Risk Managing Your Crops

Crop insurance provides a safety net when producers need it the most. Producers may suggest using puts and calls as a risk management tool.  The difference between the two is crop insurance protects the producer from poor yields.  For example, a large wind storm breaks the corn stalk off in only your field.  Thus, the corn crop did not yield as well as originally planned.  If the producer only used puts and calls, the producer would not receive any money for the production lost.  However, with crop insurance, the producer will receive a loss payment.  A time when puts and calls will prove better is when an entire region is affected, not just one field. With this in mind, crop insurance can be thought of as an income stability tool.  Even though the acres did not produce as well as planned or the price of the commodity dropped, the producer may receive a production loss payment or a revenue loss payment.  This stability tool helps keep income steady and lessens the unpredictability.

In today’s volatile market, insuring your break-even point has become a must.  AgQuest Insurance Agency offers many different options for our producers to make sure they can come out on top.  Together, we’ll find the way to protect your operation!

 

The contributions of the third parties views represent the opinions and views of the third parties.  AgQuest Financial Services does not endorse these resources and should be considered only as a form of advice.

AgQuest offers “one-stop shopping” for all of your agricultural finance and insurance needs, including operating loans, real estate loans, machinery & equipment loans and leasing, a full line of ag insurance options such as crop insurance, precision farming and Livestock Gross Margin Insurance.

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