In 2014 farmers will find that premiums will drop, but so too will the revenue guarantee provided by crop insurance. In addition, revenue guarantees are tied to new crop futures prices that will drop roughly 10% to 20% from those in 2013.
A farm level revenue protection or RP coverage this year with the same actual production history or APH, may fall below the cost of production for many farm operations. Most 2014 crop costs will remain high, lagging the decline in commodity prices, putting a squeeze on margins.
(Originally posted: March 2, 2012) Even the best crop insurance plan is of little use if the right information isn't collected and submitted on time. If certain actions aren't completed by the necessary date, you may not receive full benefit from the risk protection you've selected.
William Edwards, Iowa State University Extension ag economist, reminds farmers to make a list of the important dates that apply to their insured crops and to mark their calendar.
The table below shows important dates to be noted and observed for corn and soybeans in Iowa. In some years the actual date may be the first business day after the listed date if the listed date falls on a weekend or holiday. Dates may vary for other crops and states. Note that there are two changes in deadlines for 2012--acreage reporting date and billing date--highlighted in the table. For details see Important Crop Insurance Dates, File A1-50, at www.extension.iastate.edu/agdm.
Mark your calendar—here's a rundown on key dates and provisions
Sales closing date. This is the last date to apply for coverage for any of the various Federal Crop Insurance Corporation (FCIC) policies, or to make changes in coverage from the previous year. Farmers must decide by this date on type of policy and level of protection they want. Closing date varies by crop and by state. Private crop hail insurance policies can often be purchased throughout the growing season, however.
Earliest planting date. Crops planted before the earliest planting date will not be eligible for replanting payments.
Final planting date. Acres planted on or before this date receive the full yield or revenue guarantee that was selected. Acres planted after this date get a reduced guarantee. Acres not yet planted as of this date should be reported to the insurance agent within three days.
Late planting period. For certain crops a late planting period begins after the final planting date and lasts for 25 days. For acres planted after the beginning of this period, the value of the yield or revenue guarantee is reduced day by day. This reflects the lower yield potential for late-planted crops.
After the late planting period ends, coverage remains at 60% of its original level. This is true even if the farmer is prevented from planting the crop, as long as he/she doesn't plant a substitute crop for harvest. Prevented planting coverage doesn't apply to Group Risk Plan (GRP), Group Risk Income Plan (GRIP) or catastrophic level coverage (CAT) policies.
Acreage reporting date. Farmers must report number of acres of each insured crop they have actually planted by this date, or within three days of when they abandon their intentions to plant it. For crops planted after the final planting date, the number of acres planted on each day must be reported. All acres of an insurable crop in which they have an interest must be reported, whether the acres are actually insured or not. Other information to report includes the farmer's share in the crop, cropping practice and type, the planting dates (if after final planting date) and any acres they were unable to plant.
Billing date. Although premiums are payable as soon as the crop is planted, the policyholder won't be billed until the premium billing date. Generally, this is near harvest. Interest charges begin to accrue 30 days after this date on any premium payments not yet paid, at 1.25% per month. If an indemnity payment or replanting payment is made, any premiums still owed will be deducted from these payments.
End of insurance period. Following this date, a farmer no longer has any production or revenue guarantee on the crop. This date is the earliest of the following: date crop is harvested, abandoned, or destroyed; date final adjustment on losses is made; or a specified calendar date for each crop.
Date to file notice of crop damage. This is the last date to report actual production or quality losses in order to receive an indemnity payment. Notice is required within 72 hours of discovery of damage, but not later than 15 days after the end of the insurance period.
Policy termination date. If premiums aren't paid by this date the insurance coverage for the following crop year will be terminated.
Cancellation date. This is the last date to give written notice to the insurance company if the grower doesn't wish to carry crop insurance next year. Otherwise, the policy automatically renews for another year.
Production reporting date. This is the date to submit the most recent crop production records used to recalculate actual production history (APH) yield. Production reporting date is usually 45 days after the policy cancellation date. If the acreage reporting date (for the following year) is earlier than this, then that is also the last production reporting date.
For farm management information and analysis, go to ISU's Ag Decision Maker site www.extension.iastate.edu/agdm and ISU Extension farm management specialist Steve Johnson's site www.extension.iastate.edu/polk/farmmanagement.htm.
Related: Find Your Local FSA By State