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Tumbling soybean prices could trigger indemnity payments

A farm management analyst predicts the tumble in soybean prices will result in substantial crop insurance payments for some farmers.

Kent Thiesse with MinnStar Bank in south-central Minnesota says revenue protection policies based on optional units with higher coverage levels should provide the biggest payout.

“Depending on what your APH yield is, at 85 percent you basically start collecting indemnity payments at your APH yield (using) current November soybean futures prices.”

He tells Brownfield farmers need to weigh yield potential against the cost of inputs like insecticide and fungicide.

“Because if you already think you’re not going to get your APH yield, it probably doesn’t make a lot of sense to put a lot of extra money into the crop.”

For corn, Thiesse says it would probably take a 5 to 10 percent drop in yield to trigger payments based on current December futures prices.