When Crop Conditions and Insurance Options Collide

Figure 1. Wheat showing symptoms of drought stress at flag leaf emergence. Note the rolled leaves, bluish color of upper leaves.
( Kansas State University )

When USDA released its yield estimates and crop production numbers this past Friday many farmers exhaled a collective sigh of disgust. While certain states’ crops flourish, drought, greensnap and disease in other states indicate only combines will tell the true yield story of 2018.

In west central Wisconsin, corn and soybean farmer Tony Mellenthin had a fantastic start to the season on his 7,000 acres. That great start could be slipping away, however, as rains become few and far between.

“We’re hot and dry and things are going backwards real fast,” Mellenthin told AgriTalk host Chip Flory. It seems like right as the Aug. 1 USDA crop conditions report came out that hot temperatures, combined with poor rainfall started hurting yields, he added.

“We had a chance for rain last night and didn’t get a drop,” Mellenthin said. “Another small chance here coming up on Monday, but it’s not looking that good because we’re so far behind now in August that we need a lot to catch up.”

Farther south and west, southwest farmer David Nichols might have just received much-needed rain, but that doesn’t mean all is perfect. His corn, soybeans and cattle are thirsty for more rain.

“We’ve been living from rain to rain and I’m a little apprehensive about how much yield has been effected,” Nichols said. “We’re going to start chopping silage next week and that’s two to three weeks earlier than we normally do.

In eastern Nebraska irrigation might have helped save crops from excessive drought and heat stress, but that doesn’t mean Mother Nature has given farmers a free pass. Row crop farmer Tim Gregerson said strong winds damaged his crops.

“We're probably going to have in the neighborhood of 130 semi loads less of corn this fall,” Gregerson said. “[Green] snap anywhere from five to 75% on basically all of our corn.”

Soybeans are still in pretty good shape he says, but their last “good” rain was July 12 with nothing more than a couple hundredths of an inch here and there over the past month. “It’s showing and the dry land crop is definitely fading,” Gregerson said.

Questionable yields and issues often means a call to the insurance adjuster. While insurance decisions might not be top of mind right now, Bob Hartsough, crop insurance agent in Indiana, says farmers need to be thinking about a new option.

“At least know it’s there and consider it,” Hartsough said. “It's called margin protection. It actually has just started the discovery period for your spring guarantee today.”

Sales closing date is the end of September for margin protection. Compared to revenue protection, margin protection has a 95% coverage option and protects leftover margin because it takes into account costs of production.

“[For example] if you’ve got 170 bu. APH on revenue protection policies, or above, you’re going to have, in general, $100 an acre out of pocket for a deductible before it’s going to protect you,” Hartsough said. “On this product you’re less than $40 an acre is all it is before it starts protecting you. At least know [this new option] is there and consider it.”