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nc ks | I can see your thinking, but you are not correct. If you follow your thinking then the policy never guarantees any revenue. You are getting hung up on if the harvest price goes up, so lets forget that scenario for a minute. Lets look at if the harvest price goes down. By your logic, if I am guaranteed $400 dollars an acre and 100 bushels/A at a starting price of $4 and the harvest price goes down to $3 it is going to take me more bushels to reach the $400, so my policy guarantees me more bushels. However, I may have done something stupid and sold those bushels at $1. My policy doesn't care about my actual revenue, just the revenue I could have had if I sold my grain during the harvest period. So my policy really didn't guarantee me revenue, just the opportunity to revenue. It is the same when the harvest price goes up. It doesn't guarantee that I will sell my bushels I raised for the harvest price, but if I have a total loss it raises my guaranteed revenue above what my initial policy guaranteed me.
All I can say is, the original poster's math is correct. Look at it until you understand it. | |
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Crop Insurance Question - Is this simple math right?
