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NWMO | Well let’s use 2023 for example
Lets use $5/bu corn as the insurance price
Let’s say the APH is 220 bu/ac
So 80% crop insurance at $5 = $880 guaranteed
So let’s say the crop burns up in late July and early August from drought and yields 100 bu/ac
Crop insurance is going to kick in and revenue protection guarantees $880 so that’s what you get.
$880 - $250/ac rent = $630/ac left to cover all the years expenses from fertilizer, equipment, seed, taxes, salary, etc….
You could look at it and say, well, 30% of $880 is $264/ac. So, is it fair that the tenant, after having a crop failure, should pay more rent when the left over money will more than likely barely cover all the yearly expenses per acre let alone make any money for themselves?
That’s why it has to be based purely off of yield and insurance price | |
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Cash rent plus bonus questions
