Deadline Approaching: Develop A Crop Insurance Strategy Now02/25/2016
March 15 is the deadline for farmers in the Midwest to enroll corn and soybeans in the federal crop insurance program. If you enrolled last year, that coverage continues unless you decide to change your policy.
Either way, now is the time for farmers to consider how much coverage they should purchase. Dustin Johnson of E-Hedger thinks farmers should buy substantial coverage.
“You have more bushels to sell with a higher policy,” he explains. “So automatically you can sell at a lower price and still be above break even if you get up to these higher levels.”
Johnson says if enough extreme weather chips away at yields, farmers might be able to see corn prices that meet break-even prices in the $4-$5 range this summer. His concern? Summer is not a time farmers will be interested in selling grain because their time and attention are usually focused on the crop in the ground instead.
Crop insurance has been the target of federal budget cutters. It was targeted for cuts in 2015 until it was finally restored by a broad sweeping spending bill in December. More recently, President Obama included $18 billion in cuts to crop insurance in his recently released 2017 budget proposal. Despite these hurdles, farm groups are lobbying lawmakers to ensure the program remains intact.
“With soybean prices down a third from what they were a year ago and farm income down, we need to be sure we’re protecting the safety net,” says Steven Censky, CEO of the American Soybean Association.
For a full list of crop insurance coverage and deadlines, visit the USDA Risk Management Agency website here.
Source: Anna-Lisa Laca, MILK