From our chair, the story of the day centers on crop insurance, crop insurance premiums, the type of coverage you elect, among other things. Let me say that I do not profess to be a crop insurance guru. From the outside looking in, it appear that obtaining crop insurance is more a function of banks requiring the insurance to get a loan. Also, that at the end of the day, if your yield comes in around your APH, you need the new crop corn market price to drop 15 or 20% from $4.62 before filing a potential claim. So, if you have 1,000 acres of corn at a 200 APH and 85% coverage, you have the potential of reducing your revenue by about 30 cents a bushel or $60 per acre from the spring price before indemnification. But today, with Dec 2026 corn closing at $4.8175, your new risk to revenue is $179.50 per acre.
Look, this is a lot of numbers. Throw in what is going on the in the middle east, uncertainty abounds. Here is what I offer to you:
In 2024, the average MN farmer paid on average $18.37 per acre in crop insurance premium in Minnesota. Subsidies covered about 63% of that number. For $3.00 per acre, Heartland Commodities & Securities Inc. will provide to you an initial comprehensive report showing your revenue flow and potential loss in revenue should the market back down to pre military activity in Iran. Further, our proprietary model will analyze various strategies and cash flow ramifications using all forms of derivatives to build a risk/reward profile that will hopefully allow you to sleep at night throughout the growing season.
Here is a final thought. Most of you probably have a confident entity that you are using to guide you through this marketing maize. I get it. having been doing this for 43 years (not just grains, but developing and implementing hedging models for many different industries), I know the majority of brokers and consultants “schtick”. (Probably telling you what you want to hear, not need to hear.) Today, we are seeing very troubled times. Oil, fertilizer distribution, interest rates, inflation, stagflation – what will the finish line look like – if it ever appears to come into focus? Are your prepared?
Let me close this way. Right now, things are tough for profitability in 2026. I was once told, “Hope is the enemy of the rational trader”. I hope that this market improves to the point where everyone is profitable, but that is the enemy. Let us help you work the numbers so you can prepare for the worst, but “hope” for the best.
Thanks for reading.