Wednesday, August 10, 2011

How Good Is Crop Insurance: Is This Strange?

From Bloomberg, hat tip Farm Policy:
The worst Texas drought in more than a century has left cotton-crop conditions that rival the Dust Bowl of the early 1930s, forcing farmers to abandon more fields than ever before.
Most growers will at least break even  [emphasis added] this year from insurance claims, with the reimbursement rate on policies higher than the price of New York cotton futures, according to a Bloomberg News survey of seven analysts, brokers and farmers.
 I think there's a problem here, either with crop insurance or perhaps with the writing.  If you look lower in the story, the break even bit may reflect one grower's expectations.  But it appears the insurance covers $1.23 a pound, which doesn't seem right, though I'm stuck in the days of a target price just above $.70.

2 comments:

  1. the price of $ 1.23 is correct, and if the producer had certified organic cotton the price would be $ 1.50

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  2. Gosh, how things have changed. I wonder what Oxfam's take on the world cotton situation is now.

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