Crop Insurance UpdateCrop Insurance UpdateNovember 2, 2007November 2, 2007

Team Grain Friday WiscLine Team Grain Friday WiscLine TeleconferenceTeleconference

Paul D. MitchellPaul D. Mitchell

Ag and Applied Econ, UW-MadisonAg and Applied Econ, UW-Madison

608-265-6514, 608-265-6514, pdmitchell@wisc.edupdmitchell@wisc.edu

OverviewOverview

Focus on corn and crop insurance Focus on corn and crop insurance issues for this fallissues for this fall

What’s coming from my extension What’s coming from my extension program on crop insurance for this program on crop insurance for this winter/springwinter/spring

What’s happening in other states What’s happening in other states that farmers may ask you aboutthat farmers may ask you about

Future changes (2009 and beyond)Future changes (2009 and beyond)

Quick Overview of PoliciesQuick Overview of Policies

Four main types of policiesFour main types of policies Yield Insurance: yield loss triggers Yield Insurance: yield loss triggers

indemnityindemnity Individual policy: APHIndividual policy: APH Area-wide (county) policy: GRPArea-wide (county) policy: GRP

Revenue Insurance: revenue loss Revenue Insurance: revenue loss triggers indemnitytriggers indemnity Individual policy: CRCIndividual policy: CRC Area-wide (county) policy: GRIPArea-wide (county) policy: GRIP

Individual PoliciesIndividual Policies APH and CRC: farmers could already have APH and CRC: farmers could already have

filed claims for 2007, or be doing so nowfiled claims for 2007, or be doing so now Recommendation: if you think you have a Recommendation: if you think you have a

loss, loss, contact your crop insurance agentcontact your crop insurance agent Documentation of losses and practices is keyDocumentation of losses and practices is key Likely leave corn standing for loss adjustmentLikely leave corn standing for loss adjustment Stalk rot/lodged corn a lossStalk rot/lodged corn a loss Aflatoxin etc. a lossAflatoxin etc. a loss Wildlife damage a loss: deer, wild hogs, geese, Wildlife damage a loss: deer, wild hogs, geese,

etc.etc. Alternative uses: be carefulAlternative uses: be careful

Area-wide/County PoliciesArea-wide/County Policies

GRP and GRIP: no indemnities paid GRP and GRIP: no indemnities paid until NASS announces official county until NASS announces official county average yield for 2007average yield for 2007

Sometime next spring before Sometime next spring before potentially get indemnitiespotentially get indemnities

Questions????Questions????

Crop Disaster ProgramCrop Disaster Program FSA announced signup for the CDP on FSA announced signup for the CDP on

October 15, 2007October 15, 2007 For For cropcrop losses in 2005, 2006 and before losses in 2005, 2006 and before

2/28/20072/28/2007 Feb 28, 2007: Means winter wheat or Feb 28, 2007: Means winter wheat or

perennial crops orchards, berry crops can perennial crops orchards, berry crops can qualify for 2007qualify for 2007

Need crop insurance to qualify, NAP Need crop insurance to qualify, NAP coverage acceptable for specialty cropscoverage acceptable for specialty crops

All payments based on crop insurance All payments based on crop insurance data farmer reporteddata farmer reported

Crop Disaster ProgramCrop Disaster Program

Crop yield loss must exceed 35% of average yieldCrop yield loss must exceed 35% of average yield Farmer paid for this loss at a price equal to 42% Farmer paid for this loss at a price equal to 42%

of county price (beyond crop insurance of county price (beyond crop insurance indemnity)indemnity)

Can receive payments up to 95% of crop value, Can receive payments up to 95% of crop value, with a max of $80,000 per farmerwith a max of $80,000 per farmer

Includes Includes qualityquality losses, not just yield losses losses, not just yield losses UWEX agents: may act as 3UWEX agents: may act as 3rdrd party verification party verification Contact FSA office for detailsContact FSA office for details

Questions???Questions???

What’s coming for 2008What’s coming for 2008

I will put out a new “Hints for Using I will put out a new “Hints for Using Crop Insurance in 2008”Crop Insurance in 2008”

I will update my GRP recommendation I will update my GRP recommendation maps for 2008 when have 2008 maps for 2008 when have 2008 premiumspremiums

I will I will notnot update my “Overview of update my “Overview of Federal Crop Insurance in Wisconsin”Federal Crop Insurance in Wisconsin”

Example GRP Recommendation for 2007

Quick List of Things to Quick List of Things to RememberRemember

Farmers must buy insurance by March Farmers must buy insurance by March 15 15

CAT policies are very cheap and will CAT policies are very cheap and will qualify farmer for disaster programsqualify farmer for disaster programs

NAP (non-insured assistance program) is NAP (non-insured assistance program) is CAT policy for specialty crops, so will CAT policy for specialty crops, so will qualify farmer for disaster programsqualify farmer for disaster programs

Encourage farmers to buy CAT/NAP Encourage farmers to buy CAT/NAP policies ($100/crop, up to $300/farmer)policies ($100/crop, up to $300/farmer)

Quick List of Things to Quick List of Things to RememberRemember

Tell farmers to be careful with alternative uses Tell farmers to be careful with alternative uses of insured crops: Don’t pasture drought of insured crops: Don’t pasture drought destroyed corn without permissiondestroyed corn without permission

Double cropping restrictions: cannot take an Double cropping restrictions: cannot take an early cutting of alfalfa and then plant cornearly cutting of alfalfa and then plant corn

Corn maturity restrictions in northern countiesCorn maturity restrictions in northern counties Wheat “T-yields” are low in many counties: Wheat “T-yields” are low in many counties:

nothing farmers can do to get higher coverage nothing farmers can do to get higher coverage until they establish their own yield historyuntil they establish their own yield history

Crop Insurance in Other Crop Insurance in Other StatesStates

Most other states have Revenue Most other states have Revenue Assurance (RA), but not WisconsinAssurance (RA), but not Wisconsin More popular than CRC revenue insuranceMore popular than CRC revenue insurance Some farmers may ask about itSome farmers may ask about it

Biotech Yield EndorsementBiotech Yield Endorsement Approved Sept 12, 2007Approved Sept 12, 2007 Premium reduction if plant triple stack (Bt Premium reduction if plant triple stack (Bt

CB, Bt RW, RR), up to 23% lowerCB, Bt RW, RR), up to 23% lower Piloted in IA, MN, IL, IN, starting 2008 or Piloted in IA, MN, IL, IN, starting 2008 or

20092009

What Changes Are Coming?What Changes Are Coming?

Combo Policy: Released in 2009Combo Policy: Released in 2009 One basic policy with multiple optionsOne basic policy with multiple options Combines APH, CRC/RA, GRP, GRIPCombines APH, CRC/RA, GRP, GRIP No longer sell APH, CRC, RA, GRP, GRIP, No longer sell APH, CRC, RA, GRP, GRIP,

IPIP Expect education programsExpect education programs Will mean RA-like policy for WisconsinWill mean RA-like policy for Wisconsin

AGR-Lite and AGR will be combined AGR-Lite and AGR will be combined into AGRI for release in 2009 or 2010into AGRI for release in 2009 or 2010

What Changes Are Coming?What Changes Are Coming?

Farm Bill: Expect changesFarm Bill: Expect changes USDA Proposal: Supplemental Deductible USDA Proposal: Supplemental Deductible

Coverage: Buy APH and GRP togetherCoverage: Buy APH and GRP together House: tried to pass, but removed at endHouse: tried to pass, but removed at end Senate: just out of Ag CommitteeSenate: just out of Ag Committee

State-level GRIP revenue insurance instead of State-level GRIP revenue insurance instead of farm program price supports for 2010-2012farm program price supports for 2010-2012

Not clear what will finally come out, but Not clear what will finally come out, but expect changesexpect changes

ResourcesResources

Call/email me and I’ll get back to you Call/email me and I’ll get back to you asapasap pdmitchell@wisc.edu 608-265-6514pdmitchell@wisc.edu 608-265-6514

See my web pageSee my web page http://www.aae.wisc.edu/mitchell/extension.htm http://www.aae.wisc.edu/mitchell/extension.htm Overview of Federal Crop Insurance in Overview of Federal Crop Insurance in

Wisconsin (24 page booklet)Wisconsin (24 page booklet) Several short bulletins on various crop Several short bulletins on various crop

insurance topicsinsurance topics

Questions????Questions????