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26 Jan 2023

by FBN Insurance

Collecting and analyzing data is a key factor of success for modern farmers. Almost 86% of farmers said that they want to use data tools that will make their operations more profitable (1). And of course, who doesn’t want to be more profitable?  But another interesting use case for data analysis is for crop insurance benefits or payment reductions. 77% of farmers said this is an incentive for collecting and sharing data.  What is precision ag? Precision ag is a way to record the events you’re doing in your fields. These days, a lot of new machines will record  all of the activities you’re doing in your field and provide you with data to analyze. But there are still a number of machines where you need to input your data in order to record what’s going on in the field based on GPS data.  So how can you use the data that’s captured? The raw data won’t be much good unless you have a way to analyze it. That’s where some of our free tools will be able to help you make sense of all this useful data.  Benefits of precision ag  Convenience Don’t let the data that you’re already capturing go to waste. You can upload your data from multiple displays and is compatible with multiple FMS products into your FBN® account.  Save time and money With more accurate data, you’ll always insure exactly what you plant and increase your APH while lowering your premium. And you’ll have fewer records to take care of when adjusting a loss. So reporting a claim will take less time and allow you to get back to your operation.  How much money can I save? As your APH data gets more accurate, so do your claims. This means farmers are saving 4% on their crop insurance premiums by using their precision ag data. If you’re reporting fewer acres, this results in a higher reported yield. The higher adjusted APH could help you at claim time.  The higher guarantee as a result of an improved APH will be the first dollars that are paid in a loss situation. [WATCH: Data Driven Insurance: Using Data to Make Informed Decisions] How to use precision data Acreage and production reporting Use the data you are already collecting for required crop insurance reporting after planting and harvest.  Claims Using just three precision records, your adjuster can adjust a loss in a fraction of the time. APH Reviews Use your electronic precision records for supporting a review to save time, provide the most accurate data available, and improve record organization. Trust and privacy One of the biggest pain points farmers face is knowing which system to use for data analysis. There’s an overabundance of software on the market and it can be difficult to decide which tool offers the best reports.  But for many farmers, there’s also concerns about how their data will be collected and used.  Ag Data Transparent FBN is proud to be certified as Ag Data Transparent (ADT). We have always put Farmers First® and want to be open and transparent about the data we collect. Being certified ADT affirms our data and analytics services are private and secure.  [READ: Are You Confident in Your Crop Insurance Coverage?] Need a second opinion on your crop insurance? With a range of tools that provide a virtual snapshot of what risk looks like in your area and on your farm, our team utilizes more than 30 years of data and  FBN  insights to compare different scenarios and see how they would work for you. Click here  to learn more about our expert agents and data-backed approach to crop insurance. Resources (1) - Farmer Perspectives on Data 2021 Copyright © 2014 - 2023 Farmer's Business Network, Inc. All rights reserved. "Farmers Business Network", "FBN", “FBN Direct”, "Farmers First" and the Farmers First flag logo are registered service marks of Farmer's Business Network, Inc. We are an Equal Opportunity Provider. FBN Crop Insurance services are offered by FBN Insurance LLC (dba FBN Insurance Solutions Services LLC in Texas, and FBN Insurance Solutions LLC in California and Michigan) and are only available where FBN Insurance LLC is licensed. FBN membership is not required to purchase through FBN Insurance LLC, but certain features are only available to FBN members. FBN Crop Insurance is currently offered in the following states: AK, AL, AR, AZ, CA, CO, CT, DE, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MD, ME, MI, MN, MO, MS, MT, NC, ND, NE, NH, NJ, NM, NV, NY, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV, WY.


23 Jan 2023

by FBN Insurance

If you are looking for additional risk management options this year, consider these elections that can be made at your local USDA Farm Service Agency. Unlike supplemental coverage offered by the RMA these programs are free as long as you meet eligibility requirements. The election and enrollment period opened on Oct. 17, 2022 and runs through March 15, 2023 . Below we deep dive into two of these programs: Price Loss Coverage (PLC) Agriculture Risk Coverage (ARC) What Is Price Loss Coverage (PLC)? The Price Loss Coverage (PLC) option provides financial protection to enrolled qualifying producers from substantial drops in crop prices. Covered Commodities Wheat Oats Barley Corn Grain sorghum Rice Soybeans Sunflower seed Rapeseed Canola Safflower Flaxseed Mustard seed Crambe and sesame seed Seed cotton Dry peas Lentils Small and large chickpeas Peanuts How Does Price Loss Coverage Work? Each 2023 crop year commodity has a reference price used to compare against the 2023-2024 Marketing Year Average (MYA) Price . A PLC payment will be calculated when the MYA Price is lower than the PLC Reference Price for the commodity. Any payment amounts are multiplied by the FSA farm program yield for 85% of the FSA farm base acres. PLC Payment Example A FSA farm has 100 base acres of Corn with a farm program yield of 170. Corn uses a $3.70 Reference Price for 2023. The final Marketing Year Average (MYA) Price will need to be less than $3.70 to generate a PLC payment. With a MYA price of $3.55, there is a $0.15/bushel payment ($3.70 - $3.55 = $0.15).  This is then taken times the farm program yield of 170 (170 x $0.15 = $25.50). This is then multiplied by 85% of the farm base acres. ($25.50 x 100 x 85% = $2,167.50) Given the current Projected 2023-2024 MYA price for corn is $5.95 as of January 4, 2023, PLC is not currently projected to make a payment for corn. However, the 2023 Corn MYA pricing period runs from September 1, 2023 through August 31, 2024, so the official MYA price has yet to be determined. What Is Agriculture Risk Coverage (ARC)? The ARC program was authored as part of the 2018 Farm Bill as an alternative to the Price Loss Coverage program, and is designed to cover “shallow losses” to a farm based on either the county based or individual based coverages mentioned above.  When the 2018 Farm Bill was written, the ARC program would have been a one-time election through 2023, but as of the 2021 crop year, this has been updated to allow for an annual choice, allowing flexibility to move between the ARC programs and PLC.  This election will renew as is for the following crop year, unless a change in program is requested. The deadline for making program changes is March 15 for the current crop year. ARC features are similar between the county and individual coverages, but they do have a few distinct differences. Option #1: ARC-CO Can be elected on an FSN and commodity basis with PLC alternative ( can have one crop enrolled in ARC-CO and another in PLC ) Payments are based on physical location rather than admin county. Payment is not dependent on planting the commodity or yields from the farm. Example:  FSA has corn and soybean base acres for the farm. A producer who plants oats on all cropland acres would still be eligible to receive payment if there is one to be made. Payment is not dependent on planting the commodity or yields from the farm. Payment is issued on a percentage of each covered commodity’s base acres. Prevented planting is not considered in ARC-CO. Payment equals 85% of the sum of base acres of the covered commodity on the farm x crop revenue shortfall calculated above ( not to exceed 10% of benchmark county revenue ). To calculate the benchmark revenue, actual revenue, and payment, the following must be determined. Benchmark Yield 5 year Olympic average of the county’s most recent crop years. For 2023, crop years 2017-2021 will be considered The high and low of that span will be excluded Any actual yields lower than 80% of county T yield will be replaced by 80% of county T yield Benchmark Price 5 year Olympic average of the higher of MYA ( Marketing Year Average ) price or National Loan Rate. For 2023, crop years 2017-2021 will be considered The high and low of that span will be excluded Benchmark Revenue Benchmark Yield x Benchmark Price Guarantee Benchmark Revenue x 86% ( ARC coverage level ) Actual Revenue Actual average county yield for the crop year x the higher of MYA or National Loan Rate. Payment Rate Guarantee - Actual Revenue If Guarantee per acre is higher than Actual Revenue, the county and crop are eligible for payment. If Guarantee per acre is lower than Actual Revenue, the county and crop are NOT eligible for payment. Payment maxes out at 10% of Benchmark Revenue. Payment Calculation Base Acres x 85% x % Interest in commodity x Payment Rate = Producer Payment Option #2 ARC-IC: ARC-IC has to be elected for all commodities for the entire FSA farm. Production must be reported initially for the 5 year benchmark, in addition to the current year, and must be updated annually thereafter. Payment is based on the individual farm, rather than county yield. Total base acres of all covered commodities on the farm x farm revenue shortfall ( not to exceed 10% of the benchmark producer revenue ) Payment requires planting one or more of the covered commodities Exception is prevented planting, but only when 100% of the farm’s acres are prevented A separate payment rate is determined for each producer based off weighted averages from all farms in which the producer enrolls in ARC IC and has an interest in the state To calculate the benchmark revenue, actual revenue, and payment, the following must be determined ( Must be done individually for each farm in which there is a share ): Benchmark Yield 5 year Olympic average of the county’s most recent crop years. For 2023, crop years 2017-2021 will be considered. The high and low of that span will be excluded. Any actual yields lower than 80% of county T yield will be replaced by 80% of county T yield. Benchmark Price 5 year Olympic average of the higher of MYA price or National Loan Rate. For 2023, crop years 2017-2021 will be considered. The high and low price of that span will be excluded. Farm Benchmark Revenue Benchmark Yield x Benchmark Price Benchmark Revenue Weighted 5 year Olympic Average of all farms’ annual Farm Benchmark Revenues from above, across all covered commodities. Guarantee Benchmark Revenue x 86% ( ARC coverage level) Actual Revenue Actual Yield x higher of MYA price or National Loan Rate Weighted across all planted covered commodities on all ARC-IC enrolled farms Payment Rate Guarantee - Actual Revenue If Guarantee per acre is higher than Actual Revenue, the county and crop are eligible for payment. If Guarantee per acre is lower than Actual Revenue, the county and crop are NOT eligible for payment. Payment maxes out at 10% of Benchmark Revenue. Payment Calculation Payment Rate x Base Acres x 65% x % Interest in commodity = Producer Payment  [WATCH: Learn why data deserves a seat at the table when it’s time to invest in crop, farm and livestock insurance in the "Driven Insurance: Using Data to Make Informed Decisions" video.] Considerations The RMA crop insurance option Supplemental Coverage Option (SCO) can be purchased on acres that are enrolled in PLC, or not enrolled in ARC. So your election for ARC or PLC must consider the eligibility, cost and benefits of other options such as SCO as well as ARC-County or ARC-Individual. Your FBN® Crop Insurance Agent has the tools and knowledge to be able to assist you in understanding these options as they apply to your unique situation each year. Enrollment Deadline You must make your PLC / ARC enrollment decision no later than March 15, 2023 at your Farm Service Agency office. Any SCO decisions must be made no later than your crop and county sales closing date with your crop insurance agent. Which ARC Program Is the Best Fit for My Ag Operation? If your operation performs similarly with county averages, ARC-CO is likely a good fit for your operation. If your farm tracks significantly higher or lower than the county averages, ARC-IC may be a better option.  For example, if a farm sits in a high-risk area near a river and is susceptible to frequent flooding, ARC-IC may function better on that farm. There are many similar strategies that need to be taken into consideration on a farm by farm basis. There is no perfect one size fits all solution for government disaster assistance; that’s why we have the two different types of ARC coverage, as well as PLC. The nuances of this program can make it difficult to determine the best fit for your operation, and is a great topic to discuss with your crop insurance agent.  [READ: Are You Confident in Your Crop Insurance Coverage?] Interested in Learning More? If you'd like to discuss these options with an agent to make the right selection, or you're interested in learning more about FBN ’s crop insurance offerings, click here or complete the form at the bottom of this page. Our skilled team, most of whom are producers themselves, can provide a free second opinion on your crop insurance so you have the peace of mind knowing that your coverage is best for your farm. Copyright © 2014 - 2023 Farmer's Business Network, Inc. All rights Reserved. The sprout logo, “Farmers Business Network”, “FBN” are trademarks, registered trademarks or service marks of Farmer's Business Network, Inc. We are an Equal Opportunity Provider. FBN Crop Insurance services are offered by FBN Insurance LLC (dba FBN Insurance Solutions Services LLC in Texas, and FBN Insurance Solutions LLC in California and Michigan) and are only available where FBN Insurance LLC is licensed. FBN membership is not required to purchase through FBN Insurance LLC, but certain features are only available to FBN members. FBN Crop Insurance is currently offered in the following states: AL, AR, AZ, CA, CO, FL, GA, IA, ID, IL, IN, KS, KY, LA, ME, MI, MN, MO, MS, MT, NC, ND, NE, NM, NV, NY, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WA, WI, WV, WY.  


04 Jan 2023

by FBN Insurance

Understanding your operation’s financial details is key to ensuring success for your farm. Knowing your yields and the investments you made on inputs to achieve those yields will not only put you on the path for success, it will also help your farm’s marketing strategy. That’s why it’s important to conduct a breakeven analysis.  What Is Breakeven The breakeven point takes into account all of your production costs (land, inputs, living expenses) and helps you understand the minimum market price you’ll need to recoup in order to breakeven. This number can fluctuate based on growing conditions and weather which can impact expected yield.  Here’s an example of how a basic breakeven calculation could look: Click here to enlarge the image. How to Calculate Breakeven The first thing you need to do is answer some very simple but important questions: How many acres will you plant? What crops will you plant? What’s their average yield per acre? Answering these questions will help you take into account both your projected income and expected expenses. Knowing your average yield/production per acre will help you build a baseline. To do that, start by building a budget that accounts for expenses like fertilizer cost or seed cost on an annual basis. These are the kinds of expenses that are easy to think about. Too often, people overlook things that should be included in their breakeven analysis. Here’s just a list of things people forget: Payments and depreciations Return to management and labor costs Interest charges on loans Machinery costs Overhead costs Looking at all of these overarching expenses will help you break down your costs to a per acre level. Cost per Acre Figuring out your cost per acre will give you more insight into how your operation is performing. The first thing you’ll want to do is generate your average yield by looking at your crop insurance APH. This is the best number to use when looking at your base breakeven yield number. After looking at your base breakeven number, consider a best case scenario and a worst case scenario for your operation. That may mean thinking about having to rely on crop insurance and how your breakeven will look if you do. On the other hand, if you think of the best year you had in the last 10 years, what’s your breakeven if you hit that figure? Once you’re able to figure out your best/worst case scenario, you’ll be able to generate your average production. You’ll now know your revenue per acre by utilizing the number of acres that you have as well as your yield per acre. There’s always a wild card that comes into play. Price is that wild card. Be extremely conservative when forecasting price. To get the most accurate numbers, try to use the new crop price at your local elevator. Those numbers can go up and down. However, you don’t need that price to create a true breakeven. When you figure out your expenses, you’ll know what your price needs to be because your breakeven price will tell you what you need to sell for. When you compare that to the local price at the elevator, you’ll know if it’s profitable or not. Your breakeven number is just like everything else in your operation. It’s a tool to make decisions. It will help you make better marketing decisions. When to Sell Every operation is different. It will depend on when you need cash flow. Do you have payments that need to be made? Rent due? A tax liability? Whether you’re buying equipment, buying land, or taking on new acres will have an effect on your cash flow. All of these decisions have pros and cons on your overall operational breakeven. Utilizing the breakeven analysis allows you to know whether you're selling at a profit or when to market your crop. What to Plant Knowing what to plant each year isn’t always an easy decision to make. Asking yourself which commodity makes the most sense is difficult to predict. Trying to outguess the market doesn’t always end well so consistency is best in this type of scenario. Understanding your expenses and financials will help you make solid business decisions and be better equipped to market your crop based on true data. Ultimately, knowing your breakeven per crop will help you in making planting decisions on ground that you may be undecided on. As well, it will help you make better crop insurance coverage decisions. Overall Management Expenses Planning a farm budget and applying it to your breakeven analysis will help make decisions throughout the season. As an example, many farmers use different inputs (herbicides, fungicides, chemicals and fertilizers) to help generate more yield. How does that affect or counterbalance spending an extra $50/acre on inputs during the season? Will that affect your breakeven or yield? Will this help generate a higher yield? All of these questions come into play and having a budget planned out allows you to make important decisions for your operation. Need a Second Opinion on your Crop Insurance? Our team of insurance agents understands ag; as producers themselves, many of them are familiar with the unique challenges of running an ag operation. They'd be happy to review your options with you and discuss what's possible. Click here or complete the form below to connect with one of our insurance agents and learn more about our data-backed approach to crop insurance. Copyright © 2014 - 2023 Farmer's Business Network, Inc. All rights reserved. "Farmers Business Network", "FBN", “FBN Direct”, "Farmers First" and the Farmers First flag logo are registered service marks of Farmer's Business Network, Inc. We are an Equal Opportunity Provider. FBN Crop Insurance services are offered by FBN Insurance LLC (dba FBN Insurance Solutions Services LLC in Texas, and FBN Insurance Solutions LLC in California and Michigan) and are only available where FBN Insurance LLC is licensed. FBN membership is not required to purchase through FBN Insurance LLC, but certain features are only available to FBN members. FBN Crop Insurance is currently offered in the following states: AK, AL, AR, AZ, CA, CO, CT, DE, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MD, ME, MI, MN, MO, MS, MT, NC, ND, NE, NH, NJ, NM, NV, NY, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV, WY.


03 Jan 2023

by FBN Insurance

In the coming months, farmers across the U.S. will make their decision on crop insurance for the year before hitting the fields for spring planting season. How confident are you in your coverage? Do you feel like there is more you can be doing to reduce risk? In this article, we'll break down the three options for supplemental insurance policies to make sure you are set up for success in 2023. These three options are: Supplemental Coverage Option (SCO) Enhanced Coverage Option (ECO) Stacked Income Protection (STAX) When Revenue Protection Just Isn’t Enough We are all aware that input costs continue to rise and approved trend adjusted yields are not keeping up with expected yields. This has caused many producers who have historically purchased an upper level Revenue Protection (RP) policy to look at the 80% or 85% revenue guarantee and realize this may not be enough revenue to satisfy their risk management program. The Supplemental Coverage Option (SCO) and the Enhanced Coverage Option (ECO) provide an opportunity to increase both yield and revenue coverage to a level that provides better financial coverage. [Overwhelmed by options? Our team is here to help you choose the right crop insurance program to manage your unique situation. Call us at 877-576-4468 to speak to an agent about which solutions are right for your farm.] Supplemental Coverage Option (SCO) SCO is a county-level crop insurance option that provides additional coverage for a portion of a producer’s underlying crop insurance policy deductible. Producers must buy it as an endorsement to either the Yield Protection, Revenue Protection, or Revenue Protection with the Harvest Price Exclusion policies. It was originally offered in 2015 for select counties. Thanks to its success, the program has expanded throughout the country for many different crops. The federal government provides a 65% premium subsidy for SCO total premium. How Does SCO Work? SCO follows the coverage of your underlying policy. If you choose Revenue Protection, then SCO covers revenue loss. If you choose Yield Protection, then SCO covers yield loss. The amount of SCO coverage depends on the liability, coverage level, and approved yield for your underlying policy. However, SCO differs from the underlying policy in how a loss payment is triggered. The underlying policy pays a loss on an individual basis and an indemnity is triggered when you have an individual loss in yield or revenue. SCO pays a loss on an area basis, and an indemnity is triggered when there is a county level loss in yield or revenue. The following is an example of a corn grower’s policy: Grower APH: 200 County Expected Yield: 205 Underlying Policy: 75% RP County SCO Coverage: 86% Spring Price: $6.00 Harvest Price: $5.00 Producer Yield: 180 County Yield: 180 Expected Revenue: $1,200 Expected County Revenue: $1,230 The underlying policy covers 75% (or $900) of the expected crop value and leaves 25% (or $300) uncovered as a deductible. In this example, SCO would begin to pay when the County Average Revenue falls below 86% of its expected level ($1,057.80).  It would pay out fully when the county average revenue falls to the coverage level of the underlying policy ($845.62, 75% of expected county revenue). This example would provide $132.00 of coverage per acre based on 11% of the producer’s expected revenue (86%-75%).  The dollar amount of SCO coverage is based on the percent of crop value covered. In this example there are 11 percentage points of coverage (from 86% to 75%). 11% of the expected crop value is $132.00 (or 11% • $1,200.00). The SCO policy can cover up to $132.00 of the $300 deductible amount not covered by your underlying policy. Is SCO a Good Fit for You? This policy is a good fit for producers that trend with or better than the county. SCO payments are determined only by county average revenue or yield, and are not affected by whether you receive a payment from your underlying policy. It is possible to experience an individual loss but to not receive an SCO payment, or vice-versa. This policy may not be a good fit for producers that do not have yields that trend on average below the county. If you have a crop that yields less than the county, you may miss out on an indemnity even though you had a poor crop. The 65% subsidy makes this attractive to many producers because this allows them to increase their coverage to 86% at a much more affordable premium versus the higher cost upper level RP plans in certain areas of the country. Enhanced Coverage Option (ECO) ECO is a county-level crop insurance option that provides additional coverage for a portion of a producer’s underlying crop insurance policy deductible. Producers must buy it as an endorsement to either the Yield Protection, Revenue Protection, or Revenue Protection with the Harvest Price Exclusion policies. Originally offered in 2021 for select counties, the program has expanded throughout the country for many different crops. The federal government provides a 44% premium subsidy for ECO with a RP underlying policy and 51% premium subsidy with a YP underlying policy . How Does ECO Work? ECO follows the coverage of your underlying policy. If you choose Revenue Protection, then ECO covers revenue loss. If you choose Yield Protection, then ECO covers yield loss. Coverage levels can be purchased at a 90% or 95% level. This will provide 4% or 9% of the total expected crop revenue for coverage. The amount of ECO coverage depends on the approved yield for your underlying policy. However, ECO differs from the underlying policy in how a loss payment is triggered. The underlying policy pays a loss on an individual basis and an indemnity is triggered when you have an individual loss in yield or revenue. ECO pays a loss on an area basis, and an indemnity is triggered when there is a county level loss in yield or revenue. The following is an example of a corn grower’s policy: Grower APH: 200 County Expected Yield: 205 Underlying Policy: 75% RP County ECO Coverage: 95% Spring Price: $6.00 Harvest Price: $5.00 Producer Yield: 180 County Yield: 180 Expected Revenue: $1,200 Expected County Revenue: $1,230 The underlying policy covers 75% (or $900) of the expected crop value and leaves 25% (or $300) uncovered as a deductible. In this example, ECO would begin to pay when the County Average Revenue falls below 95% of its expected level ($1,168.50).  It would pay out fully when the county revenue falls to the 86% level ($1,057.80, 75% of expected county revenue).   This example would provide $108.00 of coverage per acre based on 9% of the producer’s expected revenue (95-86%).  The dollar amount of ECO coverage is based on the percent of crop value covered. In this example there are 9 percentage points of coverage (from 95% to 86%). 9% of the expected crop value is $108.00 (or 9 percent • $1,200.00). The ECO policy can cover up to $108.00 of the $300 deductible amount not covered by your underlying policy, but more importantly bring the trigger on any loss up to 95%. Is ECO a Good Fit for You? This policy is also a good fit for producers that trend with or better than the county. ECO payments are determined only by county average revenue or yield, and are not affected by whether you receive a payment from your underlying policy. It is possible to experience an individual loss but to not receive an ECO payment, or vice-versa. This policy may not be a good fit for producers whose yields trend well below the county or are poorly correlated with county yields. However, if you have yields that do not trend with the county, there may be other private products that allow you to purchase an additional level of coverage on your individual yields and not rely on county averages. Coverage Levels You do not have to purchase both SCO and ECO. If you purchase ECO, your underlying MPCI policy does not have to be at an 85% level. You can purchase a lower level coverage (i.e.: 75%).  This would provide a “donut hole” from 86% down to the 75% level where your underlying policy would begin coverage.  You would still have 84% coverage on your crop (75% RP and 9% ECO), it is just that a portion of the coverage would be based on a county yield instead of your individual protection.  If you historically track with the county this may be a good option to consider. Indemnity Payment Timing Since SCO and ECO are both based on county yields, the ability to calculate any losses will be delayed until all county yields are reported. In Iowa, the Production Reporting Date is April 29. Even though it’s typical to have production reported earlier than this, county yields can not be calculated until this date due to producers who may wait til the last minute to report production. This means that any indemnity through these endorsements would not be paid until June of the year following your crop (i.e.: June 2023 for the 2022 corn crop).  Keep this in mind to avoid a cash flow bind as the exact dollar amount would not be known until well after harvest. Other Considerations to Keep in Mind When purchasing SCO, you can also elect PLC (Price Loss Coverage) when signing up for the farm program, but not ARC (Area Revenue Coverage) since ARC also provides you with a band of county based coverage. If you elect SCO and ARC for the same crop on a farm, your SCO coverage for that crop on that farm will be canceled and you must report the crop on that farm as covered by ARC on your acreage report. If you do not report a farm covered by ARC, the acreage of that farm will be ineligible for an SCO payment, but you will still owe 60% of your SCO premium on that crop and farm to cover administrative expenses. However, your underlying policy will still be in effect. If ECO is the only endorsement being purchased, you are able to elect either PLC or ARC. SCO and ECO Coverage Options SCO and ECO are federally subsidized products that provide an increased level of coverage. The products are based on county yields, but allow a producer to have up to 95% of the expected county yield. The products are a good fit for producers who consistently produce yields in line with the county. It also provides a high trigger level to help ensure that a producer has a high level of revenue that is needed with the high price of inputs. The 2018 Farm Bill Disaster Assistance programs can be an extremely intimidating and complicated subject for a grower.  Below, we'll outline the high level basics of how Agriculture Risk Coverage ( ARC ) functions and provide some observations on the two underlying products; ARC-CO ( county based coverage ) and ARC-IC ( individual based coverage ).   Stacked Income Protection (STAX / PLC-ARC) Stacked Income Protection (STAX) was developed by RMA in response to the omission of a cotton program payment in the 2014/2018 Farm Bills. Upland Cotton producers were able to purchase risk management products heavily subsidized by the U.S. government to protect area yield and market losses in their market. Recently, the USDA changed their products to include a version of cotton protection through the seed cotton. These protections allowed cotton producers to participate in USDA programs like other crops. With that said, generic base was converted to either a mix of your recent annual plantings (crop mix) or 85% of your generic base could be re-assigned to cotton base. PLC has a set price for the period of the farm bill, and ARC uses an olympic average (5-year prices dropping the highest and lowest prices in that period). Payments are paid on the producer’s FSA yields for PLC and ARC-Individual , but paid on area average yields for ARC-County. With the recent rise in cotton markets, upland cotton producers need to evaluate their individual situation as it relates to risk management. 2022 is yielding higher cotton prices than in the recent past, and area (county) yields have increased due to growing conditions, technology, and farming practices. Whereas FSA PLC/ARC programs focus on base acres and historical prices, STAX considers planted acres, current market prices, and recent yield trends. Though STAX does have an associated premium (80% subsidized by USDA), this may be a better option than PLC/ARC programs for 2022. As with all Risk Management Solutions, this may not be applicable in your situation, but it is worth investigating in all scenarios. Looking for (Free) Guidance on Your Crop Insurance? At FBN, our team is here to help you choose the right crop insurance program to manage your farm's unique situation. We can even provide a free second opinion on your crop insurance so you have the peace of mind knowing that your coverage is best for your farm. If you'd like to discuss these options with an agent, or if you want to learn more about FBN®’s crop insurance offerings, connect with a member of the FBN Crop Insurance team . Watch Now: 5 Reasons to Break Up with Your Crop Insurance Agent Resources USDA ARC/PLC Fact Sheet Farmdoc ARC/PLC Calculator Copyright © 2014 - 2022 Farmer's Business Network, Inc. All rights Reserved. The sprout logo, “Farmers Business Network”, “FBN” are trademarks, registered trademarks or service marks of Farmer's Business Network, Inc. We are an Equal Opportunity Provider. FBN Insurance services are offered by FBN Insurance LLC (dba FBN Insurance Solutions Services LLC in Texas, and FBN Insurance Solutions LLC in California and Michigan). FBN Crop Insurance is currently offered in all U.S. states.


13 Dec 2022

by FBN Insurance

It’s the time of year to spend some quality time with your family, shake mummies and make insurance decisions. The almond crop insurance deadline is coming up on December 31, 2022 . Here are a few important reminders to keep in mind when making decisions.  Actual Production History (APH) APH policies insure producers against yield losses due to natural causes such as drought, excessive moisture, hail, wind, frost, insects, and disease.  The farmer selects the amount of average yield they wish to insure, ranging between 50-85%. The farmer also selects the percent of the predicted price he or she wants to insure, between 55-100% of the crop price.  This year’s almond crop price is set at $2.00/lbs (Organic Almond price is $3.00/lbs) If final production is less than the yield guarantee, an indemnity is paid on the difference. The indemnity is calculated by multiplying this difference by the price selected at sign up and the insured share in the crop.  4th and 5th Leaf Coverage Almonds are not insurable until they hit 6th leaf under the standard APH program. However, 5th leaf almonds are insurable via written agreement. And 4th leaf almonds are eligible for an Almond Freeze program through some AIP’s which protects against freeze during the bloom period. With new varieties coming into full production sooner, be sure you have your crop protected. Whole Farm Revenue Protection (WFRP) If you’re growing multiple crops, WFRP provides a risk management safety net for all commodities on the farm under one insurance policy. This insurance plan is tailored for any farm with up to $17 million in insured revenue, including farms with specialty or organic commodities. This policy covers revenue rather than traditional yield based policies (APH) and could be a good alternative (or used in conjunction) to your current risk management program.   Additional questions to consider Here are some additional questions to ask your agent this renewal season to ensure you are maximizing your coverage: Does OU or BU unit structure make the most sense for my operation? Why? Has there been a change in ownership of our company? Any owners with greater than 15% must be reported on the application. Are there any new crop shares? Have any existing agreements changed? Take control of your risk and gain greater peace of mind Your FBN® Insurance agent can tailor a specialty crop insurance policy to meet the specific needs of your operation. Learn more about this program or connect with an agent by filling out the form below or calling (877)-576-4468 . Copyright © 2014 - 2022 Farmer's Business Network, Inc. All rights Reserved. The sprout logo, “Farmers Business Network”, “FBN”, are trademarks, registered trademarks or service marks of Farmer's Business Network, Inc. We are an Equal Opportunity Provider. FBN Insurance services are offered by FBN Insurance LLC (dba FBN Insurance Solutions Services LLC in Texas, and FBN Insurance Solutions LLC in California and Michigan). FBN Crop Insurance is currently offered in all U.S. states.


Article Crop Insurance

What Is MPCI Harvest Price Discovery?

07 Oct 2022

by FBN Insurance

With harvest time beginning or just around the corner, many producers in the Midwest are trying to determine if their crop production is adequate to not have a crop insurance loss. For many producers, “Harvest Price Discovery” will play a role in that determination. Harvest Price Discovery is a period of time (usually 30 days) that the crop insurance policy utilizes to determine a final commodity price. It will also determine a final revenue guarantee in the case of Revenue Protection (RP) or to calculate a “trigger” yield if the final Harvest Price is lower than the Initial Price Discovery.  For corn and soybeans in the Midwest, Harvest Price Discovery is the average of the closing futures price during the month of October (December corn contract for corn and November soybean contract for soybeans). Other insurable crops may have different Harvest Price Discovery periods based on Policy Actuarials. The type of MPCI policy that you have will make a difference in how the Harvest Price will be utilized on your policy. Yield protection (YP) With YP, Harvest Price does not play a factor in your insurance policy. This product is insuring a guaranteed number of bushels per acre. If the final yield is below this guarantee, the producer will be paid a flat dollar amount for each bushel shortage. For example, the Initial Price Discovery on Corn is $5.90/bu, the amount paid is $5.90/bu regardless of where the price is at Harvest. With this policy, your bushel guarantee remains the same and you are paid an amount determined at the beginning of the insurance period. Regardless of what the Harvest Price is during the Harvest Price Discovery. Revenue protection with Harvest Price Exclusion (RPHPE) This policy utilizes the Harvest Price to determine if the initial Revenue Guarantee is sufficient to not generate a loss.   If the Initial Guarantee was $1,000 per acre based on an Initial Price Discovery of $5.90/bu, the $1,000 Guarantee is then divided by the Harvest Price to see if the yield was adequate to not generate a loss.  $1,000/$5.90/bu Initial Price = 169 bushel initial guarantee  $1,000/$5.00/bu Harvest Price = 200 bushel needed to avoid a loss. $1,000/$6.50/bu Harvest Price = 153 bushel needed to avoid a loss. As you can see in these examples, the final Harvest Price determines your guaranteed bushels. This increases your “Trigger Yield” in a decreasing price environment, but lowers your “Trigger Yield” in an increasing price environment. This policy does not allow you to recalculate your insurance guarantee with a higher Harvest Price, but calculates your “Trigger Yield” based on your beginning guarantee divided by the Harvest Price. Revenue Protection (RP) RP is probably the most popular crop insurance policy. This policy utilizes the Harvest Price in a couple of different ways. If the Harvest Price is lower than the Initial Price, the Initial Guarantee is divided by the Harvest Price to determine a “Trigger Yield. If the Harvest Price is higher, the Initial Guarantee is recalculated using the higher Harvest price.  An Initial Guarantee was $1,000 per acre based on an Initial Price Discovery of $5.90/bu and bushel guarantee of 169/bu/ac. If the Harvest Price is higher than the Initial Price, a new guarantee is calculated before calculating a “Trigger Yield” that is used to determine if a loss is present.  $1,000 guarantee at $5.90/bu Initial Price = 169 bushel initial guarantee  $1,000 guarantee at $5.00/bu Harvest Price = 200 bushel needed to avoid a loss. $1,098 guarantee at $6.50/bu Harvest Price = 169 bushel final guarantee. This policy provides you coverage regardless of the change from the Initial Price to the Harvest Price. In a decreasing price environment, additional bushels are needed in order to meet the Initial Revenue Guarantee. In a rising price environment, the guaranteed bushels per acre do not change and if there is a shortage of bushels, you will be paid the higher Harvest Price if you are below your guaranteed bushels. Harvest Price Discovery for Corn and Soybeans begins October 1st and will be complete on October 31st. Based on which MPCI policy you have in place, it determines how the Harvest Price will be used to determine the number of bushels needed to avoid a loss (trigger yield). If you have any questions regarding how your policy works, please feel free to contact an FBN® Insurance Agent to discuss in further detail.    Copyright © 2014 - 2022 Farmer's Business Network, Inc. All rights Reserved. The sprout logo, “Farmers Business Network”, “FBN”, are trademarks, registered trademarks or service marks of Farmer's Business Network, Inc. We are an Equal Opportunity Provider. FBN Insurance services are offered by FBN Insurance LLC (dba FBN Insurance Solutions Services LLC in Texas, and FBN Insurance Solutions LLC in California and Michigan). FBN Crop Insurance is currently offered in all U.S. states.


29 Sept 2022

by FBN Insurance

Harvest is well underway on most specialty crops out west which may mean it’s time to dig out your crop insurance paperwork. 2022 has been a challenging year between ongoing water scarcity issues and untimely freezes for many of our orchard crops. These challenges have led to a much larger number of crop insurance claims being opened with carriers than the past few years. Here are a few key reminders while trying to navigate your potential claim: 1. Open the Claim If there is ANY chance your production will fall below the insurance guarantee, be sure to inform your agent. Claims must be opened with the AIP prior to beginning harvest so an adjuster can inspect any damage.  2. Work with the Adjuster After the claim has been opened, work with the adjuster. It is their responsibility to inspect your crop prior to harvest. During their inspection they will verify that there has been weather related damage to the crop and estimate the extent of the damage. Reach out to your agent if you’ve opened a claim but have not heard from the insurance company. They will be able to help you get in touch with the adjuster assigned to your claim.  3. Provide Production As soon as production records are available, provide them to your agent and adjuster working your claim. The sooner these records are handed off, the sooner your claim can be finalized and any potential indemnity paid out. This is especially important this year due to the number of specialty crop claims opened across the western region. It will also allow your agent to get a head start reviewing your APH and developing a coverage plan for 2023.  4. High Dollar Claims A high dollar claim review is conducted when a crop claim exceeds $200,000 per crop, per county. This is a standard review to double check all of the production that you have turned into your agent. An adjuster will look at the most recent year of production history. If there are no errors, they will stop there. If there are any discrepancies, they will ask for two more years of history. If your claim has the potential to exceed the $200,000 threshold be prepared to gather up those settlement sheets from 2019-2021 to expedite the process. The main point to keep in mind when dealing with a potential crop insurance claim is that communication is key. Timely communication with your agent and adjuster will keep the process moving forward, avoid any unwanted surprises and ultimately settle your claim faster.  Take control of your risk and gain greater peace of mind Your FBN® Insurance agent can tailor a specialty crop insurance policy to meet the specific needs of your operation. Learn more about this program or connect with an agent by visiting the FBN Crop Insurance page or calling (877)-576-4468 . Copyright © 2014 - 2022 Farmer's Business Network, Inc. All rights Reserved. The sprout logo, “Farmers Business Network”, “FBN” are trademarks, registered trademarks or service marks of Farmer's Business Network, Inc. We are an Equal Opportunity Provider. FBN Insurance services are offered by FBN Insurance LLC (dba FBN Insurance Solutions Services LLC in Texas, and FBN Insurance Solutions LLC in California and Michigan). FBN Crop Insurance is currently offered in all U.S. states.


27 Sept 2022

by FBN Insurance

What Is Multi Peril Crop Insurance?  The USDA Risk Management Agency (RMA) offers Multi Peril Crop Insurance (MPCI) coverage for numerous crops throughout the United States. Available for more than 100 different crops (though not all crops are covered in every region), MPCI protects farmers against crop losses caused by natural events. Crop Insurance Deadlines Important insurance dates vary by crop and region of the United States. The important deadlines are: Sales Closing Date (SCD) Acreage Reporting Date (ARD) Premium Billing Date For crops planted in the fall (e.g. winter wheat, winter barley, oats, rye, triticale), the SCD is generally September 30 with an ARD of December 15.  For crops planted in the spring (e.g. corn, soybeans, cotton, grain sorghum, rice, spring wheat, spring barley), the SCD is generally March 15 with an ARD of July 15. Specialty crops (i.e. fruits, nuts, vegetables) have different SCDs and ARDs throughout the year based on the state or county in which they are grown. For the majority of these crops, the premium billing date is August 15. Other Insurance Deadlines There are other commodities or insurance programs (e.g. Pasture, Rangeland and Forage, Apiculture, Annual Forage, Margin Protection) that have a single SCD for the entire United States. The Whole Farm Revenue Protection insurance program has three different Sales Closing Dates depending on your tax filing year, which fall between November and March. Trusted MPCI Protection from FBN® If you haven't gotten a second opinion on your crop insurance in the last few years, now is the time to see how a personalized approach to insurance could make a difference in your operation.  To learn more, and to ensure you meet the appropriate deadlines for the crop you are growing for your specific state and county, contact an FBN insurance agent by clicking here or calling (877)-576-4468 today. Copyright © 2014 - 2022 Farmer's Business Network, Inc. All rights Reserved. The sprout logo, “Farmers Business Network”, “FBN” are trademarks, registered trademarks or service marks of Farmer's Business Network, Inc. We are an Equal Opportunity Provider. FBN Insurance services are offered by FBN Insurance LLC (dba FBN Insurance Solutions Services LLC in Texas, and FBN Insurance Solutions LLC in California and Michigan). FBN Crop Insurance is currently offered in all U.S. states.


Article Crop Insurance

When Are Livestock Insurance Deadlines?

27 Sept 2022

by FBN Insurance

The USDA Risk Management Agency (RMA) offers three federally subsidized insurance programs specific to livestock producers . These programs include:  Livestock Risk Protection (LRP) Livestock Gross Margin (LGM) Dairy Revenue Protection (DRP) Additionally, the Rainfall Index insurance program includes Apiculture, Pasture, Rangeland and Forage (PRF) , and Annual Forage .  These federal crop insurance programs run on a “reinsurance calendar” year starting July 1 and ending June 30 of the following year. For example, reinsurance year 2023 began July 1, 2022 and will end June 30, 2023.  Livestock Insurance Deadlines For the LRP, LGM, and DRP insurance programs, the transfer or cancellation deadline is June 30 prior to the start of the new reinsurance year. If a producer wants to change their agent, switch to a different insurance company or cancel their policy for the upcoming year, the transfer/cancellation application needs to be completed and signed by the June 30 deadline.  If the producer is new to LRP, LGM or DRP, an application can be completed and signed anytime during the reinsurance year. Once an application is submitted and approved, the producer can then purchase coverage using a coverage endorsement throughout the year.  After coverage is purchased, premium is billed at the end of the coverage period.  For LRP, the premium billing date is the first of the month following the month in which the coverage ended. For example, if the coverage period ends October 14, the billing date is November 1. For LGM, the premium billing date is the first day of the month following the last month of the coverage period in which the insured has target marketings or in which the coverage period ended. For example, if the coverage period is February-December, and the insured only has target marketings in March-May, the billing date is June 1. For DRP, the premium billing date is the 25th of the month following the month in which the coverage ended. For example, if the coverage period is October-December, the billing date is January 25. Lack of Rainfall Insurance Programs PRF and Apiculture Insurance Deadlines Pasture, Rangeland and Forage (PRF) and Apiculture insurance are classified under Rainfall Index insurance coverage. PRF, which was developed to support ranchers and hay producers by giving them the opportunity to insure their forage grown for grazing and haying , is available in the 48 contiguous United States. Apiculture insurance, which covers bee colonies, uses a range of indexing systems to assess plant growth, which indicates varying levels of honey production. December 1 is a key date for both PRF and Apiculture programs. This represents the sales closing date (for coverage between the following January through December), acreage reporting date and, if the insured wishes to transfer or cancel their coverage for the upcoming year, the date by which a transfer/cancellation application must be signed.  The PRF and Apiculture premium billing date is September 1 of the following year after the sales closing date. For example, a December 1, 2022 sales closing would have a premium billing date of September 1, 2023. Annual Forage Insurance Deadlines Annual Forage insurance , which covers against lack of precipitation on acreage planted annually for use in grazing or as hay for livestock, also falls under Rainfall Index insurance coverage.  The sales closing date for Annual Forage is July 15. This is also the date by which a producer must submit a transfer/cancellation application. Under Annual Forage, there are four acreage reporting dates that align with the four different growing seasons:  October 15 January 15 April 15 July 15  The Annual Forage premium billing date is August 30 of the following year after the sales closing date. For example, a July 15, 2022 sales closing would have a premium billing date of August 30, 2023. Trusted Protection from FBN®  Whether you raise cattle, dairy, apiculture, or swine, Farmers Business Network® has the expertise to serve producers of all sizes. With our Farmers First®approach always top of mind,our agents are here to build a loyal relationship with you, ensuring stability and trust in times of market loss, mortality loss or unexpected peril. FBN is more than just insurance. Our agents work with you to understand your biggest concerns and offer solutions that provide you peace of mind. To speak with an agent and learn more about our available coverage options, please click here or call (877)-576-4468 .  Copyright © 2014 - 2022 Farmer's Business Network, Inc. All rights Reserved. The sprout logo, “Farmers Business Network”, “FBN” are trademarks, registered trademarks or service marks of Farmer's Business Network, Inc. We are an Equal Opportunity Provider. FBN Insurance services are offered by FBN Insurance LLC (dba FBN Insurance Solutions Services LLC in Texas, and FBN Insurance Solutions LLC in California and Michigan). FBN Crop Insurance is currently offered in all U.S. states.


27 Sept 2022

by FBN Insurance

Whether it’s almonds in California, apples in Washington, or cherries in Michigan, there is Federal Crop Insurance Policy to help manage your risk. In fact, the USDA’s Risk Management Agency (RMA) protects 76 different specialty crops that account for over $20 billion in liabilities.  Below we’ll cover three of the most common specialty crop insurance plans . Actual Production History (APH) APH policies insure producers against yield losses due to natural causes such as drought, excessive moisture, hail, wind, frost, insects, and disease. This is a basic plan of insurance that covers most specialty crop commodities including almonds, apples, blueberries, grapes, peaches, pistachios, and walnuts. The farmer selects the amount of average yield they wish to insure, ranging between 50-85%. The farmer also selects the percent of the predicted price he or she wants to insure, between 55-100% of the crop price established annually by RMA.  If final production is less than the yield guarantee, an indemnity is paid on the difference. The indemnity is calculated by multiplying this difference by the price selected at sign up and the insured share in the crop.  Sales closing dates vary by crop and region, with most falling between November 20 and January 31 .  Actual Revenue History (ARH) ARH policies are very similar to the APH policies outlined above. However, they base the guarantee on revenue per acre rather than yield. This gives producers the added benefit of some market volatility protection due to the revenue component. Crops that are eligible for ARH policies include cherries, oranges and strawberries. While sales closing dates for ARH also vary by crop and region, they primarily happen between November 20 and January 31 .  Whole Farm Revenue Protection (WFRP) WFRP provides a risk management safety net for all commodities on the farm under one insurance policy. This insurance plan is tailored for any farm with up to $17 million in insured revenue (up from $8.5 million in insured revenue in years past), including farms with specialty or organic commodities (both crops and livestock), or those marketing to local, regional, farm-identity preserved, specialty, or direct markets. Sales closing dates for WFRP vary by region, with all regions falling between January 31 and March 15 .  WFRP can serve as an excellent tool in a specialty crop producer’s risk management toolbelt. A few benefits of the WFRP program include:  Ability to cover ALL crops grown on an operation Provides Revenue Protection on specialty crops that historically have only had yield protection options available Subsidy levels as high as 80% depending on commodity count and coverage level  Ability to account for expanding operations  Take Control of Your Risk with Specialty Crop Insurance from FBN® FBN has experts in specialty crop insurance located nationwide, each of whom are ready to discuss the specific needs of your individual operation. Learn more about these programs or connect with an agent by clicking here or calling (877)-576-4468 .  Copyright © 2014 - 2022 Farmer's Business Network, Inc. All rights Reserved. The sprout logo, “Farmers Business Network”, “FBN” are trademarks, registered trademarks or service marks of Farmer's Business Network, Inc. We are an Equal Opportunity Provider.FBN Insurance services are offered by FBN Insurance LLC (dba FBN Insurance Solutions Services LLC in Texas, and FBN Insurance Solutions LLC in California and Michigan). FBN Crop Insurance is currently offered in all U.S. states.