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| Po,
If prices go from the beginning 6.01 to an $8.00 ending price, and you own an 80% harvest exclusion policy, you now own a 60% policy. If you marketed 80% of your APH, and are part of the reason for higher prices (short crop), you are now buying $8.00 minus (or plus) basis bushels to fill that contract, and receiving no insurance on 18% of those bushels.
Example:
100 bu APH, 80% HE policy, sold 80'bu corn at $6.00. At harvest, I have a production problem, and grow 60 bushels, and the ending price is $8.00.
With revenue plan, I receive $160 per acre ($8.00 X 20 bu)
With Yield Plan, I receive $120 per acre (6.01 x 20 bu)
With RP Harvest Exclusion, I receive nothing. My "trigger yield" has become 60 bu!
In the meantime, I sold 20 bushels I did not produce, and must "buyback" or replace those bushels foe $8.00 per bu, or $160 per acre. I deliver those $8.00 bu, getting my $6 contracted price, losing $40 per acre.
I've now "lost" a net of $200 per acre, compared to owning straight Revenue Plan.
Rob
From my Ipad
Edited by robheyen 3/16/2011 08:46
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Crop Ins ?
