Will a weather event like drought impact crops somewhere in the world in 2016? If so it could be a turning point for corn and soybean prices, but weather certainly isn’t something to count on or plan for, according to one specialist.
Chris Coffey is Assistant Vice President of Crop insurance for Farm Credit Mid-America, and he says drought is not very likely this year.
“I’m not sure that I would be planning around a drought for this year seeing that we just had one in 2012. So maybe they need to look at their marketing plans and how that crop insurance will work with their marketing plan.”
Coffey told HAT that producers need to know how to tie crop insurance and marketing together, and now is a good time to learn how.
“We can sit down right now with a producer and give them a really close estimate of what their bushel guarantee is going to be for this year, and their revenue guarantee, which is going to allow them to make some more educated decisions. They’ll probably most of all feel more comfortable making those decisions this time of year vs. in August when we would normally send a schedule of insurance.”
Could this be the year to make a change in crop insurance coverage? Coffey says his agents are trained in helping to answer those questions, and it’s all part of preparing now to be successful in 2016.
“One of the biggest things right now would be sitting down and looking at what their coverage levels are and what their guarantees are going to be and making sure that is the right plan for this year because it changes every year and everyone thinks that their crop insurance is a lot of times easier to leave it the same. But you can change your plan and we have some customers that change it every year depending on that situation. So it may be the year to actually buy up. It depends on the customer’s situation but it may be the year to look at increasing coverage levels. One of the other things is again, being able to make a more educated decision on their marketing plan, and that’s critical this year.”
He adds crop insurance is probably the most important tool in a farmer’s arsenal.
“For the dollar amount that they’re going to be spending towards the crop insurance premium, there’s no other tool out there that they can use that will come close to protecting them like it will,” Coffey said.