Variable Price Option

The Variable Price Option is available for producers who want an insured price that better reflects the value of the current year’s hay crop. A market survey is completed in September to determine the final insured price.

Under this option, there is no cap on the maximum value for the forage insurance price. If the market price for hay rises over the course of the year, producers selecting this option will see the full price increase for their forage claim. The final price for a crop can decrease by a maximum of 50 per cent in relation to the base price for the crop if the final price decreases.

The premium is based on the historical relationship between the base price forecasts in the spring and the actual market prices in the fall. The premium costs are known in March regardless of the direction the prices will move in the fall. Premiums will be higher to mitigate the risk of price uncertainty. The dollar guarantee will still change based on the fall market survey.