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Senior Contributor

Insurance Prices on 2013 corn and soybeans

I am hearing we will have a $5.80bu corn price and around $12.50 on beans for the insurance price. Has anyone heard otherwise that the prices may be higher or lower? For Iowa at a $5.80 corn price, a 210bu yield, and $12,000/acre dirt, this equals a 6% Return on Investment figure, not bad. The 50+ year average for a ROI figure is in the 4-6% range. For the 2012 crop year, I expect a 8 to 9% ROI, which is as much as 4% over the 50 year average ROI for an Iowa corn acre, not bad at all. However, a $4 corn price and a 210bu yield drops the Iowa ROI for 2013 down to 2.5%, this is around 1.5% below the 50 year average range. This will not cause a panic with current farmland owners since most landowners are in for the long-term which is unlike alot of the stock and bond market investors.

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3 Replies
Veteran Contributor

Re: Insurance Prices on 2013 corn and soybeans

Insurance price will be the average of the close each day during the month of February. Farming on paper sure is easy isn't it.
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Advisor

Re: Insurance Prices on 2013 corn and soybeans

rsw - it is my understanding there is going to be a different rate for those located North of hwy 30 and even hwy 20 and probably I-80.  Soybean prices are going to be one half the average price in February, and Corn is going to be 66% of the average price for that area,  plus they are going to double the premium up there so your indemnity payout will be reduced. 

 

It is my understanding that the reason for the change is that farmers north of that line, have experienced such a gain in their farmland values, and have been making so much  money and paying so much in taxes, that the USDA wants to give you a tax break.

 

You know . . . create some NOL's since you have no subsoil moisture up there this year.  They want you to carry the losses  sustained this year back to reduce income from prior years, and get that refund. Of course, this only applies because everyone North of these boundries are in the top 1% in this country.,

 

  Plus I understand there is going to be a 20% excise tax on all farm income generated in Iowa by residents located in Minnesota.  LMAO! . John

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Senior Contributor

Re: Insurance Prices on 2013 corn and soybeans

Yes, farming on EXCEL Spreadsheets is fun!!!. I do have some nice software to work with though.

 

Yes Faust, pretty funny post about us north of I-80 guys and the MN Tax on guys that own Iowa farmland!!! I am working on my taxes today, it is raining ice pellets to beat the band at my house now and the street I live on is covered with a 1/3 of an inch of ice currently. The paper said maybe 8 to 12 inches of snow for MN today. Will get a chance to test out the new SUV I bought for myself 2-3 weeks ago, seems like a nice well-built car/suv. It has a nice 4 wheel drive system in it, alot better than my GMC Truck had.

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