Audio courtesy of Susan Carter with USDA.
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On Wednesday USDA announced they’d be changing the way they calculate crop insurance premiums. While currently, the premium rate is calculated with equal weight given to each year since 1975, an independent peer-reviewed study suggested that USDA instead calculate a 20-year moving average, beginning with the present year. In the 2012 crop year, USDA did so, offering new rates in most American counties for corn and soybeans. Premiums on other crops such as wheat, sorghum, rice and cotton will be offered in 2013.
USDA’s Risk Management Agency Administrator Bill Murphy says one of the advantages of the updated premium calculations is that it’s a much more precise system.
