Crop Insurance and Replant Decisions

Recent adverse weather conditions may force some growers who have already planted to replant.

If you believe replanting may in your best interest, check the replant provision in your crop insurance policy and immediately contact your insurance agent to get the paperwork started. [Catastrophic (CAT) and Area (Revenue) protection policy do not have replant provisions.] 

The following guidelines, which come from the USDA Risk Management Agency's Loss Adjustment Standards Handbook, will give you an idea of what to expect from crop insurance for replanting.   To qualify for a replanting payment:

1.     The insured crop must be hit with an insured peril (excess moisture, frost, hail, etc.).

2.     Your approved insurance provider must determine that it is practical to replant. (This is why it's best to contact your insurance agent immediately.)

3.     Acres being replanted must have been initially planted on or after the earliest planting date.  

4.     Appraised expected yield must be below 90% of the guarantee yield on acreage intended for replant.

5.     Acreage replanted must be at least the lesser of 20 acres or 20% of the insured planted acreage for the unit.  

6.     Approved insurance provider must give consent to replant. 

7.     The replanting payment will be equal to the projected price multiplied by a maximum bushel factor.  For 

2014 corn and soybean projected prices are $4.62 and $11.36, respectively. Maximum bushel factors are eight bushels per acre for corn and three bushels per acre for soybeans. 

For example, your insured corn crop was hit with excessive moisture. You planted corn on May 1, which is past the earliest planting date ofApril 10.  Appraised expected yield is now 70 bushels per acre (bpa). Actual production history (APH) is 140 bpa. You insured using a Revenue Protection policy at a 75% coverage level using the projected price of $4.62 per acre.  Your yield guarantee would be 105 bpa (140 APH yield x 75% guarantee).  Applying Rule 4 from above, 90% of your yield guarantee is 94.5 bpa (105 x 0.9).  Your expected yield of 70 bpa is less than 94.5 bpa (90% of guaranteed yield).  Consequently, you would receive a replant payment of $36.96/acre (8 bpa x $4.62, the projected price). 

From the example we can see that qualifying for a replanting payment hinges on the producer's yield guarantee.  Selection of a lower coverage level implies a lower yield guarantee and a smaller chance of qualifying for a replant payment.  However, when extreme events occur it is likely everyone will qualify for a replant payment.  If you are unsure whether you may qualify for a replant payment, your first step is to contact your crop insurance agent.

Cory Walters
UNL Extension Crop Economist

Cumulative Precipitation Forecasts 5 Day Total

Farm Bill Goes To Committee Wednesday, October 30th

The Farm Bill finally goes to committee tomorrow (Oct 30^th). The main difference between the two branches of Congress is the SNAP program, or better known as Food Stamps. The House is looking to cut the funding of Food Stamps by 4 billion a year whereas the Senate is looking to cut the funding by 400 million a year. 

 

The highest impact on daily life if there is no new Farm Bill or extension of the 2008 Farm Bill will be the impact on Dairy prices which will revert back to 1930’s and 1940’s permanent farm law. The effect this will have is that the government will pay quadruple the current prices it pays for dairy products, thusly switching the buyer of dairy products from the consumer to the government and therefore raising prices to the consumer as well.

Regardless of which version of the bill that is passed or whether or not a compromise is met. There will be significant savings to the government in the next Farm Bill. With the current hardships the government is facing it just makes common sense to get this piece of legislation completed. Leaving one big question....

Does common sense still exist in Congress?

Farm Bill Progress

 With the government shutdown officially over, real talks on the farm bill can begin. The House has appointed 29 members to the conferees following the Senates lead who appointed 12 members as conferees. While there are vast differences to the proposals brought by the two chambers of Congress, hopefully this is the step needed to bring compromise and finally give us our new farm bill. We are in desperate need of a solution so that American farmers can finally have some piece of mind and plan accordingly.

Stay tuned to this blog and our Twitter for more information on this developing story.

 To learn more on the differences of the two proposals visit FAPRI at the following link. http://www.fapri.missouri.edu/outreach/publications/2013/FAPRI_MU_Report_06_13.pdf

Crop Insurance Claims May Not Be Paid During Government Shutdown

How will the government shutdown affect your claim payments?

With the shutdown, the crop insurance companies are no longer able to clear policies and claim information through the FCIC clearing house for accuracy. Insurance companies may elect to either pay the claim prior to clearing the information through the FCIC or they will delay the payment until the information has been deemed to be accurate. This could mean waiting until the government is fully restored to get paid on your claim.

If the crop insurance companies elect to pay the claim prior to clearing the information through the FCIC, there is a chance that the claim will later need to be revised. This revision could either require you to pay back a portion of the claim or could result in another payment being made.

Get more updates on crop insurance and free resources for farmers at http://www.growers-edge.com