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Selling Covered Puts

Summary

In many counties, crop insurance will have rate cuts and an offer to farmers to increase their APH with a trend yield adjustment. Many growers can take the trend yield adjustment to their APH, remain at the same coverage level and will have the same dollar guarantee this year as they had last year with a $6.01 price. If farmers in counties with a large trend adjustment think the premium for the added coverage is too expensive, then they could buy the coverage and sell part of the coverage in the option market.