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| For me, insurance is only to save me from taking a giant step back any given year. I do not intend to use it to make a bucketload of money. I just want to prevent extremely dire financial situations.
In the early spring of 2012 I thought to myself, "corn is at $5.40. I think we'll have opportunities to market at $6+ cash corn this year but if I'm wrong and it goes to $3.00, I'll have a tough time paying bills if I grow 75% of my APH". I was under the impression that if bushels produced >= APH times coverage level, I would not get anything no matter what the price did.
Because of this, I sold 40% of my projected production which was still a fair amount less than acres times APH times coverage level.
The truth is that the worst case scenario for me was my APH times my coverage level times $5.68 even if I did produce 75% of my APH. This year, that dollar figure was a fairly profitable number for me. With my belief that prices were going to go up, if I had understood how I was protected, I definitely would not have contracted anything.
I'm not saying that you should not forward contract. I'm just saying that with the mindset I had at the time, I would not have forward contracted anything this year and I would now be in a much better position. Being under the impression that crop insurance only protected bushels you DON'T make was an expensive mistake for me this year.
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For those of you who have hedged more than you were able to produce
