With lower yields and prices, crop insurance claims could rise
DES MOINES, Iowa - With falling corn prices and a hot, dry summer taking a toll on crops, Iowa farmers could be filing more crop insurance claims. Crop insurance payments are based off of the difference in price from the spring and fall forecasts. This spring, corn was trading at $5.91. Right now, it’s trading at $4.78 per bushel.
Logan Lyon with the Iowa Corn Growers Association says when next month’s price comes out, there may be an increase in farmers filing claims.
“If that price holds true there’s a really good opportunity for crop insurance payments. Just based on the decline in price and based on the variability the crop that’s out there this year,” Lyon said.
Another factor in crop insurance - yields. Lyon says this summer’s heat and drought could lead to claims, too.
“The unique part about this year is we have some struggling yields out there or there’s predictions that there’s going to be some struggling yields. So, right now we’re trying to define that happy medium of decreased production and decreased price really is a perfect storm for some larger indemnities,” Lyon.
With changing weather patterns comes more increased storms, Lyon says the number of claims could climb.
“If we have continued challenges in getting enough moisture or too much moisture - crop insurance is available to cover too much rain, too much heat, too much drought all of those things there is more opportunity for there to be claims,” Lyon said.
The Farm Bill, which in its current form expires at the end of the month, is still being debated on Capitol Hill. Lyon says one thing to watch for is the crop insurance section, which subsidizes up to 50 percent of the cost.
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