USDA Crop insurance questions

[Common Tator]

Does anyone else carry crop insurance? It is the ONLY crop insurance available for apples, which is what we grow.

This program is managed through the USDA Farm Service Agency.

This year, on May 23rd, our orchard was in full bloom, when we were hit by a freak snow storm. We lost our crop. They have a formula to figure out what your production is supposed to be, based on the acreage you have planted. Several years ago, I was called to the FSA office where we used a satellite image of our ranch to determine the acreage that we have planted in apples. After the orchard was carefully outlined on the satellite image, their computer determined that we have 7.60 acres planted in apples (they excluded everything they possibly could from the acreage, including roads through the orchard, which only serve to provide access to the apple trees) I also know that several trees weren't counted because of the angle of the satellite image and the fact that some of the apple trees weren't visible behind massive pine, fir, cedar and oak trees in the forest that surrounds the orchard.

Someone up the USDA chain of command, decided that because our orchard consists of standard size trees rather than dwarf or semi dwarf trees, we will have our acreage recalculated to be only 5.10 acres of trees. This seems to be arbitrary and punitive. We have never understood their thinking, and we have a very hard time signing a production report certifying this to be "true and correct", when in fact we know that it is not true or correct.

Then, we were supposed to tell them what our production was for previous years. I provided them with numbers based on actual sales, and they provided me with a form that APPARENTLY reduces the numbers claimed, and reduces our previous production. I say apparently, because I can't find a USDA approved definition of "yield" and 'production". The yield number is significantly smaller than the production number.

Can anyone tell me what the USDA means by Yield, and production?

In 2009 we sold 713 bushels of apples, and declared that to them, and they show that as production. Yet they credit us with 140.00 for our yield. 140 what? Bushels? They will be determining a dollar figure for our insured losses based on these numbers.

The FSA rep I deal with is not working today, and isn't available to answer my questions, but they want me to sign the forms and have them sent off by tomorrow at the latest. It seems that they are artificially trying to limit what we will receive on the crop insurance by manipulating our acreage and our yield downward.

[T-Bone 369]

Not an expert by any means with FSA but your 140 bu is per acre (their 5.10 x 140 bu is essentually your 713 number). They calculate by the acre instead of by the farm - granted with a small spread like yours any loss will probably be farm wide. As to the total acres I beleive that is a factor of the density of the plantings. SD and Dwarf trees are planted on much denser plots than Standard so assume there is an adjustment in their formula. In the end it does not matter - they would just divide your crop number into whatever acreage they determine to get a per acre amount. In the end the total coverage number will be the same reguardless of whether they use the 5.10 or the 7.6 number.

[Common Tator]

Bushels per acre! That makes sense!

Thanks T-Bone!

[Michael W. Smith]

Not a big fan of crop insurance. From what I saw of my Dad's farm growing field corn for his cows - I think almost every year he ended up getting money from insurance.

One year he planted the corn too close together. It didn't produce, but yet they gave him a big check at harvest time because of the loss.

Another year the deer and raccoons did alot of the harvesting for Dad. He got another big check at harvest time.

Another year was dry - and another big check came at harvest time.

The cost of insurance was next to nothing. And it didn't seem to matter if the crop suffered because of the farmer's stupidity or due to nature or weather.

I think the majority of the big farmer's and mega farms sign up the same way. And the government just hands them more and more money.

It may be different in your neck of the woods, but around here it's almost akin to welfare.

[Common Tator]

Thanks Michael. I was waiting for the first "crop insurance = welfare" post. the USDA offers the only crop insurance available for apples. An orchard is a commitment. You plant the trees and must wait years and years for a commercial crop. Then you can't grow other crops there while you have the orchard.

We didn't cause the snow storm that ruined the crop for us. That storm cost us an entire year of productivity. This wasn't due to our own stupidity. We paid the insurance premium.

Just what would you have us do?

[rambler]

I'm supposed to be a big corn/soy farmer here, and supposed to like all govt programs I guess based on the past - just so you know where my advise is coming from.

I am corn/beans, I know they cover 'other' crops but could have different rules on those.

These days they have many different insurance types for the main grains, revenue assurance and others, that start to insure a dollar amount per acre, rather than a bushel yield amount per acre. Those calculations get very deep..... And the premiums are quite expensive, you need to cash them in now & then, they are not meant to never be used, they are a tool where many years you pay in $30-50 an acre, and sme years you pull out $120 an acre - you better at those prices or it is a real rip off...

A simpler insurance perhaps like you have was required for one or 2 years to be in the farm program back in the 80s. It was subsidised from the govt as all crop insurance is now - they do that instead of giving out diaster payments.

Cost me $8.40 an acre, insurance dude told me how much better coverage I would have at this 80% coverage than if I went for the basic $6.50 70% coverage, costs so little more & covers so much better.

So you'd figure if your yield was less than 80% of normal you'd get a claim right? Qas how it was explained to me.

Had a terrible wet year, crops were drowned out putrid yellow green, stunted, terrible yields. My oats was loking something like 40% to me, figured well that $8.50 an acre is going to pay off!

Went to talk to the agent, he really didn't say much & pulled a paper out from behind him, it had a bunch of formulas on it. He said I probably don't qualift for anything.

I took it home & studied it, well if you had a loss at the 80% level, you qualified for 90% of the 80%, not the actual 80%.

Then if you weren't in the insurance for 3 years or more, you had to deduct 30% to start with. And a few other deductions & adjustments.

Anyhow, I did the math at home, and as I added and multiplied the percentages together, it turned out if my crop was 100% destroyed, they would own me a grand total of $23.00 per acre. For my premium of $8.50 plus whatever the govt subsidy was to the insurance co.

So minus my $8.50 cost, the most I could gain per acre was $14.50. And that was only if I couldn't harvest a single bu per acre on the whole field. Some great insurance eh? Would really help me our wouldn't it?

Some good deal that was for us farmers.

Opted out of any of that junk as soon as I could, and want to spit on any crop insurance sellers that show up since..... Sure whish I could find the deal M Smith ran into, but no such cash cow ever showed up around these parts! Think we had to pay for his windfall.


--->Paul

[Allen W]

Common Tator

Haven't used the USDA crop insurance for specialized crops but have government subsidized crop insurance through a regular crop insurance company, subsidized is all you can buy.

I assume that your insurance will work like my insurance does. You have a 5 year average yield made up of your actual production or a county average production figure which ever is higher. Your insurance will pay based on what ever percentage of coverage you bought less what ever production the adjuster determined was available for harvest in your orchard. So if you had 60% coverage on 140 bushel per acre yield at $10 a bushel and an estimated, insurance or proved crop of 10 bushel per acre you would get $740.00 per acre insurance payment less your premium.

I haven't had insurance for a number of years but gave up and bought it again after two bad years in a row, couldn't take a chance on another bad year.

[Common Tator]

Thanks Allen. That does help explain things.

I signed the forms and got them sent off to the USDA. I scanned them and emailed them and snail mailed the originals. The committee that approves it will meet on the 9th.

[Allen W]

Glad to help.

[heavyrebel]

Man, im in the wrong business....I want insurance for if my buisness plans/ideas fail!

Good luck!

[sammyd]

if you're in business you should be insured for things beyond your control.
Insuring your crop against loss or insuring your extrusion press against an explosion...
His business/plan didn't fail, it lost production.

[Common Tator]

I have car insurance. I don't want to have to use it, but will if my car gets wrecked or stolen. I have homeowners insurance on the house in the burbs, and farm/ranch policy for the ranch. I don't want to use the policies, but will be glad to have them if either place burns to the ground. The USDA crop insurance is the only insurance available for apples. We had a freak snowstorm in late May while we were in full bloom. It cost us our crop. I am using the insurance that we have carried for years now. There was nothing we could have done to save the crop.

I am sorry that some of you have a problem with that. That is your problem. Not mine.

[Lazy J]

Originally Posted by Common Tator

I am sorry that some of you have a problem with that. That is your problem. Not mine.

We had a substantial claim on our Crop Insurance this year, without which we would no longer be farming. Even with that payment we barely broke even with our operation this year. The Federally Subsidized Crop Insurance Program is a tool that is available for farmers, one that I will continue to use.

Jim

[Common Tator]

We heard that our claim has been approved. However because we didn't "harvest a crop", we will receive less than $2,000 for the loss of our entire crop.

Boondoggle indeed!

[Allen W]

Common Tator

I really think if we was smart and disciplined we would be better off putting our premiums in a savings account and insuring our selves.