March 17 is crop insurance deadlineIt doesn’t get much attention outside agriculture, but a key date on most farmers’ calendars is upon them. March 15 is the normal deadline for buying or modifying crop insurance for most spring-planted crops. Farmers, working closely with their insurance agents, typically make their final decisions on 2014 crop insurance in the first two weeks of the months.
By: Jonathan Knutson, Agweek
It doesn’t get much attention outside agriculture, but a key date on most farmers’ calendars is upon them.
March 15 is the normal deadline for buying or modifying crop insurance for most spring-planted crops. Farmers, working closely with their insurance agents, typically make their final decisions on 2014 crop insurance in the first two weeks of the months.
Because March 15 fell on a Saturday this year, the deadline was pushed back to Monday, March 17.
Experts who talked with Agweek on Monday said area farmers, on balance, have increased their coverage levels from a year ago.
“The tighter margin (on projected 2014 crop) profits has encouraged them to increase their coverage,” says Kent Thiesse, farm management analyst and vice president with MinnStar Bank in Lake Crystal, Minn.
For most farmers, the higher coverage level justifies the higher premiums charged, says Andy Swenson, farm management specialist with North Dakota State University Extension Service.
Premiums for higher coverage have dropped from a year ago, further increasing the appeal of higher levels, he says.
Prices have dropped sharply in the past year, reducing the rate at which crops can be insured. Because crop insurance prices are lower, premiums also are lower than they were a year ago.
In early March, the Risk Management Agency, the U.S. Department of Agriculture agency that administers the federal crop insurance program, released the prices at which crops raised in 2014 can be issued. The insurance prices were determined by February market prices.
Here are the per-bushel insurance prices in the Upper Midwest for the region’s three major crops.
•Wheat — $6.51 per bushel in 2014, down from $8.44 in 2013. The record price was $11.11 per bushel in 2008.
•Corn — $4.62 per bushel in 2014, down $5.65 in 2013. The record price was $6.01 per bushel in 2011.
•Soybeans — $11.36 per bushel in 2014, down from $12.87 in 2013. The record price was $13.49 per bushel in 2011.
In recent years, farmers on balance have had a coverage level of 70 to 85 percent. Higher coverage provides more protection, but at a greater cost.
Many farmers who had a coverage level of, say, 75 or 80 percent last year, raised that level to 80 to 85 percent this year, experts says.
Federally subsidized crop insurance allows a farmer growing an insurable crop to select a level of coverage and corresponding premium. The federal government pays the rest of the premium. In 2012, the government paid, on average, 62 percent of the premium, according to information from the Congressional Resource Service.
“It’s kind of a no-brainer” to use federal crop insurance when 62 percent of the premium is paid by taxpayers, Swenson says.
Look for a more detailed article about 2014 crop insurance trends in the March 24 issue of Agweek.