No easy answers to crop insurance questions
But there are good questions they can ask themselves and their crop insurance agent to find the answers.
This year’s drought resulted in an “unexpected swerve” for many farmers, who found themselves underinsured or discovered that their crop insurance program was not working as they expected, said
Juris suggested that producers look back 10 years on their gains and losses, analyzing their risks.
âWe pay a lot of money for these insurance policies,â he said. “Most of us probably wouldn’t buy a high-priced piece of equipment and then opt out and not care.”
“You do not have the guarantee of the market price, you have the guarantee of
Fortenbery explained how the
The agency reviews the daily futures prices for soft red winter wheat on the Chicago Stock Exchange from
To calculate the price of soft white wheat in the
Farmers have the option of purchasing a crop insurance income product with inclusion of the price of the crop, Fortenbery said. If the harvest price is higher than the guaranteed price for the previous September, it is this price that makes it possible to calculate the expected income and to determine the payment of compensation.
For a higher premium, farmers could buy the crop price exclusion, meaning they wouldn’t benefit from a price increase between when they bought their insurance policy and when they bought their insurance policy. they collected it. It’s not a popular option, but some growers are using it, Fortenbery said.
âIt’s really important to think carefully about what you’re trying to insure, how much risk you’re willing to take, and how much risk you have to give up when choosing between these products,â he said.
For example, if the cost is
Juris recommended that farmers be practical and ensure that their crop insurance agents provide adequate service and correct documentation. He noted that this is the knowledge he has acquired over the years through “error and trial”.
âIf you have an agent who sends you a stack of paper in an envelope with a sticky note that says ‘Sign’ and no explanation, I would probably look for another crop insurance agent,â he said. âI like to know what I’m signing, especially when we pay large amounts. It’s not just something I want to sign without understanding exactly what I’m certifying and verifying. “
Crop insurance officers should explain the difference between insurance plans and keep farmers up to date with new developments, usually mentioned through producer associations or events, said
âA good agent is going to explain new things that you might be particularly interested in,â Thiel said. “(If) you bring it up and they don’t know what it is, your agent might not be the most up to date with new things that are going on.”