Crop Insurance Considerations

Crop Insurance Considerations

Jason Alexander

DTN Ag Summit

Farm Credit Mid-America

1

Thank You

• Securing the Future of Rural Communities and Agriculture

• Take the time to answer questions and tell your story; especially to the next generation

Farm Credit Mid-America 2

About Farm Credit Mid-America

• Member-owned cooperative

• Part of the nation wide Farm Credit System

• Financial strength in numbers

• $22 billion in assets

• Four-state territory (IN, OH, KY, TN)

• Nearly 100,000 members

• More than 1,100 staff in 91 offices

• Loans, Leases and Crop Insurance


Our Crop Insurance Team

• Crop Insurance at Farm Credit Mid-America

• 52 crop insurance team members

• 2.5 million acres insured

• Non-commissioned agents

• Team approach

• We seek to understand your operation, provide solutions to problems, and provide value to you based on your needs

• We work together to assist you in making educated decisions on all the options available


Today’s Topics

• What are some things you can look for on your crop insurance policy to make sure you are getting added value at little to no additional cost?

• Are you missing bushels/$$ on any of these?

• Yield Exclusion and Trend Adjustment

• What’s on your Schedule of Insurance

• Added Land

• Adding Irrigation

• No Longer Farming

• Private Products


Trend Adjustment

• Trend Adjustment addresses yields that do not accurately reflect current yield potential due to improved genetics and practices

• A trend adjustment factor is used for each crop and county

• Will affect guarantees and premium

• TA is applied to, and could improve, each of your APH databases

• Example to come


Yield Exclusion

• What is it and how does it help • It allows you to exclude an actual yield from a crop year from

your APH

• It can increase your approved APH

• It has to be a year when the county average was less than 50% of the 10yr. county average

• You can opt in or out by farm/unit

• If one farm had a good yield in a year when others were very bad. You need to be aware and review this.

• It must be elected on your application/renewal

“From a farmer perspective, I don’t see any reason why this yield exclusion wouldn’t be used. This is the biggest improvement to Crop Insurance since we added the harvest price.”

Art Barnaby, Kansas State


2015 Non-Irrigated Corn Yield Exclusion (YE)


Trend Adjustment and Yield Exclusion


Yield Exclusion quote


80% Coverage without TA & YE

75% Coverage with TA

70% Coverage with TA & YE

Yield Exclusion

• You don’t want to just pay attention to coverage levels and the associated premium anymore - it’s the dollar guarantee that matters

• You must pay attention to the years that are eligible and how that change affects each of your units

• You can opt in and out by year by unit. This takes good communication with your Crop Insurance Specialist

• Every bushel and every dollar guaranteed matters.


Schedule of Insurance Optional Units Summary


Schedule of Insurance Enterprise Unit Summary


Added Land with T-yield for Corn

• This unit was set up as added land for corn

• This producer’s SA yield is 163bu/acre

• You should get the higher of the SA or T-yield

• The fix added 15 bushels and $57.90 guarantee an acre to this farm


Added land with T-yield for Soybeans

• This unit was set up as added land for soybeans

• This producer’s SA yield is 50 bu/acre

• You should get the higher of the SA or T-yield

• The fix added 10 bushels and $44.25 guarantee an acre to this farm


No Longer Farming a Farm/Unit

• The APH database still exist unless you designate as “No Longer Farming”

• What does this affect? • Your simple average. Remember we just discussed getting the

higher of the two when you have added land

• By removing the NLF database, you could increase your simple average in turn “finding bushels/$$”

• It could also be helping you in which case you would not want to designate as NLF

• The farm in the previous example had two NLF databases removed at the same time which increased the corn SA from 159bu to 163bu

• This simple fix added $15.44 to this new farm’s APH for 2016


Adding Irrigation in a County

• Have you recently or will you be adding irrigation in a county for the first time?

• Did you know your agent must complete a special request from RMA for this farm/unit to pick up the previous yield history on this farm

• If not, this farm will receive the T-Yield

• These special requests take time to complete and must meet very specific deadlines

• If this particular farm had a non-irrigated APH of 170 and the irrigated T-yield for that county is 150, you would have missed 20 bushels and $77.20 an acre


Private Products

• There is an array of private products available.

• Additional price discovery periods

• Margin protection

• Unit structure options

• Hail products and price can vary. Cash discounts are available on some

• Be diligent and seek to understand what is available, and how it fits your operation

• Work with someone who can bring a team of experts to the table to analyze your situation and provide solutions based on your needs and plans


Today’s Topics

• Understanding your MPCI options and knowing what to look for

• High level overview of things that may add up to bring added value for little to no additional cost

• Crop insurance is your only subsidized input cost. Take full advantage of it

• Challenge • Let Farm Credit help you review your policy documents

• Seek to understand what you have

• Let us know how we can help



Thank You

Jason Alexander

Vice President – Crop Insurance

Farm Credit Mid-America

[email protected]

Crop Insurance Considerations

Documents

Transcript of Crop Insurance Considerations