USDA Announces Crop Insurance Price Elections

USDA's Risk Management Agency has announced the established price elections for most 2002 crop year spring crops insured under the federal crop insurance program. Price elections are the basis of crop insurance premiums that help farmers manage risk throughout the growing season.

Price elections had to be announced by Nov. 30, the date of the RMA announcement, but the levels may be revised upward (but not lower) when the 2002 national commodity loan rates are determined and announced later this year. Revisions also could occur if Congress alters loan rates for the 2002 crops before Jan.15.

The 2002 commodities and established price elections are corn, $2 per bushel; cotton, 50 cents per pound; flax, $5.21 per bushel; grain sorghum, $1.85 per bushel; rice, $6.50 per cwt.; sunflowers, 93 cents per pound, and soybeans, $4.92 per bushel.

A price election for each crop is required by the law to be "no less than" the average expected market price for the marketing year. In determining expected prices, RMA analyzes beginning and ending stock levels, estimated planted and harvested acres, yields, utilization, export projections and other economic forecasts by USDA's Economic Research Service.

However, in recent years some crop price elections have considered the effect of the loan rate in determining the expected market price, especially when prices are well below loan rates. RMA will continue to monitor developments over the coming weeks and may provide an additional "higher" price election for these crops by Jan. 15.

If an additional "higher" price election is announced, the insured must affirmatively elect the additional "higher" price election prior to the sales closing date. The price elections determined and announced may be found on the RMA website at www.rma.usda.gov Price addendums are located under Participation Data.