Mike's Blog

Insights from the President of ProAg

A Few October Observations from MC

by Mike Connealy on 10.20.2012

October has been a fairly slow month for any meaningful news on the crop insurance front. A few observations from MC:

  1. Corn and soybean harvest in the Midwest has been moving toward conclusion at a near record pace. Soybean yields have been generally well above expectations. Corn yields have turned to slightly higher than expected even in the drought states.
  2. Corn and soybean 2012 harvest prices have dropped during the critical month of October. This, in my opinion, is due to the better than expected yields, world supply and demand, contracted 2012 harvest delivery to buyers soaking up all the short term capacity and commodity speculators unwinding “long” positions.
  3. The corn and soybean harvest price drops seem to have leveled off. We still have until Halloween to finalize the numbers, which might inch up or down some from the current projection. This can be found at http://www.rma.usda.gov/tools/pricediscovery.html . These lower prices open up the slim possibility that a geographically diverse AIP might actually eke out a positive underwriting gain for 2012. In any case, our ProAg UW loss expectations are better than they were a month ago.

    Harvest results outside of the corn belt appear to be average or slightly better with the exception of the dry land cotton crop in Texas, which will have significant losses.

  4. Congress is not in session as election efforts dominate the political front. Farm Bill and fiscal cliff likely to be taken up during the lame duck session.
  5. Agent profit share from 2011 reinsurance year will soon be paid. RMA has been slow to provide the necessary reports to allow payment and in fact, none of the AIP’s have actually received our 2011 UW gain. RMA claims it is all “on schedule” and that the October monthly accounting report for 2011 was never promised to be ready in “early October”. This could drag on for another week or more…
  6. While October of 2012 has been slow on the news front, MC has endured an even slower schedule. On October 2nd, I went under the scalpel for a total knee replacement. Two plus weeks later and am continuing physical therapy from home and getting around slowly with a cane. The ProAg senior team has picked up whatever slack might have resulted from this event and I thank them for their support. My family support, especially from my wife Lea, has been above and beyond the call of duty. This is a true test of “for better, for worse”…

Anyone contemplating a similar procedure on their knee (I am surprised by the number of people that are considering knee replacement for themselves or a family member) can drop me a note at mc@proag.com and I am happy to discuss this modern surgical miracle. The number one reason that people put off such a procedure is “I am too busy”…


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