South Dakota Crop Insurance Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the South Dakota Crop Insurance Exam. Study smart with flashcards and multiple choice questions; all questions feature hints and detailed explanations. Ace your exam effortlessly!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

Which option is a key factor in determining the price range for YP?

The type of crop
Local market conditions
The Producer’s yield history
Commodity Exchange Prices

The correct answer is: Commodity Exchange Prices

The correct choice highlights the significance of commodity exchange prices in determining the price range for Yield Protection (YP) insurance. Commodity exchange prices serve as a benchmark that reflects market expectations for the future value of crops. These prices are influenced by a multitude of factors, including supply and demand dynamics, weather conditions, and international market trends. By assessing these prices, insurers can better understand potential revenue losses based on the expected market value of the crops, which directly impacts the insurance pricing. While factors like the type of crop, local market conditions, and the producer's yield history certainly play important roles in the overall context of agricultural operations, they do not directly influence the market price range as commodity exchange prices do. The type of crop affects production decisions and insurance specifics, local market conditions can influence selling prices but are less universally applicable, and a producer's yield history provides a measure of potential loss but does not establish the price framework. Therefore, commodity exchange prices are a central element because they anchor the values used in calculating insurance premiums and claims, making them a key factor in the establishment of the coverage range for YP.