It’s getting down to the wire for making a decision on crop insurance with the March 15 deadline less than a week away. With commodity prices down and cash rent on the rise, margins are thin. Crop Insurance brings farmers a lot of questions including: the level of base prices, coverage levels, differences between policies, etc, which makes for a difficult decision when finding the best fit for your operation.
Crop insurance is not something you buy to make money on, it is something you buy to protect your hard-earned assets.
“Crop insurance is another way to protect the value of your crops, whether they are used as feed for your dairy or sold on the open market,” says Steve Bodart, a financial analyst with Lookout Ridge Consulting, Baldwin, Wis.
Farmers need to approach crop insurance decisions from a risk management point of view. How much risk can your family and operation handle if you have to go through damaging weather or lower grain prices?
Keeping detailed track records of previous yields will help in determining what level of protection is needed. Make sure you are comparing “apples to apples” when comparing crop insurance premium costs for various options or types of crop insurance policies and recognize the limitations of the various crop insurance products.
The average crop revenue election (ACRE) and the supplemental revenue assistance payment program (SURE) were added as part of the 2008 farm bill. The ACRE and SURE farm programs do not replace good crop insurance coverage.
The ACRE program offers an alternative method of calculating farm program payments triggered by crop revenues (yield x price), as compared to the traditional price-based counter-cyclical payments (CCPs).
The SURE program is the so-called permanent disaster program. It is also based on crop revenues in a given year and requires crop insurance coverage.
If you don’t know, ask. A reputable crop insurance agent is the best source of information to find out more details of the various coverage plans, get premium quotes and help finalize 2010 crop insurance decisions.
Also, check your intended seed against USDA’s acceptable hybrids. Enter your state and crop, and then search by hybrid name. USDA has also made some changes in the requirements for enterprise units, dealing with minimum acreage. Your choice may fall toward enterprise units because of a substantial drop in premiums, thanks to lobbying efforts of the National Corn Growers Association.