Contract Price Option
The Contract Price Option should allow producers to increase their crop insurance coverage on some crops. Under this option offered by Saskatchewan Crop Insurance, the contracted price and quantity can be used for insurance purposes. Take the example of yellow mustard. The crop insurance base price for 2011 is $12.47 a bushel. That’s just under 25 cents a pound. Some companies are now offering new crop yellow mustard contracts at 35 cents a pound on the first 500 pounds per acre of production. Using 35 cents rather than 25 on the first 500 pounds of your yield guarantee means a significant increase in your coverage level. Of course, the premium increases proportionately to the increase in your coverage level. Crop Insurance also offers a Variable Price Option that uses a July price forecast and an In-Season Price Option that uses a September to February average. However, price levels and therefore the coverage per acre can go up or go down. With the Contract Price Option you get to lock in a superior price and increased coverage, assuming you have signed such a contract. I’m Kevin Hursh.