The 2014 Farm Bill brought many attacks on crop insurance. One of many, is the proposal of means testing or capping premium support to large farmers. It is widely expected for those same topics to arise during the debate of the next Farm Bill. If we remove acres from the program, it can have effects on all farmers who participate. Below is some information provided by the Crop Insurance and Reinsurance Bureau in regards to effects a premium cap or means testing could have. [Read more…]
With all the rain throughout the southern half of Illinois, many growers are faced with a decision – do I replant or leave it? As we look at it today, those decisions might be a few weeks away, but you need to have the information available to make an informed decision as to how it might affect you crop insurance policy.
Replanting – If you choose to replant a crop, consider the following:
One of the main performance measures used to evaluate the Federal Crop Insurance program is the loss ratio. Loss ratio is a performance metric that is calculated by dividing total losses by total premium paid. [Read more…]
Throughout parts of Illinois, Diplodia Ear Rot has reared its ugly head. There are many contributing factors that can cause Diplodia, but at the end of the day it can hurt your bottom line when you factor in the effects. Diplodia is not a toxin that is covered with Multi-Peril Crop Insurance. However, the results of Diplodia – low test weight and kernel damage – are covered to some extent.
There is a discount schedule that assigns discount factors as the direct result of low test weight and/or kernel damage. Discount factors apply when test weight is below 49 lbs./bushel and/or kernel damage above 10%. These discount factors will be applied directly to your production and if production is discounted enough, a loss could be triggered. [Read more…]
Multi-Peril Federal Crop Insurance does have a replant provision. Replant benefits are only available on a Yield Protection (YP) or Revenue Protection (RP) policy type. This benefit is designed to only pay one time per crop, per year. Below is the exact wording from the Basic Crop Insurance Provisions as it relates to when replant payments are not made:
No replanting payment will be made on acreage:
- On which our appraisal establishes that production will exceed the level set by the Crop Provisions;
- Initially planted prior to the earliest planting date established by the Special Provisions; or
- On which one replanting payment has already been allowed for the crop year.
For corn, the planting date must be between April 1 or 5 and June 5. For soybeans, the planting date must be between April 15 or 20 and June 20. The benefit will pay 8 bushels per acre for corn and 3 bushels per acre for soybeans using the spring price for each crop. For 2016, corn will pay $30.88 (8 bu. x $3.86) per acre and soybeans will pay $26.55 (3 bu. x $8.85) per acre. This will only pay if the acres to be replanted is the lesser of 20 acres or 20% of the unit. Also, a replant claim must be filed prior to replanting the field.
Aside from the replant benefits associated with Multi-Peril Federal Crop Insurance, there are additional endorsements/products you can purchase that can allow for more flexibility and coverage if replanting is needed. These are not designed to provide multiple payments, but would be additional coverage and/or cover earlier planting.
Question: How much should I expect from ARC-CO Payments? And when?
Answer: The 2015 Agriculture Risk Coverage at the county level (ARC-CO) program payments will be made this fall. Since the program’s start following the 2014 Farm Bill, an estimated 90% of corn and soybean base acres nationwide were enrolled in ARC-CO.
Given current market conditions, there are many Illinois counties expecting a 2015 payment for both corn and soybeans.
- Per base acre payments for corn and soybeans are estimated to range from $0.00 – $80.00 and $0.00 – $55.00, respectively.
- Prices will be finalized in September and payments will go out in October.
- It is likely reductions will be made to the estimated 2015 payments due to Congressional sequestration limiting the size of the federal budget.
For more information on your county’s estimated payments, check out this farmdoc daily article and speak with your crop insurance specialist.
Question: When do I have to have my acreage reported?
Answer: July 15
Question: When is the sales closing date?
Answer: March 15
Question: What has changed in the crop insurance program from last year?
Answer: Producers are required to sign an AD-1026 conservation compliance form by June 1, 2016 to be eligible for federal crop insurance subsidies. Failure to do so would require the producer to pay the full amount of the premium.
There was a clarification by the Risk Management Agency (RMA) as to how to calculate APH on added land when taking the yield exclusion(YE). If a producer decides to exclude an approved year of production from their data base as allowed by the RMA and they add land, the calculation for determining the APH data base for added land uses the adjusted yield from existing farms and not the trend adjusted (TA) average.
Question: When are the crop insurance bills due?
Answer: The Approved Insurance Providers (AIPs) that Farm Credit Illinois works through sends out bills in early September and payment is due by October 1.