Know your crop insurance, know your farm

We're collecting data and visual observations to make a judgment call on abandoning crops.

With seven days between rain events, we are now in the evaluation stage of this crop. Corn fields range from V8 to VT and soybeans from V4 to R2. Scouts have been out in the fields, and reports are coming in nearly daily.

I have been sorting through images and re-affirming thoughts from the sprayer seat. Some fields are not worth further investment.

This is where knowing your crop insurance comes in. If you carry an enterprise plan, all the farms you operate within each county are grouped together by crop. In essence, good farms can carry the bad ones. This is likely the most popular plan. Many farmers select this coverage because it is less expensive. Generally, the attitude associated with enterprise plans is simply surviving to fight another year. This plan is also practical when farms are in a tighter geographical area.

The other dominate policy sold is optional units. In this policy, county sections control units. All farms in section are grouped together. This plan works well when farms vary greatly, or are more geographically scattered. In this plan, you can have a claim in one section, and the section beside it doesn't work against the claim.

What's your guarantee?

It is also necessary to have an idea what your guarantee is. Simply, this is the averaged actual production history (trend adjusted if selected as an option) multiplied by the insurance level selected on the policy. This could be 50-85%.

Here is an example: the corn APH is 180 bpa, when taken times an 80% insurance level, your yield guarantee is 144 bpa. For 50 bpa soybean APH, the insurance yield would be 40 bpa. (As prices are similar to the spring established price, I am ignoring any possible pricing implications.)


Now, I am looking at the fields and scouting reports to combine that with what I know about how the farm generally behaves. (Go ahead and throw projected weather in there if you have a 60-day forecast you trust.) Since I am on optional units, I am looking at each field and asking the question: How likely is this crop to be below 144 bpa for corn or 40 bpa for soybeans? One who carries the enterprise plan has to look at the farm as a whole and ask the same question. If the answer is yes, I think it is below, no further investment is warranted. You could be throwing good money after bad, and end up netting less.

All this said, according to the insurance policy, you still have to make a good faith effort in growing the crop. I asked my agent what all this involves. He indicated generally this isn't a problem, but suggested having a crop professional make an evaluation (and documenting it) before abandoning a crop.

Bottom line is, cover your bases as you make these decisions, but if you've planted, sprayed, and fertilized, you should be ok.

Next week, I'll cover some of the tactics we are considering to pursue better looking farms. Yes, I said tactics; even though I am trying some of them, I'm still skeptical. This is where fear of leaving bushels on the table can influence decisions. Sometimes, that is good, other times it doesn't work out so well.

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