Just a note to make sure everyone in Alberta is running the numbers on spring price endorsement/revenue insurance.
Prices are low to start with so SPE is unlikely to pay out (at least I hope). The reason you will invest in SPE premium is to use RI as a risk tool.
When I talk to most farmers, their first question is whether the program will pay. The process I encourage first is to look at the risk coverage per acre versus premium cost.
Using canola as an example, the revenue insurance price is $316/tonne. The crop insurance coverage price is $240/tonne. The worst thing that will happen (floor price if you like) is the price decline this fall stalls at 9.5 % (just above the 10 % trigger). The trigger is $216/tonne but lets assume the calculated price next fall (Oct.) is $218/tonne. You still collect RI which is which would be about $69/tonne (70 % of the difference between $316 and $218/tonne).
Assuming .5 tonne/acre insured yield (I will let you put in whether this is at 60, 70 or 80 % coverage or whether realistic), you have guaranteed yourself a per acre revenue of at least $143.50/acre minus the SPE premium. If your yields are higher or you market the crop at a higher price, your return per acre will be better. The RI payment will not count in CAISP calculations (provincial program) so either good is you want to maximize CAISP payments or negative if you are wanting to build your margin.
Recommendation - Work the numbers and come to a decision for your farm.
Prices are low to start with so SPE is unlikely to pay out (at least I hope). The reason you will invest in SPE premium is to use RI as a risk tool.
When I talk to most farmers, their first question is whether the program will pay. The process I encourage first is to look at the risk coverage per acre versus premium cost.
Using canola as an example, the revenue insurance price is $316/tonne. The crop insurance coverage price is $240/tonne. The worst thing that will happen (floor price if you like) is the price decline this fall stalls at 9.5 % (just above the 10 % trigger). The trigger is $216/tonne but lets assume the calculated price next fall (Oct.) is $218/tonne. You still collect RI which is which would be about $69/tonne (70 % of the difference between $316 and $218/tonne).
Assuming .5 tonne/acre insured yield (I will let you put in whether this is at 60, 70 or 80 % coverage or whether realistic), you have guaranteed yourself a per acre revenue of at least $143.50/acre minus the SPE premium. If your yields are higher or you market the crop at a higher price, your return per acre will be better. The RI payment will not count in CAISP calculations (provincial program) so either good is you want to maximize CAISP payments or negative if you are wanting to build your margin.
Recommendation - Work the numbers and come to a decision for your farm.
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