New crop insurance system may alter yield estimates, cost

24.02.2012 57 views
New crop insurance system may alter yield estimates, cost

A change in crop insurance is designed to allow farmers to insure a greater yield for their crops. The change will bring production history data up to date with advances in technology in the industry. Agents from Raleigh Insurance of Inman and Little River attended a company spring update meeting last week that detailed the changes.

A change in crop insurance is designed to allow farmers to insure a greater yield for their crops.

The change will bring production history data up to date with advances in technology in the industry.

Agents from Raleigh Insurance of Inman and Little River attended a company spring update meeting last week that detailed the changes.

These changes come from the U.S. Department of Agriculture’s Risk Management Agency.

The pilot program allows corn and soybean producers with at least one out of four years of yield records to choose a trend-adjusted actual production history yield endorsement, according to agriculture.com. They may make this selection through March 15.

Coverage has previously been based on data collected during the past 10 years. However, recent genetic improvements and technology advancements have increased crop production at a rapid rate, making those numbers unreflective of the changes.

The trend-adjusted actual production history yield endorsement will use more recent data to recalculate production history. If technology would allow a farmer to produce a higher yield, the adjustment would allow the farmer to get insurance on that higher yield.

Terri Bornholdt, Raleigh Insurance agent, said this change will affect each producer differently.

“In a lot of cases, it’s important to meet with the agent and see how the trend will affect their yields,” she said. “It's not for everybody, but for a large percentage of farmers, I think it is a tool they will want to look into.”

Since the new endorsement will base calculations on recent history, new farmers will not be affected as much as those who have been in the business a significant amount of years.

“It can change their coverage quite a bit,” she said. “It affects each policy differently, depending on how many years of history they have in their database. It just depends on your own farming history.”

Although the change offers a number of benefits, Bornholdt said one downside would be a possible increase in policy premiums.

Premium rates for soybean and corn crops will be rerated, with Kansas seeing a decrease of 5 to 10 percent.

“Most farmers will be delighted, because it’s a win-win for them,” she said, noting this adjustment is a rare occurrence. “It’s good news for our farmers.”

A change in crop insurance is designed to allow farmers to insure a greater yield for their crops.The change will bring production history data up to date with advances in technology in the industry.

Agents from Raleigh Insurance of Inman and Little River attended a company spring update meeting last week that detailed the changes.

These changes come from the U.S. Department of Agriculture’s Risk Management Agency.

The pilot program allows corn and soybean producers with at least one out of four years of yield records to choose a trend-adjusted actual production history yield endorsement, according to agriculture.com. They may make this selection through March 15.

Coverage has previously been based on data collected during the past 10 years. However, recent genetic improvements and technology advancements have increased crop production at a rapid rate, making those numbers unreflective of the changes.

The trend-adjusted actual production history yield endorsement will use more recent data to recalculate production history.

If technology would allow a farmer to produce a higher yield, the adjustment would allow the farmer to get insurance on that higher yield.

Terri Bornholdt, Raleigh Insurance agent, said this change will affect each producer differently.

“In a lot of cases, it’s important to meet with the agent and see how the trend will affect their yields,” she said. “It's not for everybody, but for a large percentage of farmers, I think it is a tool they will want to look into.”

Since the new endorsement will base calculations on recent history, new farmers will not be affected as much as those who have been in the business a significant amount of years.

“It can change their coverage quite a bit,” she said. “It affects each policy differently, depending on how many years of history they have in their database. It just depends on your own farming history.”

Although the change offers a number of benefits, Bornholdt said one downside would be a possible increase in policy premiums. Premium rates for soybean and corn crops will be rerated, with Kansas seeing a decrease of 5 to 10 percent.

“Most farmers will be delighted, because it’s a win-win for them,” she said, noting this adjustment is a rare occurrence. “It’s good news for our farmers.”

Source - mcphersonsentinel.com

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