Farm Management Minute: Your 2013 crop insurance decisions

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Farm Forum

Crop Year 2013: What will it have in store? No doubt it will be very dependent on rainfall and thus your profitability may require a customized risk management plan for your operation. I recall more “normal” years when the company you work with had an update meeting; you’d have a good lunch, listen to an informative presentation, and then likely say “I’ll just enroll in whatever coverage I did last year.” Crop insurance has developed into an important and essential tool of your operation. With the farm bill’s extension, there are no legislative changes to crop insurance for 2013. Given varying levels of premium subsidies, we as producers are given the opportunity to create our own policy guarantee levels by the amount of risk we are willing to carry vs. cost of premiums. The Trend Adjustment (TA) to your APH is in place again this year. This is a way to accelerate the recent years’ increased yield potential into your history. The enterprise unit by crop/county is in place again this year as well as a new product called Enterprise Plus. This allows for different guarantees for each individual unit. Last year’s scenario makes the harvest price option on Revenue Protection appear to be a necessity. This year’s spring price appears will be near $6 on corn. The harvest price may be $4, or it could be $8, who knows?

Changes for 2013: 1.) New breaking specifications have changed. 2.) Specialty Crop coverage additions. 3.) Supplemental Policies: Total Weather Insurance, Enterprise Plus coverage, Replant Buy-ups, Greensnap/Wind Endorsements, Field Grain Fire Coverage.

Take some time and effort with your agent into researching how the policy offerings will work into your operation much like you would a new machine, or agronomy concept. This management decision could be very crucial for 2013. But as always, don’t beat yourself up if you didn’t choose the “perfect” plan. Make a decision based off of the information and resources you have at the time and be satisfied, much like marketing. Remember, this is insurance, the aim is not to need to use it!

Contact the SD Center for Farm/Ranch Management @ 1-800-684-1969, or http://www.mitchelltech.edu/sdcfrm.