What do I need to do to get crop insurance?

Josh in Pa · Mar 12, 2013

I am a young farmer and have never had crop insurance before. I have also never reported acres to FSA. I will have about 75 acres of corn this year, and 70% insurance is peanuts compared to any of the other inputs. What is involved with reporting acres to the fsa, and is crop insurance worth while? Thanks for any help,
Josh

GeneMO · Mar 12, 2013

The FSA office should provide you with a list of certified agents who sell crop ins. in your area.

Make sure it is an experienced agent, who has a farm background.

I would also prefer not to deal with an agent who is also your loan officer with a bank or Farm Credit Services.

Gene

Allan in NE · Mar 12, 2013

You can take you prior years' load tickets (if you've been farming for at least 4 years) and the agent can verify the yeilds against the county plot maps.

You still have to sign up and be married to the damned FSA tho.

However, if this is your first year, they will beat you to death on any payback and it isn't really worth while.

Allan

David G · Mar 12, 2013

The land that you are farming should provide the basis. It will be estimated from average county yields if not registered before.

I was thinking the deadline passed in Iowa.

Josh in Pa · Mar 12, 2013

This will be my 4th year. I have elevator tickets for the previous 3 years. I am pretty independant, pay my inputs out of pocket and don't really want to have anything to do with the fsa. But if we had a crop failure, even 75 acres of seed, fertilizer, and rent is a nice little chunk of change to be out.
Josh

johnwayne360 · Mar 12, 2013

Deadline in Iowa is Mar 15, dont know about Penn.

Allan in NE · Mar 12, 2013

I'd go for it with three years behind you.

The agent will want to verify with your local elevator and you'll have to take the county average for that fourth year.

Do the 70% option. Figures out the best.

Allan

David G · Mar 12, 2013

yup, 3 days left, my insurer called me last week so I knew we were close.

fordfarming · Mar 12, 2013

as you stated 70% coverage is peanuts! and it will only pay peanuts unless complete disaster. like buying liabilty ins never going to pay you basically cost premium. if your going to buy buy what will pay back not just cost peanuts!

Erik Ks farmer · Mar 12, 2013

As the others have said, deadline is March 15th, you can not insure your crop if not signed up before that date. Check with the agency that you have your farm policy through they most likely sell crop insurance. Do it asap.

Anonymous-0 · Mar 12, 2013

what do you need to do to get crop insurance on 75 acres? get a good brainwashing by the insurance industry and you'll be set. if you are operating on such thin margins that a complete loss in one year sends you to the poor house, then you should rethink your operation. in other words, don't throw your money away on insurance that you will probably never need. when you get 750 acres and quit your day job, it's a different story.

tomstractorsandtoys1 · Mar 12, 2013

I just got my first this year from Farm Credit.I do not report acers to FSA because we feed all our crops and do not get in the Gov. programs.I took in my past 4 years of yeild history based on tons of silage harvested and dry corn stored and did not have any problems.I got 70% for $27 per acre and you do not pay untill Sept or Oct. You must sign up before the 15 of March.

David G · Mar 12, 2013

Yes, Farm Credit is who my insurance was with. I only did 65% last year and about lost my shirt on contracts. It was a year when the 85% guys did out all right.

GeneMO · Mar 12, 2013

You do not have to participate in any FSA programs to buy crop ins.,
as long as you are not inelligible, such as growing Maryjane or something.

March 15 is the deadline to purchase the coverage on spring crops.

Having crop ins., no matter how small your operation gives you some flexibility. You can forward contract more of your crop without as much worry of filling your contract.

If you want to purchase it, dont listen to detractors. It's not their decision.
If you did loose a crop, how long will it take you to get back into the same position you were before the loss?

Grampajohn · Mar 12, 2013

I am a claims manager at one of the top 3 companies premium wise. You have to sign the application no later than 3/15. As far as yield most likely you can get 100%nof the county T yield unless your father farmed the ground prior to you then you could use his yields. You do not have to report anything to fsa as of today but that most likely will change with the new farm bill, there is a proposal that will bring back linkage.

As for agents find an agent that only does crop insurance. They tend to be the most knowledgeable about the policy and requirements. I would stay away from large corporate agents like farm credit or Ag stores that sell insurance on the side. Experience has tought me that most corporate agents don't know anything about the program and they have no problem lying to you.

Nice · Mar 13, 2013

Do you have an adequate line of credit? If you are paying inputs out of pocket and you had a total failure, then the next year you could farm using your available credit. And in the meantime you pay next to nothing or zero interest on the available credit depending on your terms and how much you draw out at a time. Most guys have to farm that way anyway. Plus a 50% yield crop (gasp!) would come close to paying 70% of your raw inputs anyway unless you"re paying real high cash rent. I hate to see you give away the first $30/acre profit. But if you go that way remember that the $30 is to be saved back in case you need it, not spent elsewhere. Also, the FSA subsidizes an advantage for everyone else if you don"t take the direct payment. I don"t believe in it myself, but the local BIG young farmers are taking it and they figure it into their cash rent, so I"d be at a $25/acre competitive disadvantage if I declined it.

This is the advice I"ve gotten from an older trusted mentor, I"m no expert myself.

GeneMO · Mar 13, 2013

Brainwashing by the ins. industry? Do you know how crop ins. works? Crop ins. is 100% controled by the Risk Management Agency (RMA), a part of the USDA. The rates, rules, coverages, high risk areas, everything comes 100% from the Federal Government. The ins. companies are allowed to market, sell, and adjust the product under a Standard Reinsurance Agreement (SRA).

Unless an agent doesn't understand something, or makes a mistake, everything they have to sell or tell a farmer comes from the USDA.

And all companies have the same basic product, same rules, and same premium.

If you go to 10 agents, and give them the same yield figures, and compare the same levels and options, then they should be able to quote you the same premium to the penny.

Gene

Anonymous-0 · Mar 13, 2013

i know the part about where i give someone a bunch of money that i'll never see again.

GeneMO · Mar 13, 2013

Then dont participate. It is a free country. No one is holding a gun to your head.

Gene

Anonymous-0 · Mar 13, 2013

i don't. i was just replying to the OP's question. then you get on here with your big, brainwashing words and talking about a 75 acre farm using contracts to market his crop. insurance is one of the biggest rackets in the world and your posts are evidence of that.

GeneMO · Mar 13, 2013

You know, to this person, 75 acres may be a big investment. And if feels the need to protect his investment, then he should be able to.

I insure my little $125,000 house, cause if I lost it I would be in a world of hurt. A man with a 6 million dollar mansion would laugh at that small of a loss.

I guess you have deep enough pockets that you can stand that type of loss.

I am glad for your success.

This country was built on small business and especially small farmers.

Gene

GeneMO · Mar 13, 2013

Wonder if I know you John? I work claims here in MO.

Gene

Anonymous-0 · Mar 13, 2013

very few campaign for smaller farms than i do. if you felt the same you wouldn't suggest they sell something that doesn't exist yet (contracting) and then manage that risk by buying insurance.

GeneMO · Mar 13, 2013

Forward contracting, insurance, borrowing money, managing risk, all of those practices have been around for decades, even centuries in some cases. Why would I not advocate using all the legal tools that are there to protect a persons investment and try to maximize profits?

What soured you on insurance?

Gene

GeneMO · Mar 13, 2013

Just a few stats.

86% of the farmland is covered by crop ins.

Farmers paid 4.1 billion in premiums in 2012

They collected 14.1 billion so far, and they expect it to go to 16 billion.

Only half of the policies last year collected an indemnity.

And contrary to what some folks think. You dont want to collect on your insurance. You are always better off with a good crop.

And those older farmers remember years like this when everyone had to whine and cry and beg for congress to pass an Ad Hoc disaster program. Well you dont hear than any more do you? That is because crop ins. works so much better.

Gene

Nice · Mar 13, 2013

I read where in Indiana last year each dollar spent averaged 3.7 in idemnity. Thats an awful small amount to me considering what yields were here. I might as well save my dollar for 3.7 years? A DISASTER year the payback is only 3.7 to 1?

super99 · Mar 13, 2013

I guess I'll give my opinion. I have 70 acres, 65 tillable that was my Grandparents. I bought it in 2000. I raise 1/2 corn & 1/2 beans. It is a sandy hill farm, all hel land. I have had corn yields from 180 down to 65 bpa and beans from 60 down to 11 bpa, just depends on if it rains or not. I've bought guaranteed revenue coverage every year. Without it, I would probably be renting it out instead of farming it. I've collected 4 times since 2000, more than made up for my premiums. Wouldn't farm without it. As for the piddly 70% you refer to, my corn yield average for crop insurance is 145bpa, and 42bpa for beans. This years figures are as follows

rice; $5.65, bushel trigger; 101.5 bushels, acre guarantee $573.48, premiuim $16.13. Beans: price; $12.87, bushel trigger; 29.4 bushels, acre guarantee $378.38; premium; $10.26. That is enough to cover my expenses and farm payment if I should not get a crop. Seems pretty cheap to me.
Oh, I didn't collect any for 2012, corn made about 3 bpa above the target, and beans made about 10 bpa above the target. For the year we had, I'm glad for what I could raise. Lots of folks in central and southern Ill. didn't have ANYTHING to harvest. I will keep buying it as long as they sell it. Chris

GeneMO · Mar 13, 2013

Crop insurance was never desigened to make a profit for the farmer, just put money back in him pocket so he could farm again, or not loose the operation.

Self insuring, like you suggest is OK, if you can survive long enough to put a nest egg aside.
Which most people can't.

So you stick your premium in a piggy bank for 4 years and think you are getting along pretty good, then year five you have a total loss. How many years does it take you to recover and get back to where you were?

So lets say your crop ins. premium for corn was $25 an acre (not saying it is that much). So by not having crop ins. for 4 years you have $100/ acre put in the piggy bank. But year 5 you are wiped out. Crop ins. would have paid you like $475 an acre. So you about broke even, with just $75 in the hole, so you start building up the piggy bank again, but this time disaster strikes only 2 years later. Now what?

And that doesn't take into account that the crop ins. has some replant coverage built in, and prevented planting built in.

It must make a lot of folks sleep better at night if 86% of the acreage is insured.

I would say that if all your land and machinery is paid for, and you dont have an operating loan to speak of, then self insuring would be the way to go.

Just buy some cheap hail ins.

Gene

Iowa Jim · Mar 13, 2013

There are only three things a new farmer needs to buy in my opinion: A good planter, a good sprayer, and Crop Insurance.

I can say without a doubt we would no longer be farming if we had not purchased crop insurance over the past three years. While it has not given us profits, it has allowed us to pay all of our expenses and live to fight another year.

We increased our coverage to 85% of our APH this year with a RP policy which included the Fall PRicing option.

Jim

Nice · Mar 14, 2013

I can see both sides of the coin. I personally don't have it, but I see what you are saying and respect your opinion.

mudcreek183 · Mar 14, 2013

Get the insurance no matter how many acres you farm my nephew has it on 70 acres the Co. doesn't care how many acres you farm. i have had it for year and it can be a life saver on a bad year.

What do I need to do to get crop insurance?

Member

Well-known Member

Well-known Member

Well-known Member

Member

Member

Well-known Member

Well-known Member

Member

Well-known Member

Well-known Member

Member

Well-known Member

Well-known Member

Member

Member

Well-known Member

Well-known Member

Well-known Member

Well-known Member

Well-known Member

Well-known Member

Well-known Member

Well-known Member

Well-known Member

Member

Well-known Member

Well-known Member

Member

Member

Member

Similar threads