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Apr 13, 2022
Wheat farmers have been counting down the days until they can harvest their crop and reap record high prices. With the war in Eastern Europe showing no signs of letting up, wheat markets have skyrocketed to unforeseen levels as key supplies from Ukraine and Russia will be less available to world buyers this year.
As such, Kansas City wheat futures are above $11 for the benchmark July contract, which is a record high for this time of year. Indeed, it is over twice as high as the average value of $5.30 a bushel that farmers have faced in April over the last 7 years heading into harvest.
While farmers certainly welcome high prices as harvest draws closer in the next few months, Mother Nature will have her own ability to determine the richness of this year’s bounty. Drought is plaguing much of the key corridors of winter wheat production in the Southwest Plains. A La Niña weather system has kept moisture at bay for much of the fall and winter, and as the crop breaks dormancy soil moisture reserves are severely lacking.
But for those farmers that are seeing normal or even above normal crop conditions, that doesn’t mean it is smooth sailing into the harvest finish line. The spring and summer growing season is also a time of elevated severe weather threats. And one of the most detrimental weather perils is hail, which can occur as a result of strong thunderstorm activity.
For wheat, it is most susceptible to hail damage once the crop has reached the head formation stage as damage to the grain kernels can be irreversible. Research by Farming Smarter shows that even a moderate amount of hail damage during the start of heading can result in crop losses that are about 50% of normal yields.
Unfortunately for farmers, this time of critical crop development coincides with the same point in the season when hail risks are increasing. For farmers that grow wheat in the Plains, it is highly likely that hail will fall in a county where they live. The map below illustrates the incidence of hail falling in a given county during the time of winter wheat heading up to harvest over the past 20 years. In many regions of the Plains, there is an 80% chance of hail falling in a given year.
This year, with so much on the line, even areas with lower incidence of hail risk may want to consider some hail insurance. There are many types of hail insurance and various deductibles which allow us to tailor coverage to fit your personal coverage needs at a cost that makes sense. Learn more by contacting one of our agents.
Run the numbers with an expert FBN Crop Insurance agent today to see if hail insurance makes sense for you. Call 877-204-4645 or click here to learn more.
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Apr 13, 2022