance Decision Time Series, where we're going to take five different topics and record a short podcast on each topic.
• 0:41
  SPEAKER_01: The topics this year we're going to cover changes and updates for the program for 2025.
• 0:47
  SPEAKER_01: We're going to take a podcast and look at ECO coverage in 25, the ARC PLC decision, some add-on private products for crop insurance in 25, and then review some of the government program payments that got announced at the end of the year that will be hitting the farm country here in 2025.
• 1:06
  SPEAKER_01: Thanks for joining us and let's get started.
• 1:14
  SPEAKER_01: And luckily, I guess in the world that we live in today, there are very few changes for the crop insurance program this coming year.
• 1:24
  SPEAKER_01: The biggest change is around the ECO coverage, where they increased the subsidy to 65%, which is making that coverage look pretty attractive this year with premium costs, roughly half of what they were last year.
• 1:39
  SPEAKER_01: But we'll spend an entire episode looking specifically at the ECO coverage.
• 1:44
  SPEAKER_01: Other changes for our basic revenue protection, yield protection programs were very minimal.
• 1:51
  SPEAKER_01: One of the changes was around unit structure on organic crops.
• 1:56
  SPEAKER_01: So if you are an organic person, you might want to contact your crop insurance agent and review some of the changes there.
• 2:03
  SPEAKER_01: Otherwise, it should be very similar to our decisions that we had last year.
• 2:07
  SPEAKER_01: If we look at our revenue protection products, kind of the most popular products sold on corn, soybeans, wheat across the country.
• 2:23
  SPEAKER_01: Of course, one thing with the revenue protection products that come into play is our prices.
• 2:29
  SPEAKER_01: So last year, 2024, we had a projected price on corn of 466 and soybeans were 1155.
• 2:40
  SPEAKER_01: As we kick off the 2025 crop insurance pricing period, which is going to start on February 3rd, Monday, February 3rd.
• 2:51
  SPEAKER_01: And what they'll do during the month of February for corn, they'll take a simple average of the daily closes of the December 2025 contract.
• 3:02
  SPEAKER_01: So it means the same time period except they're going to use the November 2025 contract.
• 3:08
  SPEAKER_01: And as we kick it off, I the corn price is real similar to where we were last year.
• 3:17
  SPEAKER_01: Slightly lower, but I would expect as we go through the month, if prices stay pretty flat, our price is going to be pretty similar to last year's price of$466, which is going to cause premiums and coverage to be very similar to last year as well, if you buy the same exact coverage.
• 3:37
  SPEAKER_01: Soybeans are a slightly different story.
• 4:10
  SPEAKER_01: So not uh great news on the beans.
• 4:12
  SPEAKER_01: How you know one thing on the soybeans that I've been getting asked is how do we get a few more dollars covered?
• 4:19
  SPEAKER_01: Um, the soybean market hasn't provided a real profitable price for 2025 production year yet.
• 4:27
  SPEAKER_01: And so, you know, buying up your crop insurance coverage is something to consider.
• 4:32
  SPEAKER_01: Uh, if you're already at uh that 80-85% coverage level, that's where we could look at adding uh the ECO coverage or or going uh into some additional coverages to cover more dollars.
• 4:44
  SPEAKER_01: Uh but right now it's going to be difficult to cover all your cost on the soybeans with the lower price.
• 4:51
  SPEAKER_01: Um we'll find out the uh the official prices where we for 2025, our projected prices at the end of February.
• 4:59
  SPEAKER_01: We'll get our volatility factors based on the last uh five trading days of the month of February, which of course will affect premium as well.
• 5:08
  SPEAKER_01: Current volatility is pretty low uh in the market, so uh that should help out premiums uh this year, too.
• 5:15
  SPEAKER_01: Um, of course, uh a lot can happen during the month of February, and there are a lot of moving parts in the market this year, so definitely stay tuned, watch those prices as we go through the month.
• 5:27
  SPEAKER_01: Uh, they will have a big impact on your coverage and premiums uh for 2025.
• 5:33
  SPEAKER_01: Generally, the program should be very similar.
• 5:35
  SPEAKER_01: Uh, we'll get our prices the end of February.
• 5:38
  SPEAKER_01: And if you do have questions on how uh your operation will look with coverage for the coming year, uh please reach out and we'd be happy to quote it or look at some options for you for this uh this growing season.
• 5:50
  SPEAKER_01: Thank you.
• 5:51
  SPEAKER_00: And thank you to all our listeners.
• 5:53
  SPEAKER_00: Please reach out to us at professionaleggmarketing.com.
• 5:56
  SPEAKER_00: Check out our other podcast as well, Professional Egg Marketing, that's released every Friday.
• 6:01
  SPEAKER_00: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 6:08
  SPEAKER_00: See you next time.