Corn Insurance Plan Provides Great Value

Lindsay Barfoot, Account Lead, Agricorp

For the 2007 corn crop, Agricorp’s Production Insurance (PI) plan will provide producers with more coverage for their premium dollars.

By working closely with the Ontario corn industry, Agricorp makes sure PI plans meet producers’ changing needs. This year’s plan was influenced by increased average farm yields, lower projected claim rates, and greater liability due to significantly higher corn prices and projected increased planting. In fact, corn prices are over 40 percent higher than a year ago.

On a per acre basis, PI premiums are 26 percent higher than in 2006. However, as illustrated in the chart, the 2007 insurance premium is still lower than in three of the past five years. So what does this mean for producers? It means that producers who enroll in Agricorp’s 2007 PI plan for corn will get 11 percent more value for the premium price, compared to 2006. Here’s how.

“Coverage for your premium dollar” is calculated by dividing your total coverage value (your production guarantee x the forecast claim price) by the premium. For example, the premium for the 80 percent floating claim price option is $22.35 per acre. If your production guarantee is 125 bushels per acre and the forecast claim price is $3.66 per bushel, then the "coverage per premium dollar" is calculated as follows:

By comparison, in 2006 the forecast claim price was $2.60 per bushel and the premium was $17.77 per acre, so the coverage per premium dollar was only $18.29.

Remember to report your final acres by June 30, 2007 by calling Agricorp at 1-888-247-4999. More information is also available at www.agricorp.com.