As harvest winds down in many regions, decisions about the 2023 season are already being made, including crop insurance planning.
IFT: Has this been a busy year for claims adjusters?
BURNS: It has been, but it’s sporadic. I talk to my insurance team all the time, and the variability in returns is really big. I’m talking a mile or two away. I’ve heard that growers can have some of their best yields and some growers don’t have very good yields. It’s very pocket-oriented. Some received these timely rains this summer, depending on when they were planted.
There will be complaints, there will be no questions. There are arid areas where some growers don’t have a good harvest, but there are also surprising yields.
IFT: We have faced higher crop prices in recent years, but there is a lot of volatility. Between variable returns and price volatility, does this affect how people approach crop insurance?
BURNS: Yes, it is. We are seeing some of the highest crop insurance guarantees we have seen due to rising commodity prices. Producers can get incredibly high crop insurance coverage – some can cover production costs, some can be at profit levels, but we lock in those guarantees.
IFT: enrollment in the ARC and PLC hedging programs has recently begun and continues through
BURNS: We always tell producers not to wait until the last minute. They can make a number of changes until
Some growers will get involved early on, but my advice is to do a crop insurance checkup with your agent before making any decisions. Crop insurance is a continuous policy. If you do nothing, it just goes into the next year. But we had so many changes that they have to think about – if they had a claim, what are the prices, how is the price volatility – and all of those things can change from year to year.
IFT: We are seeing higher premiums and good payout prices in case people need it. Are there any changes we should expect in the future for crop insurance?
BURNS: It seems like there are always changes, but we’ll find out next month or December. Last year they had a split nitrogen program. I don’t know, but I think it’s going to be expanded. Typically, we’ll know in about 45 days.
We tell producers that we have harvest lunches that we just finished selling crop insurance with margin protection. If you’ve chosen not to consider margin protection, the additional coverage and enhanced coverage options aren’t new, but I think they’ll be very attractive in 2023.
IFT: We don’t know what the final insurance numbers will be, but what are the factors we need to keep in mind when making these decisions?
BURNS: Knowing your cost of production is going to be very important. This helps you choose where you want your level of insurance coverage to be. Most producers want to cover this cost. We’re a long way from finding out in February, so we don’t want to speculate on that, but it’s a determining factor.
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