How to Find Your Discovery Price

RMA provides a website that shows you the Projected and the Harvest Prices including daily price.

Photo by nathan kosmak on Unsplash

Each year RMA uses certain futures and other cash prices to come up with the projected price for crop insurance and the final harvest price.

As an example, corn projected prices are based on the December contract traded during the month of February. RMA takes the ending value of the contract and rounds the average to the nearest cent. It then takes the average of those prices to come up with the projected price for crop insurance. It also determines the amount of volatility based on the trading activity during that month. Volatility leads to higher premiums if it is high and lower premiums if it is low.

For example, for this year during February, there was very little difference between the high and low price during most of the month. Between February 1 and February 21, the high was $5.98 and the low was $5.91. It was during the last four trading days that the price finally dropped to $5.70 on February 28 which dropped the final discovery price to $5.91.