Episode 91 - Analyzing the relationship between the yield ratio and optimal crop insurance coverage levels

Hunter Biram is joined by Enil Serrano and Grant Gardner to discuss the Crop Insurance Decision Maker, a web-based tool developed by the University of Arkansas and University of Kentucky that evaluates expected net returns across different crop insurance and farm program scenarios. They walk through key findings on how a farm's yield relative to the county average shapes the optimal coverage level, and why skipping crop insurance altogether is rarely the right call. 

Transcript

00;00;00;25 - 00;00;29;21
Dr. Hunter Biram
The Crop Insurance Decision Maker, or CIDM, a web based tool designed to evaluate expected net returns under different crop insurance and farm program scenarios, has been released. And there's an article that we're going to talk about today. In nearly every scenario analyzed for Arkansas and Kentucky, purchasing some level of crop insurance outperformed choosing no insurance at all. And lastly, the optimal crop insurance coverage level is often between 70 and 85%, especially when farm yield expectations are relatively strong compared to county averages.

00;00;29;23 - 00;00;43;21
Dr. Hunter Biram
That, and so much more on this episode of Morning Coffee and Ag Markets.

00;00;43;23 - 00;00;52;11
Dr. Hunter Biram
Well, good morning to you. I'm your host today, Dr. Hunter Biram. And with me in the studio virtually, I've got Mr. Enil Puerto. Enil, how are you?

00;00;52;14 - 00;00;54;16
Enil Serrano Puerto
Well, good Dr. Biram, thanks for having me.

00;00;54;17 - 00;01;00;07
Dr. Hunter Biram
Glad to have you here for the first time. And a repeat offender here, Dr. Grant Gardner. Grant, how are you?

00;01;00;09 - 00;01;01;25
Dr. Grant Gardner
Great, good to be back.

00;01;01;27 - 00;01;20;02
Dr. Hunter Biram
Yeah, man. Always good to have you on here. Well, folks, let me just lay out some groundwork, and then I'm going to have Enil tell us more about himself. So the federal crop insurance program continues to serve as one of the most widely used risk management tools in U.S. agriculture, covering nearly 500 million acres and representing roughly $192 billion in insured liability in 2024.

00;01;20;04 - 00;01;44;03
Dr. Hunter Biram
Producers face annual decisions about how much crop insurance coverage to purchase, particularly as commodity prices, input costs, and acreage allocations shift from year to year. To help producers make these decisions, researchers and extension specialists from the University of Arkansas and the University of Kentucky developed the Crop Insurance Decision Maker, which is a web based tool designed to evaluate expected net returns under different crop insurance and farm program scenarios.

00;01;44;04 - 00;01;52;15
Dr. Hunter Biram
So without further ado, folks, let's get started. Enil, can you just tell us a little bit about yourself, your background, and your work at the University of Kentucky?

00;01;52;17 - 00;02;16;29
Enil Serrano Puerto
So like I said, I'm happy to be here. And I'm originally from Honduras, from a small coastal city, and I wasn't born in a farm, but I was sparked in the interest in getting to work in agriculture because my dad is an agronomist which has worked for more than 20 years in a transnational company called Dole. And in there he specifically works in the banana plantations.

00;02;16;29 - 00;02;54;07
Enil Serrano Puerto
And for me, that was a huge impact because I saw how this company brought a lot of economic development, and that's why I ended up studying agribusiness management at Samorano University, which is a different type of university because they have a different type of teaching philosophy, which is more like learning by doing, in which you have to go to the field, work out in sunny days, work with livestock, working in different processing plants, and after that, when I was done with my major, I always knew that I wanted to do a master's degree, and that's what brought me here to UK.

00;02;54;07 - 00;03;20;10
Enil Serrano Puerto
And I've been happy and grateful that I've been able to join you and Dr. Grant to be able to learn more about crop insurance and FSA programs, because we know the importance of it, especially during these times of trade tensions, tariffs, climate change, and even if you're not directly related with agriculture, if you're like the taxpayers, you really want to know, like where all that money is going.

00;03;20;11 - 00;03;23;25
Enil Serrano Puerto
And we know that crop insurance is highly subsidized.

00;03;23;26 - 00;03;40;07
Dr. Hunter Biram
I think that there is no way that I could have said that better myself, Eneil, that is very well put. And, you know, I want to say, I think you are the first farm boy that I have ever met that came from bananas, which is pretty neat, Frankly, I've been getting into running lately, and I've been eating bananas to help with the cramps.

00;03;40;07 - 00;03;59;00
Dr. Hunter Biram
And so I got to say thanks to your dad and all his work for bananas, because I've been I've been utilizing that. Well, Enil, it's so great to have you. Grant, can you just tell us what demand there is for this tool in Kentucky and in the Upper South, in the Midwest?

00;03;59;02 - 00;04;21;09
Dr. Grant Gardner
Yeah, I think the biggest use that I’ve found for it so far, and I think, you know, we're going to have more iterations of this and see what we can do to make it better. But a lot of this, just using that tool for crop insurance education. And so sitting down and showing how crop insurance works, I think is one of the main points of this article that we're discussing today is how does this shift the net income distributions and how does it really protect you.

00;04;21;09 - 00;04;45;27
Dr. Grant Gardner
And it's been a great tool for that. I think it does help additionally to if you're going to make a decision on, you know, crop insurance is complicated, what kind of unit structure am I going to use? What kind of coverage do I want? ET cetera. And it does kind of it's easy, after having some education to go back to this tool and think about, okay, what is the best options for crop insurance for the farmers operation or anybody's operation.

00;04;45;29 - 00;05;04;04
Dr. Hunter Biram
Yeah. It's like as you were talking, the phrase decisions within decisions came to mind. It just seems like there are so many decisions within the crop insurance decision. You know, historically with farm programs, you had mostly like an ARC or PLC decision, and that was it. It was almost like a binary, zero, one, you know, but now with crop insurance, it's like, did you get crop insurance or not?

00;05;04;05 - 00;05;24;08
Dr. Hunter Biram
It's like, well, yes, but it's more than that. You know, there's the yield versus revenue. There's coverage levels, like you said, there's units. And you know, even within different land tenure agreements, rental agreements, there's going to be some differences there. So lots of decisions to be made within this crop insurance decision. So yeah. No I think this tool addresses that.

00;05;24;09 - 00;05;42;20
Dr. Hunter Biram
Enil, you did a fantastic review of tools that are available. You know, you looked at crop insurance tools, farm program tools. Can you kind of tell me and tell the listeners, where does crop insurance decision maker fit within all of these tools?

00;05;42;22 - 00;06;10;05
Enil Serrano Puerto
I think it's a great complementation of all the other tools existing out there, especially from academia sectors. They're like very varied. Some of them are like, in Excel spreadsheets, and some of them are web tools that, for example, require minimal input by farmers and decision makers. And I think like ours, it's a great fit because it allows people to to be able to make decisions upon it.

00;06;10;05 - 00;06;39;06
Enil Serrano Puerto
But most importantly also is like the spread of education, of crop insurance, because a few were discussing is a little bit difficult to work around the unit structure, the coverage levels, and additionally our crop insurance decision tool includes different risk preferences scenarios as neutral or risk averse people. So it's good to know that we have made this complementation to our tool.

00;06;39;10 - 00;06;58;15
Dr. Grant Gardner
I think, too, one thing I would add is that, and Hunter, you were a large part of this, but a lot of the previous tools did not mix crop insurance and FSA programs together. And obviously that's a big value add of we can compare what's this crop insurance policy look like under PLC, and what's this look like under ARC?

00;06;58;18 - 00;07;28;19
Dr. Hunter Biram
Yeah. And you know what's interesting about that is it it even teaches it even teaches just the differences between what I would call a farm program like FSA, ARC and PLC versus crop insurance. I mean, for one, we know that Arc and PLC are based on more cash price or as crop insurance is more on futures price. And we know that ARC is based on this county level measure, whereas crop insurance is most of the time, at least in the context of this tool is going to be more of that farm level yield.

00;07;28;20 - 00;07;47;19
Dr. Hunter Biram
So there are some just some key differences. And, you know, one thing that most people would know, but the only thing much about is that argon plc. That's free, right? You just sign up for it's all about making the right decision crop insurance. It costs money. And so then it becomes which one of these programs augments my crop insurance coverage, the best, in the most way.

00;07;47;19 - 00;08;13;04
Dr. Hunter Biram
And that we would see with higher expected net returns. So we have this journal article actually in the Journal of the American Society of Farm Managers and Rural Appraisers. This article provides a nice, detailed look at the tool, but it does not look at all the results. Like all at once. You know, it's like it's by county by crop combination for the most part.

00;08;13;07 - 00;08;36;28
Dr. Hunter Biram
But what I found super interesting is the relationship between yield ratio and optimal coverage. You know, the reason this matters is because we can link changes to farm specific premiums based on relative yield expectations to the county. Have either of you guys been able to visit with a crop insurance agent or a farmer who may have corroborated this, or have you heard of people paying higher premiums because maybe their farm yield is lower relative to the county expectation?

00;08;36;28 - 00;08;40;13
Dr. Hunter Biram
Could you guys just provide some insight on that?

00;08;40;16 - 00;09;03;17
Dr. Grant Gardner
I've had, you know, some anecdotal evidence of this occurring and the fact of, you know, people in higher risk ground are obviously going to have a lower ratio. And so it's kind of interesting looking at some of our results that even with that lower ratio, especially if a lot of your ground on the farm is packed into, maybe we'll call it Bottoms Ground in Kentucky and it's high risk.

00;09;03;18 - 00;09;11;23
Dr. Grant Gardner
It might not yield year over year. That really, a lower coverage level might be better for you, and I think that's a really interesting finding.

00;09;11;25 - 00;09;39;13
Dr. Hunter Biram
Yeah. No just summarizing this. I know in Arkansas, for instance, I mean you're looking at if you're yield ratio is at one or above. And what we mean by that folks, is if your farm yield actual production history. So that formulaic expectation measured by the app, if it's equal to the county yield expectation. So 1 to 1, you know, for the most part across I believe I'm looking at all the crops here at the same time.

00;09;39;13 - 00;09;59;06
Dr. Hunter Biram
To the best of my ability. It's looking like you're looking at 80 or 85% coverage. So if it's like a 1 to 1. It's 80 and 85%, you know, for corn, as you dial back and look at a yield ratio of maybe 0.6, which means that the farm yield expectation is 60% of the county yield expectation, you'll dial it back to about 75% coverage.

00;09;59;06 - 00;10;22;25
Dr. Hunter Biram
Dial that back even further to about 0.4. Then you're looking at the 50 to 70% range. And the same holds for cotton soybeans. It's not as severe of a drop off, but similar trends haul. If you're looking at 0.6 to 0.7, you're looking at 70-75% coverage level. For soybeans, this is taking the maximum net return across all the crop insurance combinations and by crop within the state.

00;10;22;25 - 00;10;39;26
Dr. Hunter Biram
And so for the most part, revenue protection is going to be the product that's chosen. So I'm talking about coverage levels. I'm talking about within revenue protection. Grant, Enil, whether you're looking at the Kentucky figure of this figure two here, does anything jump out to you that you find the interesting? I mean, you guys have wheat. We don't have as much.

00;10;40;01 - 00;10;42;01
Dr. Hunter Biram
What was interesting there?

00;10;42;03 - 00;11;03;07
Dr. Grant Gardner
The big thing that sticks out to me is that at those lower ratios so meaning that if your APH is much lower than, you know, the crop insurance level. And I know Hunter just said the correct term for it, it's showing that the risk at that point or taking the risk pays off better than what having the protection from the risk does.

00;11;03;08 - 00;11;14;04
Dr. Grant Gardner
And so it's kind of a back and forth of how much protection do I want to pay for? And then what's the break even on what I'm paying for versus what my reward could be if this yield is high.

00;11;14;08 - 00;11;33;26
Dr. Hunter Biram
So I will say one thing in Kentucky that I found interesting is that in terms of the app that we looked at, and so for the audience, you know, in the in the article, what we do is we assume that the NASA of the National Statistics Service reported de trended yield for the county is the same as the farm level app.

00;11;33;28 - 00;11;59;06
Dr. Hunter Biram
So we have to make that assumption because we don't have access to farm-level data. So with that in mind, there is no yield ratio above one here, whereas we have several in Arkansas, I found that to be particularly interesting. Soybeans gets pretty close. It gets up to one. For the most part. It seems that those nice yields tend to be lower in Kentucky compared to the RMA County yield expectation.

00;11;59;09 - 00;12;32;27
Dr. Grant Gardner
Yeah. And I think a lot of that comes down to reporting anneal. You know, we did some work on the difference between NASS and RMA yields. And a lot of those results showed that depending on the state and the county you're in, there's a lot of underreporting and over reporting. And so I think some of those results are showing up here when we compare the two states is that, you know, Kentucky traditionally underreported probably their nasty compared to their actual yield where Arkansas in a lot of cases might be over reporting, especially if we look at the cotton chart you have on this article.

00;12;32;28 - 00;12;40;00
Dr. Hunter Biram
That is interesting. Very interesting. So so you're telling me that farmers would embellish a little bit.

00;12;40;02 - 00;12;45;25
Dr. Grant Gardner
Some are embellishing and some are probably thinking, man, if I report a lower yield I might get an FSA payment.

00;12;45;26 - 00;13;07;00
Dr. Hunter Biram
Hey that's interesting. That is interesting. And it's interesting to see these differences across these political boundaries. I mean, I mean, we're really talking about farmers. At the end of the day, they're all farmers. They're all farming, at least in this case, corn and soybeans. But just to see those differences is always interesting. Enil, maybe you could just take some time here just to talk about, I know that we have the Southern Extension Economics Committee conference coming up next week.

00;13;07;00 - 00;13;17;06
Dr. Hunter Biram
And last year Grant showed a poster that y'all worked on. Could you maybe just talk a little bit about that research and looking at the differences in the NASS data and the RMA data?

00;13;17;08 - 00;13;41;19
Enil Serrano Puerto
Yeah, I think like what Dr. Grant mentioned, it was like really interesting for me. Maybe some farmers were like underreporting their yields to maybe get access to the payments was really interesting for me because, I mean, at the end of the day, they just want to have some type of stability for their farm and FSA programs required. No enrollment fees is free of access for farmers.

00;13;41;19 - 00;13;45;11
Enil Serrano Puerto
So I think that was really interesting for me.

00;13;45;13 - 00;13;56;10
Dr. Hunter Biram
So, you know, one thing that we found is that no crop insurance is rarely, rarely the preferred outcome in our analysis. Why do you think that is?

00;13;56;18 - 00;14;27;07
Enil Serrano Puerto
Yeah. In our article, I think it's really interesting that listeners can go and take a look at it. I think they will find them like very helpful because, for example, in the scenario, we depict a scenario of accounting in Kentucky that doesn't have insurance. We see how wide and spread the different outcomes can be. For example, I remember that in that case, the potential losses could go from $1 to $800 per acre and expected net revenue was $134.

00;14;27;07 - 00;14;59;27
Enil Serrano Puerto
And in the other scenario, while having insurance, we saw how those distributions of expected net revenues got more narrowed down and how the expected losses only went from $1 to $200 per acre. And like the potential loss increase a little bit by 3%. But it gave, like the farmer more stability, for example, in those losses could turn out too complex, for example, into closing the farm or keep farming, and especially also if like they have that like that money would be really important.

00;14;59;29 - 00;15;23;03
Dr. Hunter Biram
Oh yeah. I mean tight margins now tighter than ever and financially stressed financial positions. I mean just make this so important. You know, Enil, what I'm reminded of now as we're talking is there was a Southern Ag Today article I believe, that we put out. Was it a year or two ago as we were working through this data, you know, just talking about the differences in the distribution of the potential net revenues, because that's what we're doing here.

00;15;23;05 - 00;15;41;27
Dr. Hunter Biram
I like to say we're doing a simulation, but the best way to describe it is it's like Groundhog Day. So for any Bill Murray fans, for any Groundhog Day movie fans, it's like we were to live out this year, for instance, this crop year 10,000 times. What would all the potential farm yields, county yields and all the prices be in each of those scenarios?

00;15;41;29 - 00;15;58;28
Dr. Hunter Biram
And then we just take the average of all those. So Enil, could you maybe talk about, in this vein of how crop insurance is almost always some level of crop insurance, even if 50% by up is still better than having no insurance? Can you just talk about the differences in those distributions or those potential outcomes of those net returns?

00;15;59;05 - 00;16;29;08
Enil Serrano Puerto
Yeah, I think I didn't mention that. I think it was really important to to mention a little bit about the methodology in which we're showing 10,000 simulations of what could happen. And I think that's really important because we're including we're including a random variable to all of the possibilities that a farmer out there is really facing. So having no insurance leads you exposed, exposed out there to climate change, for example, or anything related to it, or for example, commodity markets, the prices.

00;16;29;08 - 00;16;31;25
Enil Serrano Puerto
So I think that's really important.

00;16;32;02 - 00;16;50;04
Dr. Hunter Biram
Yeah. And you know, we've talked about net returns a lot at this point. But you know, one thing always fun interesting in this kind of work is risk preferences. So when we bring in the human aspect because right now we're just talking about dollars. When we start to model that human aspect, now we're talking about risk. We're talking about risk aversion, risk seeking, risk neutrality.

00;16;50;04 - 00;16;57;16
Dr. Hunter Biram
And so, Enil can you explain the difference between risk neutral and risk averse scenarios in the tool?

00;16;57;18 - 00;17;30;22
Enil Serrano Puerto
Yes. So risk neutral scenarios like evaluate decisions based strictly on maximizing expected profits like in contrast, risk averse producers dislike uncertainty and the direct factors in the heavy financial mental strain that come with all of the unpredictable income, and a risk neutral tries to focus their strategy entirely on the highest potential payout over time. And that risk averse strategy prioritizes stability and the survival of the farm operation during the bad years.

00;17;30;23 - 00;17;36;26
Dr. Hunter Biram
So how do risk averse farmers value the outcomes relative to risk neutral farmers?

00;17;37;03 - 00;17;58;21
Enil Serrano Puerto
Yeah, so risk averse farmers values routine outcomes less because they prioritize income stability over a high stakes gamble. And a risk averse farmer is willing to pay a risk premium, meaning they are willing to accept a lower expected profit in exchange for a guaranteed, stable financial outcome.

00;17;58;24 - 00;18;00;05
Dr. Grant Gardner
That was that was textbook, Enil.

00;18;00;06 - 00;18;08;03
Dr. Hunter Biram
Man, that was awesome. Yeah, that was awesome. You are ready to teach class, man. You are ready for that micro preliminary exam next week. That was great.

00;18;08;04 - 00;18;09;14
Enil Serrano Puerto
I think so, hopefully.

00;18;09;16 - 00;18;28;29
Dr. Hunter Biram
That was great. So you know I'll just tell you guys, I don't think I've ever crossed paths with anybody other than a risk averse farmer. So Grant and all your extension journeys across over 100 counties in Kentucky and all across the country. I know that you travel a lot. Have you yet to find a farmer who is not risk averse?

00;18;29;01 - 00;18;49;06
Dr. Grant Gardner
There's not very many. There's some that I think take more risk than others, and they don't know they're taking more risk. Like an example I can give you is, you know, I've talked to some people that like to hedge after harvest instead of before, which I think oftentimes is a riskier proposition. But when I think about it from their mindset, that's the way they've always done it.

00;18;49;06 - 00;18;56;07
Dr. Grant Gardner
And so that's what they're comfortable with. And so they're probably still risk averse. They're just taking riskier options.

00;18;56;09 - 00;19;11;21
Dr. Hunter Biram
That's interesting. There's some papers out there that look at budget heuristics and other heuristics. And it's just like, listen, I was raised by farmers. Grant, I know that you're raised by farmers and you're still active with with the farm, but there's just something to be said about farmers who just get stuck in their ways. Now, they may be good ways, okay.

00;19;11;21 - 00;19;22;13
Dr. Hunter Biram
And there's probably good reasons for those ways. But generally speaking, I mean, it's kind of like the the old adage, like, if it ain't broke, don't fix it. And so you're saying that you're seeing that in your journeys.

00;19;22;16 - 00;19;23;11
Dr. Grant Gardner
I am.

00;19;23;16 - 00;19;41;19
Dr. Hunter Biram
All right guys, last question. And then we'll wrap this up when you guys walk the listeners through the example provide in table three of the journal article. So you know this is where you look at the indemnities and the premiums over time. Is this a real farmer and what implications does this have for future enrollment decisions.

00;19;41;22 - 00;20;00;14
Dr. Grant Gardner
Yeah I actually have a story about this one. So I'll explain that. And then I will let Anil take over and talk about what this really means. And so when we are working on putting this paper together for the Journal of Asthma, we submitted it some other places. And one of the comments we got back was we would love a case study.

00;20;00;14 - 00;20;20;21
Dr. Grant Gardner
And I was talking at a conference in Louisville one day, and I got a call from a farmer that said, I want to send you my crop insurance data and my FSA payments because I don't think this is working. And so this is data from a real farmer in Kentucky. He just sent it over on a scribbled down piece of paper with a picture, which I translated into this nice table we have here.

00;20;20;21 - 00;20;39;04
Dr. Grant Gardner
But basically his thoughts were why my indemnities don't match what I've spent on my cost. And so I don't think crop insurance is working. And so I did and my thoughts at that time. But I'll pass this over to a Neal to kind of explain how that works.

00;20;39;07 - 00;21;12;01
Enil Serrano Puerto
Yeah. So I think sometimes the crop insurance farmers sometimes see it only as cost and they don't see it also like in in revenue because, I mean, and we can also tell by like looking at this table because I mean some, some of the years they didn't receive indemnity payments. And for example, we see in 2008, 2010, 2014, 2017 to 2019 and 2022 and 2023, that farmer didn't receive any payments.

00;21;12;01 - 00;21;36;03
Enil Serrano Puerto
So we kind of like tell the skepticism that he had in doing those years. But if we take a look, for example, on the years that he did had payments or like if you even take a closer look and see how FSA government payments also complementary like way over paid all of the total costs that he paid for all the way from 2008 to 2023.

00;21;36;05 - 00;22;15;04
Enil Serrano Puerto
Like it offsets the payments, the the cost that he had in crop insurance cost. And for example, we see that the loss ratio was 95.44, which means that it was almost nearly actually for premium rates where he was paying. So we see like outcropping France, the works in the long term to give stability to farmers. And like we really appreciate the farmer to giving access to to his cause and his indemnity payments so that this way, like other farmers, can also feel like reflected or, I don't know, like in some sense feel like this could be something that they are also having their operations so that they keep having cropping trees.

00;22;15;04 - 00;22;36;13
Dr. Grant Gardner
And so when I was talking to him, kind of through some of these numbers, my big point was that crop insurance covers deep losses. And so if you look through this table in 2013, he had almost over a $200,000 indemnity payment. And my question was, do you think you'd still be farming if you didn't have crop insurance in 2013?

00;22;36;13 - 00;22;52;20
Dr. Grant Gardner
And I said, so if we look across all these years, yes, you have spent more on crop insurance than you paid, but your operation may not be running. And he actually said, that's a really good point. I hadn't thought about it that way. And I think that's that shows that crop insurance is working and smoothing out those losses.

00;22;52;20 - 00;22;57;05
Dr. Grant Gardner
And it's allowing producers to keep farming, especially in years that are really bad.

00;22;57;07 - 00;23;13;12
Dr. Hunter Biram
Yeah. I mean, the classic example that I give is car insurance. I mean, you don't want that car insurance to pay out, right? Because that implies that you got into an accident, someone rear ended you the same in crop insurance. If you have to take a big indemnity, chances are you don't have a crop to market. And there was a really tough weather event.

00;23;13;13 - 00;23;45;07
Dr. Hunter Biram
Drought, direct hurricane, whatever that may be, took out your crop, so you had to take the indemnity. But that indemnity helps you to pay some debt obligations, maybe pay back the input suppliers. And so it's not supposed to be something that you make money on necessarily. That's not really what it's about. It's about risk management. And as Anil so eloquently described earlier, what crop insurance does is for that risk averse producer, which in in most cases is most producers, they're willing to pay a little bit, take that that shallow losses is what we would call it, $20 an acre, even $30 an acre.

00;23;45;08 - 00;24;03;00
Dr. Hunter Biram
I know that can get kind of expensive, but let's just say $20 an acre. That is like a loss to the farmer because it's an expense that's a cash outflow. But year after year per acre, you're going to pay that. But in that year, like you said in 2013, in this example from the journal article that we put in there, that 200,000 was much needed.

00;24;03;01 - 00;24;18;17
Dr. Hunter Biram
It's not that farm was raking in the cash and going and buying a new duly truck, you know, like and going by and side by side. I know that that money was already obligated to the lender, to the input suppliers. And so that helped the farmer stay afloat. And so we're not here saying that, you know, everybody has to get it.

00;24;18;17 - 00;24;28;20
Dr. Hunter Biram
But we are saying that it can be very helpful in managing risk and keeping you afloat in those really tough years. So with that, guys, any other comments?

00;24;28;22 - 00;24;51;02
Dr. Grant Gardner
I think, well, the big thing, I'll put a plug out there for the article itself. The reason we did publish this, and the Journal of Managers and Rural Appraisers, is that it can be written to an everyday person. And so that's the way this article is written. And so it's written for all the listeners, etc., to go out and read through and, you know, teach yourself how crop insurance works.

00;24;51;02 - 00;25;16;19
Dr. Grant Gardner
It's almost written more, as, you know, an Arkansas or a Kentucky Extension article. And that's what I really love about it, because if I think about all three of us in this room, one of our big goals is to educate. And I think that's exactly what this article does. And so I implore everybody to go out and give this a read, because I do think if you're making a crop insurance decision, it walks through a lot of complicated aspects of the program and makes them easily understandable.

00;25;16;20 - 00;25;41;08
Dr. Hunter Biram
Totally agree. And one thing I'll add is I like this Arkansas versus Kentucky type of analysis. And we cover what, five different crops I suppose. So we got cotton, rice, corn, soybeans and wheat. So I mean we cover a lot of crops, different regions. And so you can see where there's a lot of similarities, but there's a few differences here and there too, just to kind of show you that regional perspective of how crop insurance would work in the southern region.

00;25;41;08 - 00;25;52;10
Dr. Hunter Biram
So for that, guys, I just want to say thank you so much for taking time to be on the podcast today. Thank you so much for the collaboration. It was a really fun project to work on, had a lot of fun with you guys and look forward to future collaboration.

00;25;52;15 - 00;25;53;19
Enil Serrano Puerto
Thanks for having us.

00;25;53;23 - 00;25;59;26
Dr. Hunter Biram
Awesome. All right y'all. Well, that's it for this episode. Y'all stay tuned for the market report. Thank you.

00;25;59;29 - 00;26;29;03
Evan Ware
Back with your market report. As of June 4th, 2026, Corn July futures are $4.25 per bushel. That's down 13% from a month ago and down 3% from a year ago December corn futures are $4.52 per bushel. That's down 10% from a month ago and up 2% from a year ago. Rice July futures are $12.40 per 100 weight. That's up 6% from a month ago, but down 8% from a year ago.

00;26;29;05 - 00;26;54;26
Evan Ware
Rice September futures are $12.77 per 100 weight. That's up 6% from a month ago and down 7% from a year ago. Soybeans July futures are $11.30 per bushel. That's down 8% from a month ago and up 8% from a year ago. Soybeans November futures are $11.42 per bushel of sound, 5% from a month ago, and up 11% from a year ago.

00;26;54;26 - 00;27;20;06
Evan Ware
Cotton July 26 futures are 74.89 cents per pound. That's down 10% from the month ago and up 15% from a year ago. Cotton December futures are 78.49 cents per pound. That's down 6% from a month ago and up 16% from a year ago. Wheat July features are $5.82 per bushel. That's down 9% from a month ago and up 7% from a year ago.

00;27;20;08 - 00;27;46;13
Evan Ware
The US weekly average for peanuts is $450 per ton. That's up 6% from a month ago and down 9% from a year ago. Moving on to our fertilizer prices, urea is currently $710 per ton. A month ago, it was $811 per ton. Three months ago it was $710 per ton, and a year ago is $560 per ton. Ammonium nitrate is currently $575 per ton.

00;27;46;14 - 00;28;10;14
Evan Ware
A month ago, it was $578 per ton. Three months ago, it was $450 per ton, and a year ago it was $410 per ton. Ammonium sulfate is currently $512 per ton. A month ago, it was $535 per ton. Three months ago, it was $516 per ton, and a year ago was $556 per ton. DAP is currently $894 per ton.

00;28;10;18 - 00;28;36;00
Evan Ware
A month ago it was $891 per ton. Three months ago, it was $808 per ton, and a year ago it was $730 a ton. Triple Super phosphate is currently $803 per ton. A month ago is $791 per ton. Three months ago it was $720 per ton, and a year ago it was $590 per ton. Potash is currently $457 per ton.

00;28;36;01 - 00;29;05;26
Evan Ware
A month ago, it was $448 per ton. Three months ago, it was $450 per ton, and a year ago it was $368 per ton. Arkansas Highway Diesel is currently $4.91 per gallon. A month ago, it was $5.11 per gallon, and a year ago it was $3.18 per gallon. Arkansas Farm Diesel is currently $3.96 per gallon. A month ago, it was $4.27 per gallon, and a year ago was $2.27 per gallon.

00;29;05;28 - 00;29;18;15
Evan Ware
The Mississippi River at Memphis is currently reading 19.84ft. A year ago it was 15.08ft. Thanks for tuning in to another episode of Morning Coffee and Ag Markets. We hope that you have a great week.

00;29;18;16 - 00;29;45;08
Dr. Hunter Biram
If you would like to learn more about the Fryar Price Risk Management Center. We encourage you to go to. Fryar, f-r-y-a-r, Risk, r-i-s-k, center dot uada dot edu. If you want to check out the newsletter that Is associated with this podcast, we encourage you to visit the website and check out podcast newsletters. When you go to podcast newsletters, you should be able to see the most recent newsletters that we published, and within each one of those newsletters, you should be able to click on a link to subscribe if you haven't subscribed already.

00;29;45;10 - 00;29;48;04
Dr. Hunter Biram
Thank you for tuning in and we'll catch you next time. Bye bye now.