re: Corn Price $3.89 Today

No. That price is the out the field price for a bushel (56lbs). From the farmers I follow, it seems $4 a bushel is where break even sits.

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I know next to nothing about this iindustry. However I have had conversations with farmers in TX and in LA about the insurance game they play. That has been absent from this thread. Hedging a big crop vs a bad one with insurance. And if done correctly;y, can win both sides on occasion.

Any validity to this?

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It can happen, but it's not some bulletproof strategy.

In cotton, it's called the STAX program. There used to be another name for it. It's been a "good bet" twice in the last 30 years, I believe.

There's a yield and price/lb. formula that determines whether it will pay. I can't tell you the formula off the top of my head.

If you're sitting in your insurance agent's office in March and you believe that the price is going to fall a substantial amount, and a certain yield is going to be achieved in your area, but not enough to make up the difference in that yield/price formula, you can add STAX as a rider on your policy for $5-10/acre.

Like I said though, this is not fool proof. It truly is an educated gamble.
It hits probably 7-8% of the time, but there is enough data to get your chances up to probably 25-30% when you do decide to buy.

I will say, that if you're a better marketer and farmer than most in your area, and buy STAX on the right year, it prints money. I think the last time it hit, it paid around $150/acre in this area.


ETA:

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Crop insurance is a “decent” safety net, like regular insurance the farmer can pick their coverage level and most end up around 75-90% of expected production. So in a disastrous year the farmer doesn’t go bankrupt, but it still likely hurts. They’re certainly better off making a crop and selling it vs collecting from insurance.

I’m not saying there’s never been a farmer that gamed insurance, but for the most part that’s nonexistent today. Farmers that only farmed for insurance aren’t in business any more.

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This is absolutely correct. Insurance is no longer the game that some p.o.s.'s used to abuse. It's now more a safety net for good farmers that have the ability to recover, which is exactly what its purpose should be. It helps farmers that have bad luck one year get most of their bills paid so they can roll their losses into the next year's loan and try to get back right.

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No, bc once they put the words deer corn on it the price will be $10.50.

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It's triple cleaned and in pretty bags. Bring your barrels, boxes, trailers, whatever to our shop and I'll sell it to you for $5/bushel all day right now.