DTN Lead Analyst Todd Hultman said the deterioration of corn prices over the growing season will likely trigger payments on 85% coverage policies without a yield loss. At lower coverage levels, which usually range between 70%-80%, farmers will also likely need a yield loss to trigger a payment. For more detailed analysis on what combinations of yield and price will trigger payments, please read “Crop Insurance Looks to Pay Out in 2023” here: https://www.dtnpf.com/….
“This year, a lot of acres swung to corn,” Hultman said. In June, USDA said farmers planted 94.1 million acres of corn. The agency’s Prospective Plantings survey in March only indicated 92 million would go to corn production. “A lot of comments seem to think that was because the crop insurance protection was so high. While that’s true, it still would have been better to stay with a 50-50 rotation because soybeans ended up being profitable. Fundamentals do matter.”
Hultman said that USDA estimates it cost $5.13 to raise a bushel of corn in 2023, compared to $12.53 per bushel of soybeans. USDA will release cost of production estimates for 2024 in mid-November.
“As we look forward to next year, we’re going to be looking at a lower February average, most likely,” he said, adding that weather in Brazil will be a dominant factor. “It’s going to be a tougher situation to protect costs.”
Katie Dehlinger can be reached at [email protected]
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