By Yangxuan Liu
For peanut farmers, understanding how crop insurance projected and harvested prices are determined is essential for purchasing crop insurance with confidence. The projected price determined in early spring guides how much crop insurance coverage a peanut grower can expect. Later in the season, the harvest price determines whether an indemnity payment is triggered if market conditions fall short.
The U.S. Department of Agriculture (USDA) Risk Management Agency (RMA) sets the peanut crop insurance projected and harvest prices using the Peanut Formula Price (PFP). Because peanuts do not have an active futures market, their crop insurance projected and harvested prices are based on the futures prices of related commodities of wheat, cotton, soybean oil, and soybean meal. The market behavior of these commodities has historically correlated with peanut prices.
The PFP is calculated from the December futures contracts of these four commodities traded during the peanut crop insurance price discovery period within the insurance year. USDA also establishes a loan rate for in-shell peanuts, which serves as a price floor for both projected and harvest prices used in crop insurance. If the calculated PFP falls below this loan rate, the loan rate becomes the effective minimum, ensuring that coverage does not drop below a guaranteed level, even during a market downturn.
Factors that determine PFP are announced annually by the USDA and vary by production year and by sales closing date. For peanut crop insurance, the sales closing dates include January 31, February 28, and March 15 (Kalli, Liu & Biram, 2025). For the 2026 crop year, the following links take you to the RMA technical pages with current peanut factor values: January 31, 2026, February 28, 2026, and March 15, 2026.
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