CROP INSURANCE UPDATE BULLETIN

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February 2015 • Issue 16-1

Mapping Service: GIS Instead of GPSWith the changes in technology for reporting acres using Map Based Acreage Reports (MBARS) and Global Imaging Satellite (GIS) mapping, we have seen the demand for our GPS Mapping Service decline over the past couple of years. Changes to the crop insurance policy have removed many of the penalties for misreported acres that existed in prior years. Therefore, we feel we can provide better, more efficient service to our customers using the GIS technology so we are discontinuing our GPS Mapping Service. If you need to have something measured using the GIS method, please contact your agent for assistance.

Don’t Wait Too LateSpring storms can develop at any time on the Plains bringing destruction on your crops without warning. We have the ability to set up your crop hail coverage well in advance of the storm season so you’re never caught without coverage on your crop. American

AgCredit writes crop hail insurance through a number of insurance companies so we can compare rates in your area to provide the best value for your coverage. You may have interest in high deductible policies to keep the cost down or basic coverage for those pesky shallow losses that steal your profits – we offer a wide selection of products and options to meet your needs. You may even want to consider the Harvest Payment Plan coverage offered by many of our companies. Don’t wait too late….give us a call to talk crop hail insurance today.

Farm Bill Changes to Crop Insurance: Elections You Need to Make

There are some elections you need to make on your policy before the March 15 Sales Closing Date (SCD) to take advantage of the improvements to crop insurance contained in the Farm Bill. Each of these may impact coverage or premium so you want to discuss them with your agent or customer service representative (CSR) before making an election for the 2015 crop year. Here are the items you need to review with your Agent or CSR:

n Coverage Level by Practice (LP) – producers who have both irrigated and non-irrigated practices can now elect one coverage level for all irrigated acres and another coverage level for all non-irrigated acres on a crop/county basis. Premiums will be based upon the practice and coverage level elected. No new administrative fee will be charged for the election.

n Enterprise Unit (EU) – producers may elect one unit for all acres of a crop in a county in order to obtain a substantially higher subsidy level and premium discounts than received for optional or basic units. To quality, you must plant acres in at least 2 sections and each section must contain at least 20 acres or 20% of all acres in the Enterprise Unit. The premium reduction provided by the EU election may allow you to carry a higher level of coverage for the same money.

n Enterprise Unit by Practice (EP) – if you have both irrigated and non-irrigated acres, you may elect separate Enterprise Units by practice. In order to qualify, you must meet the Enterprise Unit requirements for both your irrigated and your non-irrigated acres.

n APH Yield Exclusion Option (YE) – this option may exclude low yields from your APH databases when calculating the Approved Yield

for each unit. If a crop year yield is lower than 50% of the 10 year simple average of planted acre yields for the crop in the county, then that yield is automatically excluded when calculating your Approved Yield for the unit. Once elected all qualifying yields will be excluded unless you opt out for a specific yield. Depending upon the location of your farm, this can significantly increase your Approved Yield. However, it may also significantly increase your premium.

n Supplemental Coverage Option (SCO) – this is additional county-level coverage to ensure against “shallow losses” above your MPCI coverage level. It is only available for acres enrolled in the Price Loss Coverage (PLC) program through USDA-FSA. This coverage insures the value of the crop between your MPCI coverage level and 86% of the crop value as defined in the policy. Claims are settled based on County yields after FCIC data is released during the following crop year.

n Stacked Income Protection Plan (STAX) – this is a new area-based crop insurance option for upland cotton producers. If you are an Upland Cotton producer in Kansas or Oklahoma, ask your agent about STAX.

If you have interest in any of these new crop insurance options, please contact your American AgCredit Agent or Customer Service Representative to set an appointment to discuss your options before March 15.

We appreciate your business!!

Do You Want to Improve Your Claims Service?We can help improve the time it takes to get a claim paid if you will provide the following:

z Active email address – like other service providers, crop insurance companies and adjusters are utilizing electronic mail to communicate and move data at a more rapid pace. If you provide your active email address, we can communicate with you using secure email technology to speed up the claim process. Please provide your email address to your agent, customer service representative or record it on your next reporting form so we can speed up the process.

z Direct Deposit Authorization – all of our represented crop insurance companies offer the service of sending your claim payment directly to the account you authorize for payment. This can save anywhere from 3 to 5 business days that are currently lost due to mail time. Even if you have an Assignment of Indemnity, our agents will work with you and your banker to deposit claims payment funds in authorized accounts in most cases. Talk with your agent about Direct Deposit and cut out those costly mail delays.

z Current Cell Phone Number – during heavy claims periods, adjusters often need to reach you as they are on the road or in your area. Having your cell phone number allows them to reach you while you are in the field or on the go to ask questions or line up a time to meet you to settle the claim.

Josh Hoeme Crop Insurance Specialist Concordia and Salina

Josh grew up in the small Western Kansas town of Scott City. He attended college at Kansas State University where he received his bachelor’s degree in Agricultural Business and proceeded to get his Master’s degree in Agricul-tural Economics. After college he worked on the family farm which consists of wheat, milo and corn, as well as a commercial feedyard operation. He then started working for Farmers Mutual Hail Insurance of Iowa, there he gained knowledge of the crop insurance industry and a passion for crop insurance. An opportunity arose in Concordia as a Crop Insurance Specialist and in July he will have been with American AgCredit for four years. Josh and his wife Rachael currently reside in Salina and have two chil-dren Sophia (6) and Griffin (2).

Beginning Farmer and Rancher (BFR)If you’re beginning your farming career, this may be good news for you. Qualifying Beginning Farmers and Ranchers may receive benefits under a new program which provides improved access to crop insurance risk management tools.

Benefits OF the BFR program include: n Premium subsidy increased by 10%

n Yield Adjustment Option enhanced to 80%

n Reduced administration fees

n Ability to use production history of entities where they were previously employed or helped to manage

To qualify as beginning farmer and rancher, you must not have actively operated and managed a farm or ranch in any county/state for more than 5 years. Exclusions are available for years you farmed while less than 18 years of age, when in active military service, or enrolled in higher education as defined in the policy. Your sales agent will be happy to provide you with the application and additional information concerning this new program for Beginning Farmers and Ranchers.

Grazed Out Wheat? Short-Rate Your Premium

Often market conditions change and producers decide to hay, graze or destroy wheat they initially planted for harvest. If you are in this situation, you can reduce your crop insurance premium by notifying your agent that you want to “short-rate” your wheat. The agent will need to know exactly which acres you intend to graze, hay or destroy. In order to obtain the discounted premium, you will need to sign a revised acreage report and return it to your agent prior to the March 15 deadline for submission to the insurance company. Once the insurance company has approved the revised acreage report, they will adjust the wheat premium on the acres “short-rated” and will send a revised Schedule of Insurance. There are a few things you need to know before using this short-rate option:

n Once the acres are revised and removed from coverage they can’t be added back to the policy at a later date.

n If you harvest short-rated acres, the harvested production from the short-rate acres will be pro-rated over the insured acres. This additional production could prevent you from receiving a loss payment on the insured acres.

n If you destroy acres prior to harvest without submitting a “short-rate” revised acreage report, the destroyed acres will be considered “destroyed without consent” by the insurance company and create a zero in your APH database.

Give us a call if you are considering grazing, haying or destroying acres prior to the March 15 deadline so we can help you submit a revised acreage report to the insurance company. We want you to have the best experience possible with your wheat coverage.

SPOTLIGHT ON…