Farm bill has no affect on crop insurance
DAKOTA CITY – When the 2014 farm bill was signed into law by President Barack Obama on Feb. 7, producers started wondering how the new farm bill will affect crop insurance for the next five years.
According to Dennis Johnson, an Iowa State University Extension farm management specialist, the bill has no impact on crop insurance.
Johnson said the real change is the federal crop insurance program, which has always been separate of the farm bill since 2000, is now part of it.
“Basically they took the entire crop insurance package and dropped it into the farm bill,” Johnson said. “But as far as corn and soybean growers are concerned, it’s business as usual.”
Johnson said he expects premiums in 2014 will “be as cheap as it’s ever been.”
About 40 Humboldt County-area farmers gathered on Feb. 10 to get the latest on 2014 crop insurance programs and options in Dakota City, hosted by Agriperil Insurance agent Tim Burres, of Humboldt.
Agriperil representatives outlined key crop insurance dates to keep in mind, including:
A). March 15 – The deadline for finishing crop insurance business.
B). April 11 – The earliest date for planting corn. Growers can plant earlier, but they forfeit replanting coverage if they do.
C). April 21 – The earliest date for planting soybeans. Growers can plant earlier, but they forfeit replanting coverage if they do.
D). May 31 – The latest corn planting date to maintain insurance coverage.
E). June 15 – The latest soybean planting date to maintain insurance coverage.
F). July 15 – Deadline for reporting planted acres.
G). Aug. 18 – Premiums are due. Penalty interests will begin on Oct. 1.
H). Dec. 12 – End of insurance coverage. The date will be earlier, depending on when crop is harvested.
Burres told his clients that last year’s crop loss payments started in October with a total of $4.8 million paid out on 500 claims based on revenue-based policies.
Another $21,000 was paid on yield protection policies.
Johnson said that producers should be appreciative since crop insurance will have five years of stability now that it is part of farm bill law.
Johnson said the federal Revenue Management Agency has rerated corn and soybeans, which can lead to premium reductions between 15 to 25 percent.
Burres and Johnson said they think most producers will continue to purchase revenue protection-based policies.
In 2013, Iowa had 23.5 million acres under row crop production. Of that 90 percent were insured, and of that portion, 95 percent was insured by revenue protection.
Farmers’ big concern this year, Johnson said, is the drop in commodity prices.
Dr. Elwynn Taylor, ISU’s climatologist, told the Dakota City audience that conditions are looking as if an El Nino weather pattern is beginning to develop in the Pacific.
His predictions for corn are:
1). If there’s El Nino, which produces cool and wet growing conditions, there is a 70 percent chance of U.S. yield average of 166 bushels per acre, which anticipates an average sale price of $3.80 per bushel during 2014.
2). If there’s La Nina, which produces hot and dry growing conditions, the national yield cut be cut to 149 bpa, and an average sale price of $4.55 per bushel.
3). If there’s a neutral pattern, as in 2013, the U.S. average yield could be 162 bpa, with average price of $4 per bushel.
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