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| Your situation is very similar to a lot of central Illinois farmers. 10 years APH is just not representative of the current risk profile. But that is the RMA rule!!
Let's take another look at your situation. How do you define a loss? If you say: When I have a low yield, then you are risk adverse for yield and likely should consider yield based products.
However if you choose this response: I have a loss when my farm enterprise looses equity, then you are in a different realm of risk management. Now your riddle is what risk management tools will give you the result you want.
Your post appears that you are looking for a reason to buy insurance and or developing a workable risk management strategy. Without going into a week long insurance seminar, Insurance is nothing more that a known small loss (premium) each year versus the unknown alternatives. Premiums are a calculation of event frequency and severity. Your description indicates that your experience does not support the premiums you are trying to rationalize. And remember that the premiums you are quoting are not the full risk premium by are subsidized by the taxpayer. This distorts your description further.
What are your risk mangement alternatives?
Forgottonian | |
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Rob ?
