Iowa State University Extension and Iowa Farm Bureau will address crop insurance and marketing decisions for farmers during a one-hour webinar Wednesday, Feb. 8, 2012. To listen, look and learn from this presentation, all you need to all you need to do is tune-in via your home computer to listen and learn.
As farmers' costs of production increase, risk management tools — including crop insurance and marketing decisions — are vital to the success of their operations. That's why ISU Extension is partnering with the Iowa Farm Bureau to address these topics via a webinar. To access the webinar, go to www.iowafarmbureau.com.
If you want to tune-in to the webinar, you are encouraged to pre-register
"In these volatile times, risk management is more important than ever," says Ed Kordick, the Iowa Farm Bureau Federation's commodity services manager. "Farmers need to understand their options as they look forward to marketing and protecting that next crop." The free, live webinar is part of the IFBF Margin Management webinar series, and features Kordick and William Edwards, an ag economist with ISU Extension.
"The webinar will address the changes for 2012 in crop insurance, including the chance to adjust proven insurance yields to reflect upward trends, and we will also explain the new lower premium rates," Edwards says.
Participants can pre-register and access the webinar at www.iowafarmbureau.com. For more information, contact Kordick at [email protected] or 515-225-5433. The seminar will be recorded; the recording will be available to Farm Bureau members from the IFBF website www.iowafarmbureau.com, beginning February 9.
Note the changes in crop insurance for 2012; sign-up deadline is March 15
While corn and soybean prices have retreated from highs set last August, they remain at lofty levels. With a March 15 deadline looming for farmers to buy crop insurance for spring-planted crops, many will want to push a pencil on projected revenue guarantees on their 2012 crops.
Some experts are predicting lower corn and soybean prices in 2012. Suppose bumper 2012 crops do let prices drift lower into harvest. Buying insurance products that base indemnity payments on planting time prices could be wise. "Buying up to higher levels of coverage may be a strong consideration, especially for corn and soybean growers," says Jan Eliassen, a consultant for the crop insurance industry and USDA's Risk Management Agency.
Thirteen Iowa crops share the March 15 deadline: wheat, oats, forage seeding, sweet corn, popcorn, dry beans, grain sorghum, hybrid seed corn, green peas, soybeans, potatoes and barley. For information on crop insurance choices in your area, contact an agent well before the deadline.
Other changes for 2012. Farmers will have a chance to adjust their production histories to reflect current yield potentials, says ISU's William Edwards. Also, many farmers will see an overall reduction in premiums.
Many farmers have felt the 10-year average actual production history or APH yields used to determine multiple peril crop insurance guarantees did not accurately reflect their current yield potential due to improved crop genetics and practices introduced in recent years. A new feature, the trend-adjusted APH, will address this concern.
Trend-adjusted APH has been approved for both corn and soybeans in most of the Corn Belt, including all counties in Iowa. Basically, a trend-adjustment factor has been estimated for each county. This factor is equal to the estimated annual increase in yield. Here's an example for an insurance unit with 10 years of yield history for corn and an average yield of 163 bushels per acre. Assume the trend adjustment factor in the county where the unit is located is 2 bushels per acre per year.
So 2 bushels are added to each yield for every year since it was recorded. Adjustments range from 2 bushels per acre for the immediate past year to 20 bushels for a yield that was recorded 10 years ago. The adjusted APH yield is now the average of the adjusted fields, 174 bu. per acre, instead of the unadjusted average of 163 bushels per acre. That 174 bu. yield will be used to calculate the unit's crop insurance guarantee in 2012. Maximum adjusted average yield is equal to the highest yield in the years of yield history for the unit, plus the annual trend adjustment.
The trend adjusted APH is available for either yield protection policies, at all levels of guarantee except catastrophic or CAT coverage (50% yield guarantee). Group policies, such as GRP and GRIP, have used trend adjusted county yields since they were introduced and that procedure won't change.
Premium rates lowered. A study of historical crop insurance payments has concluded that loss payments in the Midwest have been decreasing in recent years, and a general reduction in premium rates is justified. Changes in both technology and weather trends are responsible for lower loss ratios. Thus, RMA says 2012 rates in Iowa will be 13% lower for corn and 9% lower for soybeans, on average. Adjustments vary by county. Rates for other crops are being studied and possible adjustments will be made in 2013.
Also, note the biotech discount has ended. The Federal Crop Insurance Corporation Board has determined the approved corn hybrids which qualified for the discount when the program started four years ago are now prevalent enough that it is no longer necessary to maintain a separate premium schedule for them.
* Deadline to buy federal crop insurance in Iowa for 2012 is March 15.
* Relatively high planting time prices for 2012 crops can boost revenue guarantees.
* Crop insurance agent can provide you with more details to make decisions.