- Location
- Scottish Highlands
no need to worry about people collecting data about you these days - it can't be shared legally with anyone without your consent
That’s GDPR, isn’t it? Got the EU to thank for that
no need to worry about people collecting data about you these days - it can't be shared legally with anyone without your consent
That’s GDPR, isn’t it? Got the EU to thank for that
As far as I understand the policy can be cancelled at any time same as any other insurance policy can be.
I think it has to run to expiry.Yes but this one is potentially paying out something at the end of it, whereas a car merely goes from being insured to not being insured.
So lets say the price of grain nosedives with a month or two of your contract starting, and you think that this is a short term drop in the market. Can you end the contract and be paid on the basis of the price when the policy is cancelled? Or do you have to wait to the end of the contract to get your payout, by which time the price may have risen again, and you end up with nothing?
Yes but this one is potentially paying out something at the end of it, whereas a car merely goes from being insured to not being insured.
So lets say the price of grain nosedives with a month or two of your contract starting, and you think that this is a short term drop in the market. Can you end the contract and be paid on the basis of the price when the policy is cancelled? Or do you have to wait to the end of the contract to get your payout, by which time the price may have risen again, and you end up with nothing?
You only get paid out after the end date of the policy (if below the insured price).
I think I was wrong to say that it is based on the AHDB price at the end date, I now think that it is the average AHDB price over the 11 months, Richard is confirming this with me.
You can opt to insure for a specific month if you want to at the quote stage.
It took me a while to get my head round this being a true insurance policy, as Clive points out it is nothing to do with speculation or indeed any physical aspect of my grain sales or hedging elsewhere.
Thats rather what I thought. So if the price takes off in the autumn and you sell all your physical grain at a price above your policy guarantee, you can then cancel the policy and pay no more monthly premiums? You've lost any premiums already paid (but have sold at a higher price so are happy) and the insurer has gained the premium already paid and not had to pay anything out?
You only get paid out after the end date of the policy (if below the insured price).
I think I was wrong to say that it is based on the AHDB price at the end date, I now think that it is the average AHDB price over the 11 months, Richard is confirming this with me.
@nickf
Yes there is two options: first is a single calendar month in the future i.e Nov 19. In this example we would payout when we have the November price (usually first week of December). The second option is a multi month average. In multi month for example Milk Price from Jan-June we take the 6 monthly index prices and divide by 6 to get the average. This option would pay out in Month 7 as soon as we have the full 6 months of index prices. Multi month is often slightly cheaper than single month protection, because the average removes some risk for the underwriters- this reduced risk is passed on as reduced premium.
You can opt to insure for a specific month if you want to at the quote stage.
It took me a while to get my head round this being a true insurance policy, as Clive points out it is nothing to do with speculation or indeed any physical aspect of my grain sales or hedging elsewhere.
Correct @GoweresqueThats rather what I thought. So if the price takes off in the autumn and you sell all your physical grain at a price above your policy guarantee, you can then cancel the policy and pay no more monthly premiums? You've lost any premiums already paid (but have sold at a higher price so are happy) and the insurer has gained the premium already paid and not had to pay anything out?
We pay out on expiry of contract...but you can cancel at any time along the way and perhaps get a new contract at a higher start price that is more likely to pay out. Either way, you're never tied into a contract that's not useful for the farmI think it has to run to expiry.
C B
We pay out on expiry of contract...but you can cancel at any time along the way and perhaps get a new contract at a higher start price that is more likely to pay out. Either way, you're never tied into a contract that's not useful for the farm
Hi- if you select to protect a single calendar month in the future, say NOV 19 then we take the 4 weekly prices reported by ahdb in November and divide by 4 to get the monthly average price. If you protect a multiple month average then we do the same thing, but divide by the number of months you protected the farm to get the average over those months. Payout is triggered when we have the latest calendar month price, so the system knows if it’s lower than the start price on your insurance contract then it simply asks you for your bank details and makes an automated payment for the difference x the number of tonnes you protected. Hope that helps- RichardCould you confirm if its the spot price on the last day of the policy that is used for calculations, or an average of the entire period? If an average then how is that average calculated - an average of each daily closing price for example?
Hi @Oscar glad to have you on board. If I can help with anything at all along the way then just shout. 0203 859 9390. kind regards RichardI lisitened to Richard at a meeting explaining Staple 14 months ago and if you look back last year I actually brought this up in a thread on TFF.[don t know how to do links] I have followed this thread again with much intrest and have just done a 250 tonne wheat policy with Staple . Will be intresting if nothing else to see how it works out but the policy cost is affordable [£730]and as a tenant farmer with borrowings and a tight cashflow at times is giving me protection from a unforeseen price drop independently of the actual physical grain.
Well i have bitten the bullet and taken out a small policy for 150 Tonnes of FW for November to try this new system out.
If November wheat on the index is below £141.83 then i will be quids in
Interestingly when i called a merchant for a spot price for 150T Nov FW ex farm he bid me £141.00
From that it almost appears that i have put a bottom in my market price for nothing. Lets see what happens.
Well i have bitten the bullet and taken out a small policy for 150 Tonnes of FW for November to try this new system out.
If November wheat on the index is below £141.83 then i will be quids in
Interestingly when i called a merchant for a spot price for 150T Nov FW ex farm he bid me £141.00
From that it almost appears that i have put a bottom in my market price for nothing. Lets see what happens.
Well I've not done anything yet but even paying £5.34 a ton (incl TFF Discount) to ensure Wheat never gets below £150.59 ton between now and Nov seems even tempting.
The other way of looking at it is we're not really insuring for the next couple of months as it looks fairly steady anyway so your paying for latter months.
One thing I've not got figured in my head yet. If for example I insure a ton of wheat for say £150 and it costs me £5 ton so that ton owes me a fiver (£145 - its a bit more than a fiver but for the purpose of this)
So someone does this mean the lowest price I will take for my insured ton of Wheat all year (presuming I've got all year to sell it) is in effect £145? What have a missed out? Would I take the chance to sell all your wheat at an absolute minimum of £145 ton? Yes, probably.