Profitability

Profitability


27 June 2022

by FBN Network

Providing critical intelligence based on the collective actions of our farmer members is a key mission of Farmers Business Network®. That’s why we’re excited to share our annual June Acreage Report as a deliverable to help you make critical crop marketing decisions ahead of USDA’s Acreage Report on June 30th.  Despite some weather-related planting delays in the Northern Plains, we found that increased acreage in Minnesota, Wisconsin and Ohio likely helped push the corn acreage number above the USDA's March reading of 90.4 million acres, up from USDA’s March estimate of 89.5.  Soybean acres are pegged at 89.0 million acres, off from USDA’s March forecast of 91.0 million, also pegged to weather in the Dakotas.  Download the 2022 U.S. Acreage Report “The USDA report usually drives volatility that's three to four times greater than a typical trading day," said Kevin McNew, Chief Economist at FBN®.  "With the weather challenges across the country and an uncertain economic climate, our Acreage Report aims to provide our farmer members with the most comprehensive data and intelligence ahead of this report so they can make the best decisions for their operations," said McNew.  Grain markets continue to be on edge as we reach the midpoint of the US growing season. In March, USDA’s Prospective Plantings report suggested farmers intended to plant less corn and more soybeans than in 2021, with forecasted US corn acres at 89.5 million acres and soybeans at 91.0 million acres. They will release their latest acreage estimates on July 1 based on their farmer survey conducted in early June.  Farmer summary We asked members what their actual planted acres were across 9 key crops. Here are some of the key findings from the survey. Corn  Corn acres are expected to climb to 90.4 million acres, up from USDA’s March estimate of 89.5. While corn acres were down by 500,000 in North Dakota and South Dakota versus the March estimate due to poor planting weather, other states were either mostly unchanged to higher. Key states increasing corn acres versus March were Minnesota (up 400,000), Indiana (up 200,000), Ohio (up 200,000), and Wisconsin (up 200,000). Soybeans Soybean acres are pegged at 89.0 million acres, off from USDA’s March forecast of 91.0 million. Again, weather caused North and South Dakota farmers to plant less soybeans by 500,000 acres versus March’s forecast, but other states also pulled back on soy plantings as some switched more into corn, cotton and spring wheat. What it means for the farmer Many farmers have faced challenges this spring as unusually cold and wet weather handicapped planting progress in the Upper Midwest and Northern Plains. Meanwhile, in the Southwest Plains, persistent drought took its toll on winter wheat yield potential, and likely influenced some spring planting decisions as farmers sized up the risks of the drought extending into the summer. Get the free report If you'd like to read the full report, get your free copy today. Members can access this report and more in the  Reports section  of the   app.


24 June 2022

by Kevin McNew

After a steady climb over the past six months from $5.50 to $7.50 a bushel for the bellwether December 2022 futures contract, the past three weeks have seen relative choppy trade keeping prices hovering around the low $7 mark.  USDA’s acreage report at the end of June along with US growing season weather will be key drivers for deciding if futures can reach new highs heading into harvest. Likewise, basis levels for fall delivery will be adjusting as we get closer to harvest and estimates of new supplies start to dial in. Download the 2022 U.S. Acreage Report Current cash forward contracts which quote new-crop basis for delivery this fall have been generally trending higher in the Western Cornbelt but flat to a bit lower in the Eastern Cornbelt. Last year had big corn crops, especially in Ohio and Indiana, which has kept spot basis levels in those states below normal for much of the past six months. Meanwhile in the West, dryness in the Plains and lack of grain supplies has underpinned spot basis for much of the year.  Is this a good time to be locking in the new-crop basis for delivery at harvest? Or would you be better off waiting for new-crop basis to improve? To answer that, we examined 2006-2021 basis bids at harvest for key states and developed our Basis Model to help guide marketing decisions. This model is tuned into a number of factors like US and local production, stocks, ethanol, and exports and gives a basis forecast based on the expected supply and demand situation for this fall.  The results of the forecasts are presented in the chart below for 15 key states. In addition, we illustrate the current year new-crop basis averaged across buyers to compare whether current basis offerings are above or below expected basis levels at harvest. Of the 15 states, only 2 states (KY and MO) show current new-crop basis quotes that are at or below the forecast value for the state. Most states have forecast basis that not only is higher than current quoted basis for that state, but that also is above the long-run average basis at harvest. The key drivers of this are declining US carryout expected for 2022 as well as fairly sizable changes in local production due to acreage changes between 2021 and what is expected in 2022. If USDA were to find even lower acreage in the June survey, and/or if yield potential erodes over the season, then this could add more basis upside this fall. Falling production combined with near-record exports and ethanol production expected in 2022 likely keeps local basis supported heading into harvest, and yet another market where farmers are better off waiting to price on.  New-crop corn basis forecasts Click here to enlarge the image. What it means for the farmer A tightening US and global corn market is unlikely to get corrected in the next six months. Most end users are not eager to bid up basis for this fall, but as the growing season progresses we expect the corn crop size to continue to be downgraded, which likely opens doors for better basis opportunities closer to harvest than what exists today.


23 June 2022

by Mark Wilson

Last week, the Federal Reserve hiked its interest rate by 0.75% in an effort to combat inflation. And while markets are expecting a similar rate hike in the not too distant future, this is a first step to decelerate inflation which is at its highest in the last 40 years.  According to Kevin McNew, Chief Economist at FBN®, the Fed will need to do more interest rate hikes in the next 6-12 months. Join Dan English, General Manager of FBN® Finance and Kevin McNew as they discuss why the Federal Reserve decided to hike interest rates, what that means for farmers and how can help alleviate some of the uncertainties of a fast changing economy.  What you’ll learn Click on the chapter links within the video to jump to each section: Why the Fed increased interest rates (00:10) What farmers should focus on (04:39) Why to consider Farmland Capital (05:24) What’s happening in the energy market (08:05) What it means for farmers (11:48) Watch now Solutions to grow your business Farmland Capital Farmland Capital provides you the capital you need without impacting your original loan. Learn more here or start your application today . Operating lines Inflation is impacting everyone. Operating lines will help you fund your operation as you see fit. Apply today and get your approval decision instantly. Land loans Rising interest rates might not impact your decision to purchase the perfect land. We want to help you finance your dream, apply for a land loan now . Crop insurance Inflation is impactful and everything counts. Protect your crop commodity and learn more about our personalized crop insurance solutions . Read the full transcript (00:00): I'm Dan English. I'm the general manager of FBN® Finance. And I'm here today with Chief Economist Dr. Kevin McNew. Hi Kevin. (00:08): Hey Dan, how are you doing? (00:10): Good. Well I think as a lot of people have seen now last week, the Federal Reserve hiked interest rates quite a bit.  And I think even a little bit more than what had been expected, maybe two or three weeks before that. Maybe could you just walk me through what the news was that prompted the Federal Reserve to raise rates and what that means? (00:32): I think the Fed is realizing that they got a late start to this inflation issue. You know, a lot of us in the economic world have been saying for the last year that inflation is a problem and they're just now kind of getting their act together.  And they did need to raise interest rates a quarter of a point more than what was maybe expected, but absolutely it's needed.  We have inflation that is well over 8%, 8.6%, according to the last reading, which is  at or above the highest rates we've seen in over 40 years. So the Fed has a lot of work to do. I don't think this is the end of the inflation or the interest rate hike story.  Markets are already kind of expecting another similar magnitude rate hike in the next meeting next month and probably another half a point gain before the end of the year. So yeah, we've got some interest rate movement company to curb this runaway inflation, (01:33): Do you think that the Fed is going to be acting like this is aggressive enough? Or do you think that they'll have to continually revise upward what they're doing to be able to combat inflation? (01:46): Normally, the Fed is really trying to watch inflation, unemployment, the economy, and really in the last 30, 40 years, we haven't worried too much about inflation. And so having to watch inflation is a new issue. The Fed's going to  have to deal with it.  And, and like I said, they got a late start to it, obviously because of the issues around COVID. And I think they're going to  be laser focused on what inflation is doing as a result of raising interest rates. They don't wanna put the economy in a recession, but their number one priority right now is tamping down this inflation that is just really problematic for the economy going forward.  So I think it's all going to  be about inflation readings as we get new data coming out. We're going to  see some pull back and economic activity and surging prices. I personally don't think we're, we're going to  be seeing something really quickly. That's going to  change the Fed's outlook, which is they're going to need to do more rather than less in the next six to 12 months. (02:54): Do you expect that raising rates, dialing back their bond buying program, all, all the efforts that they're doing to have more restrictive monetary policy that's longer or your interest and higher, you know, baseline expectations for years to come? (03:18): That's a tough one, Dan. I mean, because some of this is definitely, you know, policy related. I was a huge proponent of you the Fed being more aggressive about interest rate hikes shortly you know, six months to a year after COVID because we did inject such fiscal stimulus into the economy and that's now having, you know, profound impacts.  But beyond that, we have what's going on in Eastern Europe, issues with energy prices and all these external exogenous forces that are really out of the Fed's hands. And so, they're trying to do this through a series of interest rate hikes and, and quantitative tightening to kind of throttle back the system, but, there's more action in the global market than the Fed can realistically control.  From your standpoint, as you kind of see and, and see what's going on in the agricultural lending space, I'd be curious if we're in this interest rate environment for the next two to three years, where should we be telling our farmers to focus on?  Should we be focusing on long term debt consolidation? You know, all those kinds of things about investment decisions become so important in this environment. (04:39): It depends a lot on the farmer's personal situation, their balance sheet. But one thing that we encouraged a lot of people to do and worked with a lot of farmers to do over the last year to two years, was to refinance at these lower rates before the most recent rate hikes.  For folks who have done that, they have a very different problem going forward, which is they have an amortizing loan that they're paying off every year where they have a very low rate. And how do they replace that? How do they cover the additional incremental costs as they, you know, either refinance that to take some cash out down the road or come in with higher and more expensive sources of debt. (05:24): One thing we're encouraging a lot of people to look at is we have a Farmland Capital program where we can take a second position and they can keep the first position in place.  At the low rate, we think that's going to  be a great option for a lot of farmers. But more generally, I would say the risk of this going even higher still seems pretty significant to us.  And just the pace at which the rates have increased over the last six months has really been astounding. I think where folks can lock in rates for the next 10, 20, 30 years, and have some certainty that they're going to  be able to remain profitable. We're encouraging folks to do that.  If rates come back down they can always prepay and refinance at a lower rate, but where they can lock in longer term, we think that's definitely the right thing now. (06:13): As I think back long term, I've been farming all my life and in the ‘80s as a farm kid, I remember the interconnectedness of coming of the ‘70s, roaring with bull markets.  The ‘80s brought hyperinflation and land values going through the roof. And then in the early ‘80s was a big farm depression. I know there's many gray-haired farmers out there that have the kind of experience that have seen these kinds of ebbs and flows.  What I've been telling them as it relates to farmland is I don't think we have a huge downturn in farmland values, and we don't see a huge recession or depression even in commodity prices, because it's a much different story today than it was in the ‘80s where we had oversupply issues. This is not that situation. We don't have an oversupply issue.  We have an over demand issue and commodity prices may back down a little bit but I think farmland values don't tank and bottom out or, or turn south quite sharply. If there's ways to capture more farmland as they fall down, or in your case you mentioned the Farmland Capital situation, that's a really intriguing concept. (07:31): I think for farmers who are looking who may be concerned about that, that's a way for them to take a little bit of risk off the table while still being able to have upside control and ownership of their farm.  One thing that we're paying very close attention to on the financing side is will farmers be able to support their farm at these, you know, lower prices? Maybe you can just talk a little bit about what the forward curve of green prices are doing. And it sounds like you think some of these prices are here to stay for at least a little while. (08:05): They're definitely catching up as we get more permanency around the demand side of the story. A lot depends on energy markets and I don't think the energy situation is going to improve dramatically.  Obviously, a lot depends on the situation in Eastern Europe. Overall we're in a much different energy paradigm.We're trying to make this global transition from fossil fuel based energy to clean energy. And that's not a simple, easy solution. It's going to involve a lot of volatility. And I think this is just the start of what will be at least another decade of volatility in the energy markets, which in my opinion means more benefits for agriculture as we are linked in the biofuel space.  For 15 years we've been linked with ethanol but now there's such a big push around renewable diesel and that translates into demand for soybeans, for example. So I don't see a ton of downside risk, as I said, it's not to say we won't have ups and downs. But the forward curves are starting to look better and catch up. I do think the days of $3 corn and $8 beans are probably pretty far behind us until something dramatically shifts either in the energy sector or other other places. But there's just so much pin up demand if you will. (09:33): That's great news for our farmers. And one thing that I know a lot of people see as one of the drivers of energy is the war in Ukraine and the resulting markets. It sounds like even if that were resolved tomorrow, we're talking about more fundamental issues than the short term issues.. (10:00): Economists will call it a knife edge solution as we try to transition from fossil fuels to clean energy. A knife edge is really razor thin. And so a nice, smooth transition is very hard to achieve because there's so much imbalance.  Just to give you some perspective, since COVID, we have seen a downgrade in refining capacity in the U.S. and that's not out of coincidence. That's because the big oil companies are recognizing either internally or from pressure from outside investors that they have to shift to clean energy.  We're still a society that's heavily dependent on fossil fuels, but the supply of those fossil fuels, whether from crude oil, from refined products, is dwindling because of this pivot. And so, again, it's not an easy solution. I do think you're right. If we did get Russia and Ukraine to resolve for some reason, there'd be a pullback. But I don't think we're done with the days of a hundred dollars crude and $4 or $5 gasoline and diesel you know, for any time period. (11:22): Well, that's good news for our farmers.  Last question I have for you. Is there anything that you know, could fundamentally alter the inflation picture in the U.S., aside from what the Fed is proposing to do, or is this going to  be something that's kind of hard fought, there's going to be rate increases and it's the situation we're in? (11:48): This is going to have a pullback in investment and all of the investment things that are driven, whether it's real estate, especially home values. But for our farms, I think we're so tied to food, which has an exceptionally highly elastic demand.  That means it doesn't respond much to prices. People have to eat is the main take home message. I think from our farm sector standpoint you know, what would change the paradigm substantially is if energy markets collapsed.  It's hard to see a scenario where that happens. If we go back to the last big energy market downturn of 2007 or 2008, we went from $140 barrel oil quickly down to $40 and $50 barrel oil.  That was really because we saw China on this meteoric rise as a global economy and we needed a throttle price where we could pull back demand.  Until we start to see real signs of demand and pull back, it's hard to see where inflation starts to get tamed. Not saying it won't happen but the numbers I watch and the things I see, we're just not seeing the demand pull back and in the commodity space, I think that's really true.


The USDA recently announced an updated livestock disaster aid addressing increased supplemental feed cost in 2021. The ELRP payment will be based on data from the 2021 Livestock Forage Disaster Program (LFP).  CCC-853 (Livestock Forage Disaster Program Application) AD-2047 (Customer Data Worksheet) CCC-902 (Farm Operating Plan for an Individual or Legal Entity) CCC-901 (Member Information for Legal Entities, if applicable) FSA-510 (Request for an Exception to the $125,000 Payment Limitation for Certain Programs, if applicable) CCC-860 (Socially Disadvantaged, Limited Resource, Beginning and Veteran Farmer or Rancher Certification, if applicable) AD-1026 (Highly Erodible Land Conservation (“HELC”) and Wetland Conservation (“WC”) Certification) Phases of the ELRP payments Phase 1 of the payments is expected to total $577 million, basing the payments on percentage of an eligible producers’ gross 2021 LFP payment — 90% for historically underserved producers and 75% for all other producers. And, the payments will be subject to a payment limit. Phase 2: USDA said it was evaluating impacts of 2021 and wildfires on livestock producers as it develops the Phase 2 component.  Phase 1 ELRP eligibility Producer and livestock eligibility for ELRP aligns with the eligibility requirements. Only 2021 LFP participants are eligible for an ELRP payment under Phase 1. Livestock producers must have suffered grazing losses in a county rated by the U.S. Drought Monitor as a D2 (severe drought) for eight consecutive weeks or a D3 (extreme drought) or D4 (exceptional drought) during the normal grazing season of the 2021 calendar year. Livestock producers who were not allowed to graze their permitted federally managed lands due to wildfire are also eligible for ELRP payments.  ELRP payment calculation and limitations When calculating an eligible producer’s Phase One ELRP payment, Farm Service Agency (FSA) will use the producer reported (CCC-853 form) livestock inventories and forage acreage or restricted animal units and grazing days for the 2021 calendar year. Payments will be equal to the eligible livestock producer’s gross 2021 LFP payment multiplied by a payment percentage. For historically underserved producers (i.e., socially disadvantaged, limited resource, beginning, and veteran), the payment percentage is 90%, with a payment percentage of 75% for all other producers. Eligible producers with a CCC-860 on file with FSA for the 2021 program year qualify for the 90% payment percentage. Under ELRP, Adjusted Gross Income (“AGI”) limitations will not apply, however there are payment limitations for eligible producers. The payment limitations will be determined by the producer’s or legal entity’s average adjusted gross farm income, which is income earned from their agricultural operation. If an eligible producer or entity, other than joint ventures or general partnerships, has an average adjusted gross farm income of less than 75% of their average AGI for tax years 2017 through 2019, they cannot receive an ELRP payment of more than $125,000. For an eligible producer or entity, other than joint ventures or general partnership, with an average AGI of at least 75% that is derived from agricultural activities, they may be eligible for an ELRP payment of up to $250,000.  Eligible participants seeking the increased limitation must: File form FSA-510; Provide certification that their average adjusted gross farm income is at least 75% of their AGI; and Provide certification from a licensed Certified Public Accountant or attorney that the participant qualifies to receive the increased limitation. Additional USDA Assistance Opportunities The announcement also included information on a new crop-related disaster effort named . USDA announced a two-phase approach for diversified, row crop and specialty crop operations affected by an eligible disaster event in calendar years 2020 or 2021. USDA also indicated there will be additional relief through the . The ELAP program provides emergency assistance to eligible producers of , and for losses due to disease (including cattle tick fever), adverse weather, or other conditions, such as blizzards and wildfires, not covered by LFP.  The additional ELAP funding will assist producers with the increased cost of hauling livestock to forage. The ELAP compensation is retroactive to 2021 and will also be available for losses in 2022 and subsequent years. The deadline to request all ELAP assistance for 2022 calendar year losses will be Jan. 31, 2023. Important Deadlines The deadline to file for FSA’s LFP program is 30 calendar days after the end of the calendar year the loss occurred (i.e. January 31, 2022 for loss in calendar year 2021).  The deadline to file for FSA’s ELAP program is January 30 following the end of the calendar year in which the loss occurred. Producers must file a notice of loss within 15 days after the loss is apparent for honeybee operations and within 30 days for livestock and farm-raised fish operations. More more information on , please contact your local FSA office. To learn more about the Federal Crop/Livestock Insurance programs contact an insurance agent by visiting the or calling 877-204-4645 .  Source:


In response to the severe drought conditions in many parts of the United States, the USDA RMA is suspending the Livestock Risk Protection (LRP) 60-day ownership requirement. The lack of rainfall is causing producers to sell cattle earlier than they normally would due to the difficulty in finding adequate forage. The USDA Risk Management Agency (RMA) has released a stating, for Specific Coverage Endorsements (SCEs) they are suspending the Livestock Risk Protection (LRP) rule requiring livestock owners to own their livestock up to the last 60 days of the endorsement (coverage) period. This is in effect as of . What it means for producers With producers facing a shortage of available forage due to drought conditions, the suspension of the LRP 60-day ownership rule allows producers options to consider. These options include feeding additional hay/supplement to maintain the cows and growth of the calves or selling calves before the expected sale date. Selling the calves “early” will also allow producers to reduce grazing pressure on the remaining forage and to maintain their existing cow herd genetic base.   The SCEs are still subject to verification of proof of ownership. Proof of ownership can include sales receipts, kill sheets, or other documentation that verifies ownership during the insurance period showing the date the livestock were sold or slaughtered.  If you have questions, please reach out to your agent or contact at 877-204-4645 .


07 June 2022

by FBN Insurance

If you are a livestock producer concerned about drought this year, learn more about Annual Forage policies from Insurance Sales Director, Don Moody and Agent, Roger Givens. This 30 minute webinar walks you through the details the Annual Forage program and who qualifies. Available In: Colorado Nebraska New Mexico North Dakota Oklahoma South Dakota Texas What you'll learn What is annual forage? Why choose annual forage? Availability & eligibility Sales closing Dual use option Q&A Watch now Learn more To speak to an agent about drought protection, please call 877-204-4645 or learn more by visiting our annual forage page .


31 May 2022

by Diana DeHart

Introducing Diana DeHart - Market Advisor Regional Representative covering the Lower Midwest & Central Plains I've been working as a Farm Market Advisor with  since 2018  and I've been employed in the grain industry since 1994. I grew up on a grain and livestock farm in NW Missouri, and still farm and raise cattle in the area with my family. I started my career in the grain industry with a Co-op in western Indiana as a grain merchandiser.  For 3 years I worked for ADM as a merchandiser, commodity broker and grain facility manager in west central Indiana. In 2005, I moved back to Missouri and worked for a regional co-op in west central Missouri as the grain coordinator. In 2016, I moved back to northwest Missouri to my family farm and worked for a newly constructed shuttle loading facility nearby. In May of 2018 I joined and I have enjoyed the opportunity to work with producers and help them manage their grain marketing risk. May brief The western part of this region has been extremely dry while the north and eastern areas have been fighting rain. Planting in the Lower Midwest areas has been delayed, but mid-May weather gave many producers several short windows that allowed them to get corn in the ground. The Deep South has seen a fair amount of prevent plant claims for corn.  The Wheat Council wrapped up their Kansas tour with an estimated yield of 39.7 bushels per acre versus the average from last year at 47.4 bushels. Production is seen at 261 million bushels, implying USDA’s harvested area total is viewed as too optimistic by the tour. We believe protein shouldn't be an issue for the HRW crop this year.  Old crop basis is holding firm for soybeans and corn in most areas. New crop soybean basis remains steady to slightly weaker. If you'd like to talk about your farm business and how it's being impacted by market dynamics, you can call/text me at . Or .


31 May 2022

by Nicole Tonak

Introducing Nicole Tonak - Market Advisor Regional Representative covering the Dakotas and Upper Midwest Region I started with in 2019 as an outside Farm Market Advisor working for local producers helping to manage their grain marketing risk. Prior to I honed my risk management skills by working for a brokerage company and  with Cargill as both a Contract Service Rep. and Farm Market Advisor.  I grew up in, and still reside in East/Central South Dakota. I enjoy working with producers, and learning about their farm business to  further understand and assist in marketing strategies for their operations. May Brief Cooler, wet weather through May has caused significant planting delays throughout the Upper Midwest, especially in the Dakotas. May 22nd US corn planting report was 72%, second slowest for the date in more than 25 years. North Dakota however came in at only 20%. As the Crop Insurance Deadline of May 25th for corn has passed, producers are contemplating the production risks of late planting, changing their acres, or filing for prevent plant. Spring Wheat acres, also in limbo as we close out May, are causing additional strain. If you have any questions as to what decision is best for your Farm Business, contact your crop insurance agent or market advisor. One last Storm system will move through the end of May, before June brings the area warm/dry weather. This will allow a few good planting days ahead of the June 10th Soybean deadline for crop insurance. Old/New crop Basis levels remain steady and currently better than average. If you'd like to talk about your farm business and how it's being impacted by market dynamics, you can call/text at 605.221.8296 . Or .


26 May 2022

by Mark Wilson

With hail season upon us, it’s time to think about your current coverage. Watch Kevin McNew, Chief Economist at FBN® and Director of Crop Insurance, Eric Sorenson talk current market conditions and how this can affect farmer's decisions when it comes to crop insurance for the rest of 2022. What you’ll learn  How weather and the war in Eastern Europe have affected wheat markets The threat of hail and how to protect against that risk The effects of La Niña Watch now Want to learn more about crop-hail insurance? to get your questions answered and learn how a crop-hail insurance policy can protect your profit potential this season. Transcript Kevin, good to talk to you again. Let's catch up a little bit. There's been a lot that's happened since the last time we spoke. I know the markets have really been on a tear for a long time now. It just seems like there's no end in sight here. We've had a few blips up and down lately, but  it's still holding in there pretty strong. Do you mind just giving us a little bit of a summary of where we're at now in the markets for some of the major quality crops? Winter wheat's getting close to getting cut, you know, as we enter harvest pretty soon and wheat prices are screaming. Prices obviously respond to the outbreak of war in Eastern Europe that shows no end in sight. And the issues that we highlighted two months ago are still firmly in place. So we definitely look for wheat values to stay at record highs, if not continue to push higher. And, you know, there's hints of problems in the Southwest Plains around the crop. But you know, it's spring, it's gonna be summer, it's stormy weather season and, you know, there's hail happening out there. I see hail alerts pretty much every day and you know, Eric you're in crop insurance and you know, I'm a wheat grower, that's got $11 wheat sitting out there looking nice and plump with big heads. What do I need to think about here? You basically hit, hit the nail on the head there. You really need to be thinking about hail coverage. I think what we're gonna see this year and what we're already seeing in some areas are those producers that have some wheat out there, especially if it's in good condition. It doesn't have to be in great condition, but if it's in good condition where there's some meat on the bone, there's something worth protecting. We're seeing some hail sales, certainly there's places where people actually have some very good wheat where they've got the right precipitation, the right weather for it. Obviously with these kinds of prices, pretty unforeseen in some respects, a little bit of hail goes a long way as far as hail coverage goes. I always try to look at as a risk consultant, what can go wrong? And is there anything I can do to protect against that risk? And right now, you know, the closer and closer we get to harvesting wheat I just think about hail and the risk out there right now. I know a while back, it's probably been several weeks ago now, Kevin, but you were talking about the effects of La Niña and how that's kind of lingering on. You said that in some areas of the U.S., it's gonna call for some kind of extremes in the weather. I think we've seen that in a broad part of the U.S.. Look at that drought monitor and it's kind of the, the haves and the have nots for moisture, right? The Western doesn't have it, the Eastern wishes the spigot would shut off so they can get some crops planted. We need to look at some hail coverage. The other thing that I think could take people by surprise is that, you know, hail coverage in a lot of areas where wheat's grown isn't that expensive for what you get for coverage. You might be like a 1, 2, 3% type rate, definitely worth looking into. The other thing I'd say is to make sure that you look at what your multi-parallel coverage is and make sure you’re properly covering the value of that crop. Eric, you mentioned that, you know, the haves and have nots this weather season. I think what that's setting up is this kind of battleground at the, in between places, which is kind of, you know, Oklahoma, Texas, Arkansas, where we're seeing hail outbreaks that are pretty sizable because of that confluence of dry and wet and cold air that's all coming to head kind of at that epicenter there. And so we are seeing regular outbreaks of hail and you're right, La Niña is fading. But that just means more of this back and forth weather pattern. It can't decide if it's a little bipolar right now. It can't decide whether it wants to stay on the lawn or drift out of the sun a little more neutral. And so it's gonna be a lot of back and forth, I think, over the next couple months, which is important for winter wheat guys, you got $11 wheat sitting out there. That hail damage if it hits can be so detrimental when you have prices as high as they are right now. That's right. I've seen so many times when farmers might be out there putting up storage for a big crop that's on the way, or maybe even buying some new harvesting equipment, not only to have those plans change or their perspective change when a big hailstorm comes along. So it's definitely important to think about the other thing I'll say is, you know, a lot of our customers, a lot of farmers we've talked to have kind of punted this year on the hail conversation. And I think the reason they have is because they knew that the markets were on a tear at the time we were making crop insurance decisions on the multi payroll and, and that multi was not cheap this year. Probably a good value because of the guarantees out there, but still expensive. I know we talked to a lot of farmers that were having a hard time making decisions on, on hail. Andwe said, you know, you have the luxury of waiting until there's a risk. And so we certainly don't want to go out there with, you know, a crop that’s peeking up above the ground for the growing point and introducing risk in it without having hail coverage. Butyou know, a lot of people are still struggling with planting, but I think some areas are starting to dry up a little bit and we're seeing some more acres getting planted, particularly corn and beans. I think when they do, they need to make sure they don't forget about that hail because a lot of those conversations it's been weeks now since they've had with their agent. Farmers are looking at their budgets going man fertilizers through the roof and where do I save money? But maybe this year, it's not the year on, on insurance. Well, that's right. And that money has already been spent, right? All those input costs. And so to your point, Kevin, you know, the way we look at it is we're not trying to add to the cost, but we are trying to cover the cost. And I think that's really important because there's just a lot more to gain this year and there's a lot more to lose. Yeah, absolutely. So good times. And, and a lot of uncertainty ahead, but you know, I think, I think this is a great time to be in agriculture and you know, hopefully farmers will have a good growing season and insurance is probably a big component of what they need to have in their arsenal. You bet. That's all very important this year. There's a lot riding on things, no doubt. So appreciate it, Kevin. Thanks for the update. Thanks Eric.


Across the country, farmers have experienced weather events this year that have made planting a bit of a gamble. With everything from late snowfalls to repeated soaking rains, it’s been difficult for many of you to get your crop in the ground during your ideal planting window. These events and delays make it even more important that you understand the basics of replants, delayed planting and prevented planting in the crop insurance coverage you’ve purchased. Know what options are available to you through crop insurance When you’re looking at a less than ideal planting season, it’s important to understand what’s available to help you recover losses. Here’s a quick rundown: Replant Replant coverage applies when there is existing damage to the planted crop, and you plan to replant the same crop on the same acreage. This coverage allows for reimbursement of the costs of that replant. To qualify: File a notice of loss within 72 hours of the cause of loss Contact your agent before replanting, replant after approval from loss adjuster Acreage must be (at minimum) the lesser of 20 acres or 20% of the crop unit acres Acreage must not have been planted prior to the Initial Plant Date Delayed planting Sometimes called “late planting,” this coverage feature applies when you plant an insurable crop after the crop’s Final Planting Date (FPD). In this window, insurance coverage drops 1% per day for acres planted through the duration of the Late Planting Period (LPP). To qualify: Plant during the LPP (typically 25 days or less after the FPD, but be sure to check with your agent.) Prevented planting Prevented planting applies when you are unable to get the seed in the ground with the proper equipment by the FPD, or within the LPP. This is due to an insured cause of loss (usually a weather event/ events) that is general to the surrounding area, and prevents other farmers in your same area from planting acreage with similar characteristics. This coverage allows for a payment of a percentage of expected revenue. To qualify: File a notice of loss within 72 hours after the FPD, or as late as 72 hours after the LPP Acres must by physically available for planting Acreage must be at a minimum 20 acres or 20% of the insured crop acres by unit Acreage planted in at least 1 of the last 4 most recent crop years File intended acres for each crop by Sales Closing Date for acreage in a new county Webinar on Replant, Delayed Plant, and Prevent Plant 101: What You Need To Know If you have to use one of these options above, here are some best practices to ensure that you get the most out of your coverage 1. Communicate with Your agent If you are concerned that you may need to take advantage of one of these options, make sure to stay in touch with your agent regarding your plan of action. Taking steps, such as replanting, without letting your agent know could lead to confusion, or potentially, you assuming you have certain coverage that you do not actually have 2. Know your dates To understand how your coverage can work for you, make sure you have these dates in mind. Initial Plant Date (IPD): This is the earliest point that a crop can be planted and retain its replant coverage. Final Plant Date (FPD): This is the final date a crop can be planted and still retain it’s full insurance coverage. Late Planting Period (LPP): This is a period of time beyond the FPD during which a crop can be planted and still retain some percentage of its coverage. 3. Attempt to plant Farmers are expected to attempt to plant fields that can be reasonably planted through the Final Planting Date for your crop and county. This is especially important in regards to prevented planting coverage. 4. Keep detailed records To ensure that you are properly covered when you need it, make sure you keep detailed records. Precision records are best, but the most important thing to have are all of the little details, such as date, time, input receipts, FSA 578 certification, maps, etc. Take control of your risk and gain greater peace of mind Your   Crop Insurance agent can tailor a policy to meet the specific needs of your operation with a variety of coverages and endorsements. Run the numbers with an expert crop insurance agent today. Call  877-204-4645  or click to  learn more .