Crop Insurance Today Second Quarter 2022 - 19

which exhibited a -5.9 percent decrease, the remaining
major crops experienced significant upward
swings between 2020 and 2021. Combined
with the higher level of base prices, the significant
increase in IV factors for the major crops
result in substantial premium increases for 2021.
Figure 10 shows the change between the base
prices established at the outset of 2021 in relation
to the harvest prices established close to the end
of the growing season. The harvest prices provided
in Figure 10 are the average daily prices in the
harvest month for the same futures contract used
to establish the base price earlier in the year. Harvest
prices are an essential element of the calculation
process as they are used to determine the
farmer's actual revenue, which in turn is used to
establish the amount of indemnity provided by
Revenue Protection (RP) policies.
Harvest prices for all major commodities increased
for 2021. Corn increased from $4.58 to
$5.37 per bushel, soybeans from $11.87 per bushel
to $12.30, winter wheat from $4.90 to $6.21
per bushel, spring wheat from $6.53 to $9.21 per
bushel, cotton from $0.80 to $1.09 per bushel,
and rice increased from $12.70 to $13.60 per cwt.
The largest increase in base price to harvest price
observed was for spring wheat increasing from
$6.53 per bushel to $9.21 per bushel, an increase
of 41 percent.
Figure 11 contains loss ratios by state for the
corn yield plan of insurance (YP) and corn revenue
plans of insurance (RP and RP-Harvest Price
Exclusion combined) for the states of Illinois,
Iowa, Nebraska, Minnesota, Indiana, Missouri,
Michigan, and Wisconsin. YP plans experienced
higher loss ratios than the revenue plans in a
number of states, mostly the result of experience
for the RP plans reflecting higher yields offsetting
changes in price for the crop year.
For 2021, the corn RP plans within the Corn
Belt states experienced loss ratios just over 50
percent, with Minnesota experiencing the highest
loss of over 1.00.
Figure 12 shows that, at the national level,
the loss ratio for soybean RP plans was slightly
higher than corn. Minnesota was the only state
to experience an above 50 percent loss ratio for
soybeans in 2021.
[Information sources for this section includes
USDA, Foreign Agricultural Service, P, S & D database;
Office of the Chief Economist; World Agricultural
Supply and Demand Estimates Report
(WASDE), various issues; NASS Quick Stats; RMA
Manager's Bulletins, Price Discovery Application,
and Actuarial Information Browser.]
Figure 10
Prices for 2021 RP and RP-HPE Plans of Insurance
e
Prices
$/Bushel
14.00
12.30
12.00
10.00
8.00
6.00
4.00
2.00
0.00
Data as of April 21, 2022
Source: RMA Actuarial Information Browser
11.87
9.21
6.21
5.37
4.58
4.90
6.53
12.00
10.00
8.00
6.00
4.00
2.00
0.00
Base
Harvest
$/lb. or $/cwt
14.00
Base
12.70
Harvest
13.60
0.80 1.09
Figure 11
State Loss Ratios for 2021: Corn
e
State
Loss Ratio
1.50
Revenue Plans (RP,RPHPE)
Yield Plan (YP)
1.00
0.50
0.00
IL
IA
Data as of April 21, 2022
Source: RMA Actuarial Information Browser
NE
MN
IN
MO
MI
WI
US
Figure 12
State Loss Ratios for 2021: Soybeans
e
State
Loss Ratio
1.50
Revenue Plans (RP,RPHPE)
Yield Plan (YP)
1.00
0.50
0.00
IL
IA
Data as of April 21, 2022
Source: RMA Actuarial Information Browser
CROPINSURANCE TODAY®
19
NE
MN
IN
MO
MI
WI
US
Corn
Soybeans
Winter
Wheat
Spring
Wheat
Upland
Cotton
Rice
Crop Insurance Today Second Quarter 2022

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