Six Items to Discuss with Your Crop Agent

Each growing season gives us something unique to remember it by, and 2018 has been no different.  For many in Missouri, what started out as a great planting season gave way to summer drought and was quickly followed by a wet and snowy fall.  Harvest began early in many areas of the state, but continued to drag on into late December as producers struggled to finish harvest.  For some, 2018 has been the gift that keeps on giving – headaches that is.  

Looking into the new year we continue to face a prolonged period of compressed margins and some operations are experiencing changes in their financial position.  We suggest an annual appointment to facilitate conversations regarding changes to your operation or adjustments that may be necessary to improve your insurance coverage.  Here are a few things we believe producers should be focused on regarding crop insurance in 2019.  

1. Market Facilitation Program (MFP) and Crop Insurance

• The MFP program is being administered at your local Farm Service Agency (FSA) office.  We encourage you to contact FSA for details.  In some instances FSA offices have requested crop loss production to document MFP program payments.  If you need any loss information, please contact your agent.  We also recommend that you are careful to submit consistent and accurate 2018 production information to both the FSA office and to your crop insurance agent.

2. Production Requirements

• On-farm storage is being used by many producers as they wait for grain prices to recover.  Producers need to be disciplined in keeping detailed load records and marking settlement sheets or tickets as the grain is sold with what crop year and unit the production is from.  
• Production reporting forms now require a yield type to be submitted with producer certified production history.  Typically, a list of yield types are on the back page of the production report. If more than one yield type represents the production being reported, list the one that is most applicable.  
• During each agent meeting we attend, the insurance companies continue to stress the need for accurate production records.  If you have commingled production between units, be sure that you notify your crop insurance agent and document the commingled production on your production report.  In any audit where production records cannot be substantiated, or where records were reported incorrectly, assigned yields will apply.  These will negatively impact your insurance guarantees and unit structure.      

3. Wheat Destruction

• With wet weather conditions and delayed harvest, sowing wheat has been difficult and we are now hearing reports about poor crop emergence.  This is a good time to remind producers about their responsibility to report any insured crop to their agent before destroying it.  In much of Missouri the timeframe of destruction can determine how a crop planted behind the first insured crop is handled by your insurance policy.  We recommend contacting your agent at the first sign that you think you may wish to destroy an insured wheat crop.

4. Spring Sales Closing Date Decisions (March 15, 2019)

• Numerous crop insurance products are offered in Missouri; however the majority of producers are purchasing a Revenue Protection (RP) insurance policy.  RP policies have two pricing periods throughout the year where commodity prices help establish insurance guarantees.  The first pricing period (called the projected price) is used to establish spring insurance guarantees.  The projected price uses the Chicago Board of Trade (CBOT) prices calculated daily, and averaged during the month of February, based upon the futures contracts for December corn and November soybeans.  The second pricing period (harvest price) uses the CBOT prices calculated daily, and averaged during the month of October, based on the same futures contracts for December corn and November soybeans.  For the standard RP policy, your insurance guarantee will use the higher of the projected or harvest price.  Historically, during times of volatility we have seen RP policies work well for producers.  In light of the continued tariffs and uncertainties in agricultural markets, an RP policy could be advantageous in helping mitigate an unseasonable change in prices.
• During your annual review, please speak with your agent regarding the use of policy options that may allow an increase in your approved yields.  It is important to note that these options do come with a cost; however, it is often beneficial to utilize the options to increase coverage rather than buying a higher coverage level.
• Review available unit structures and make sure they match the goals of your risk management plan.  Unit structure can have a dramatic impact on the cost of insurance but they also have an impact on how losses are calculated.

5. Precision Ag

• We are beginning to see higher adoption rates of producers using precision ag equipment for crop insurance acreage and production reporting.  Likewise, crop insurance companies continue to expand software capabilities that allow for a more seamless transition from your monitor to crop insurance data entry systems.  In an environment of tight margins, accurate acreage reporting numbers are important to be sure you are not being overcharged or under protected.  If you have questions about how your precision equipment might be able to be used for crop insurance reporting, please ask your agent.

6. Planting Dates

• The spring 2019 initial and final planting dates that were recently released for Missouri do not appear to include many changes.  However, as a result of our extended harvest season and field damage caused by wet weather, some producers have considerable field work to complete before they will be able to plant next spring.  Changes over past years reduced the late planting period for corn to 20 days, and may have also changed the final plant dates for your county.  Please be sure to take this into consideration as you review your management plans and contact us if you have questions about specific dates for your area.  

We hope that 2019 is a safe and prosperous year and encourage you to contact FCS Financial with your crop insurance questions.  We have a team of agents located through the state to assist you.