With crop prices at record highs, the South Dakota Corn Growers Association (SDCGA) reminds producers to protect themselves and utilize crop insurance as a key marketing tool. As the March 15 crop insurance deadline is right around the corner, producers have opportunity to maximize their crop insurance coverage for the upcoming season.
Congress has made policy changes impacting crop insurance which directly affects producers’ bottom line and South Dakota producers should be aware of tax law changes and disaster and crop insurance programs.
Planting, growing, and harvesting crops this year will be more costly than for any other year. Land, fuel, fertilizer, seed, and chemical costs have skyrocketed – along with machinery costs and nearly all other expenses. Additionally, most world-wide commodity stocks remain at very low levels; which means that adverse weather during this year’s crop-growing season could result in significantly higher commodity prices at harvest.
Several types of crop insurance coverage are available for South Dakota crops. Due to recent high commodity prices, producers need to be aware that additional coverage can be purchased or added to existing policies. For example, the Harvest Price Option (HPO) is available as an add-on to a Revenue Assurance (RA) policy, and is the only policy which offers uncapped price protection for producers who suffer an eligible covered crop loss, and commodity prices dramatically increase.
The recently passed stimulus package contains important tax incentives which could help producers reduce their 2008 income taxes. Producers are encouraged to visit with their tax preparers for full details. One area to inquire about is the increased elective expensing limits under Section 179 of the IRS Tax Code, and the “bonus depreciation” provisions.