Monday, Feb. 28, is the deadline to sign up for crop insurance on spring planted crops.

Because of policy changes enacted last year, farmers shouldn’t wait until the last minute to consult their agent, said Scott Stiles, Extension economist-risk management, for the University of Arkansas Division of Agriculture.

“Becoming acquainted with new names and new provisions may take some extra time,” said Stiles. “If you’re interested in crop insurance, visit your agent as far before the deadline as you can.”

Last week, USDA announced the base price guarantees for the various crops: Cotton, $1.15; corn, $5.93; soybeans, $13.53; sorghum, $5.79; and rice 16 cents per pound.

“As in prior years, when selecting crop insurance, growers will have to decide whether to obtain yield protection or revenue protection,” said Stiles. “In addition, decisions will be required as to the size of the production unit being insured.”

The choices are: basic units, optional units, enterprise units, and whole farm units. The choice of units in crop insurance will not only affect the insurance premiums, but could have a significant influence on earning an indemnity payment.
 

“Since optional units give the most protection against an isolated weather loss, these carry higher premiums,” Stiles said. “Premiums are further reduced under Basic and Enterprise units. Production risks are considered to be lower over a greater geographic area and thus premiums are less.”

In short, to reduce premium amounts based on unit selection – the larger the combined acreage, the lower the premium.

“If a producer is primarily concerned about declining market prices or revenue loss, any unit structure under a Revenue Protection policy provides the same price risk protection. This is because the same projected prices are used to establish the revenue guarantees.”

For more information about risk management visit the Southern Risk Management Education Center at srmec.uark.edu, or contact your county Extension office.