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Using CBOT futures data I have compiled a database of fall and spring prices for the past 33 years. Since CRC & RA have existed for only the past few years I though it would be useful to see how prices have
changed between the two price periods.
I wanted to see how often that either the revenue guarantee or yield guarantee increased by more than the next higher coverage level. For a year to count as in increase in price (higher revenue) the price needed to increase by at least 5%, and to count as a decrease (higher trigger yield) it needed to decrease by 5% or more. As you can see in the following information in the last 33 years, 88% of the time a CRC or RA policy would have either a trigger yield or increase in revenue that matched the next highest coverage level. While it is not a guarantee that it will happend, it does show that there is added value in these policies. For more information about this data or need a further explanation please contact Jon at Midwest Ag Insurance.
33 year time period (1969-2001)
February average of November contract $5.73
October average of November contract $5.74
16 of 33 years (49%) 13.4% decrease in price spring to fall
Average decrease $.88
13 of 33 years (39%) 21.4% increase in price spring to fall
Average increase $1.10
4 of 33 years (12%) Less than 5% change in price.
Max Increase
(Spring to Fall) $2.29 (1974)
Max Decrease
(Spring to Fall) $1.69 (1981)
10 year time period (1992-2001)
February average of November Contract $6.02
October average of November Contract $5.68
6 of 10 years (60%) 11% Decrease in price Spring to Fall
Average decrease $.68
2 of 10 years (20%) 9% Increase in price Spring to Fall
Average increase $.50
2 of 10 years (20%) Less than 5% change in price
Max Increase (Spring to Fall)
$.71 (1995)
Max Decrease (Spring to Fall)
$1.07 (1994)
Example: Using 45 bushel APH, 75% CRC, and CRC Price of $4.67.
Guaranteed Revenue $157.61 33.75 bushels Guaranteed
49% Decrease of $.88 $157.61/$3.79= 41.6 bushel Guarantee
39% Increase of $1.10 33.75 x $5.77= $194.74 Guarantee
12% No Change in Guarantees
Midwest Ag Insurance has information for corn also, if you are interested in this information please contact Jon.
This information has been provided for personal use only, is believed to be correct, and is no way a guarantee or prediction of future results. If you would like to use this information please contact Midwest Ag Insurance.
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