Blog » Wanted: A soon, and extended, return of blue skies...
Wanted: A soon, and extended, return of blue skies...
We’ve been in Phoenix enjoying sunshine, blue skies, and our grandson’s 3rd birthday today – I do wish that all reading this were making progress on spring’s work with wheels turning versus watching the calendar turn. As my luck and poor planning would have it, I didn't realize the Final Four was to be held here...
Here's hoping to the soon and extended return of blue skies...
Livestock Incentive Program (LIP) - A reminder of the looming deadline for producers who suffered qualifying livestock losses due to natural disasters including winter storms. You could be eligible for the Livestock Indemnity Program (LIP) through your local FSA office. Deadline to file a notice of loss is w/in 60 days of the qualifying event. Contact your local FSA office.
Perdue’s Nomination Hearing - Politico provided an overview of the Senate Agriculture Committee’s nomination hearing for Governor Sonny Perdue yesterday, titled “Perdue had a long wait for a short confirmation hearing – and nailed it.” Both Republican and Democratic members of the committee stated their support for crop insurance and asked for Perdue’s thoughts on this risk management tool. He called crop insurance “vital” to producers and offered his perspective that crop insurance is well-run, well-managed, well-designed, and well-administered program that gives farmers a great deal of confidence. He expressed his interest in ensuring that crop insurance is a sound, solid, and good economic value for farmers and taxpayers. Perdue has been approved by the Senate Ag Committee, consideration by full Senate is next.
Prevent Plant - Given the anxiety many have expressed, it is prudent for me to share with you what the crop insurance policy provides regarding prevent planting coverage. Policy language states: "...a prevented planting payment may be made to you for eligible acreage if: you are prevented from planting the insured crop on insurable acreage by an insured cause of loss that occurs..." Generally, you are not required to plant beyond the stated final planting dates in your county actuarial, specific to the crop in question; however, much consideration is given to what ‘other area growers’ are doing as well. For instance, are you the only grower in your immediate area that is choosing not to plant due to the current conditions? Are all the necessary inputs (equipment, fertilizer, seed) readily available and at your disposal?
Prevented planting claims can be complicated and many variables come into play during the loss determination. Thanks to the upper Midwest, companies have much experience over the years dealing with this type of loss. The burden of proof remains with the policyholder – you must substantiate that your claim was due to an insurable cause of loss. It is not the job or responsibility of the crop adjuster to prove your position, they’re merely information gatherers. Document, document, document. Photos and weather data are a great means to help support your position in the event of a prevented planting claim. Crop provisions provide a payment of prevent plant acres at 60% of the insured crop unit(s) guarantee.
Some of the terminology that could come into play during a prevent plant claim:
- 20/20 rule - Standard policy language of the minimum number of acres to qualify for a payment, 20 acres or 20% of the unit, whichever is less.
- Eligible base acres - Is there a history of growing the crop that was prevented from planting? Adjusters look at the last 4 years of planting history.
- Qualifying eligible base acres for the crop, or roll to the next closest or lower liability crop for payment - It's all about your planting history and finding a 'similar crop' if liability needs to be 'borrowed' from another crop if you exhaust eligible base acres.
- Planted prevent plant - At the discretion of the AIP (crop company) referring to crop planted after the late plant period and the insured at a 60% reduction in coverage, full premium. Probably not applicable to small grains, perhaps more for pulses.
Reporting acres at FSA - This can be a huge bugaboo if not done properly. If you have failed fall wheat acres that are subsequently replanted to spring wheat, please make sure to report and that FSA codes to identify that the acres were failed fall acres. If identified as initially planted spring, it will affect the determination of prevented planting eligibility. Again, failed fall wheat acres reseeded to spring wheat acres are different than initially planted spring acres. This is especially true if there are spring wheat acres prevented from being planting.
Final Plant Dates for Select Idaho & Oregon Counties:
|ID & OR||Barley||Canola||Dry Peas||Spring Wheat|
5/25 All Other
Final Plant Dates for Select Washington Counties:
|WA||Barley||Canola||Dry Peas||Spring Wheat|
4/30 Map Area 2
5/5 Map Area 2
5/15 Map Area 2
|Franklin||4/15||n/a||5/25 Irr Only||4/15|
5/31 Map Area 2
5/5 Map Area 2
5/15 Map Area 2
|Grant||4/30||n/a||5/25 Irr Only||4/15
5/15 Map Area 2
5/10 Map Area 2
5/15 Map Area 3
5/15 Map Area 2
4/30 Map Area 3
5/15 Map Area 2
Late plant period - This is the additional days beyond the final plant date that coverage is afforded under the policy. For each day past the final plant date, 1% of the unit guarantee is forfeited, to a maximum of 25 days. There is no reduction in premium for acres planted beyond the final plant date. Unless otherwise noted, the policy provides up to 25 days of coverage beyond the final plant date posted in the county actuarial. Coverage is not provided beyond the late plant period, which is the final plant date plus the late plant period.
Notice of loss - If you you are prevented from planting an insured crop that has prevent plant coverage, you must notify the company within 72 hours of: 1) the final planting date, if you do not intend to plant during the late plant period; 2) or you determine you will not be able to plant during the late plant period. Failure to provide the timely notice as outlined will negatively impact a potential prevent plant claim.
Markets - The latest reports suggest Kansas wheat is 20% jointed and Oklahoma wheat near 50% jointed, both are near normal averages. Meanwhile crop/soil conditions have again declined this past week, most areas showing at least 20% lower ratings when compared with last year. Rainfall is falling across the region, which will certainly stop the continued deterioration of the crop. This doesn't mean all wheat acres are going to harvest; some will be grazed and planted to spring crops, like soybeans or milo. Read more...
Trouble in Kentucky - An oilseed processor still owes growers money on crops delivered last fall. Culprit - a prior crop that soured in storage, good yields and aggressive marketing for growth in the area. Read more...
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Until next time...
Opportunities are usually disguised as hard work, so most people don't recognize them...~Ann Landers
McGregor Risk Management Services, LLC
Cell – 509.540.2632
Office – 509.843.2599
Fax – 509.843.2583
Posted in Risk Management; Posted March 31, 2017 by Curtis Evanenko
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