OMAHA (DTN) -- Midwest corn and soybean growers could see savings of $2 to $3.50 an acre on their crop insurance premiums next year after USDA's Risk Management Agency re-rated the two crops using a new formula.

RMA on Monday announced the results of re-rating states actuarially, using a 20-year rolling average (currently 1990 through 2010).

"On average, these new rates should reduce corn farmers' rates by 7% and soybean farmers' by 9%," said RMA Administrator Bill Murphy. Given most Midwest farmers pay between $30 and $50 an acre for crop insurance, they could see savings of $2 to $3.50 per acre. A few states such as Texas and Pennsylvania will see modest increases because of their loss experience.

"We reviewed our methodology because grower groups said we were letting the bad years have too much weight, and we agreed," said Shirley Pugh, RMA spokesperson. The new methodology should better capture actual results with today's hybrids, she said.

A few months ago, RMA also announced it will make trend yield adjustments to corn and soybean yields in 2012. In effect, this addresses some of the yield drag that corn growers in particular complained about. The combination of these two actuarial changes should give Corn Belt farmers more bang for their insurance buck.

However, given that these changes should improve coverage levels, RMA earlier ended its Biotech Endorsement discount.

Other crops will begin to be re-rated in 2013, said Pugh. "These will include wheat and cotton, with rice, grain sorghum, potatoes and apples to follow."

RMA said it will release its actuarial documents by Nov. 30 reflecting premium rates and other program information that will be effective for the 2012 spring crop season.

The adjustments to the methodology were made based on a study contracted by Sumaria Systems, which examined premium rates and the rating process, followed by a peer-review to provide feedback on the study results. RMA will conduct further review and analysis of both the study's findings and the comments of the peer reviewers, making additional adjustments as appropriate.

Percent Change in Total Rate, Selected States
State	Corn	Soybeans
Pennsylvania	+3	-3
Ohio	-11	-13
Michigan	-7	-12
Indiana	-11	-7
Illinois	-12	-12
Minnesota	-12	-8
Iowa	-13	-19
Missouri	-8	-12
Montana	-11	NA
North Dakota	+7	-5
South Dakota	+1	NA
Nebraska	-7	-9
Kansas	-6	-6
Oklahoma	-8	-8
Texas	+4	-1

Linda Smith can be reached via linda.h.smith@telventdtn.com

(AG/CZ)

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