Andrew M. Cuomo, Governor | Richard A. Ball, Commissioner
Jessica Ziehm, 518-457-3136

March 02, 2012

Commissioner Reminds Farmers of March 15 Crop Insurance Deadline

Prices for Grain Coverage Announced

New York State Agriculture Commissioner Darrel J. Aubertine today announced some major changes in crop insurance that will benefit New York growers. For the first time, producers can purchase up to eighty-five percent protection for corn and soybeans in New York, up from seventy-five percent. In addition, the insurable price election for corn silage has been raised to $50/ton for this insurance year, up from $42.50 last year   The Commissioner also reminded them of the upcoming March 15 deadline for purchasing or modifying crop insurance policies for the 2012 growing season.

            “Crop insurance is one of the few tools that can provide farmers with a level of assurance against adverse weather, disease and market fluctuations,” said New York State Agriculture Commissioner Darrel J. Aubertine. “These new modifications are welcomed and I would encourage farmers to take a hard look at them and to compare minimal crop insurance coverage with more substantial crop insurance coverage that can actually cover costs of production or replacement feed; however, producers need to act quickly as the deadline to purchase these policies is March 15.”

            Aubertine said, “Last year, due to adverse weather in the spring and the flooding caused from Hurricane Irene and Tropical Storm Lee, over 1,239 New York producers received indemnity payments totaling over $38 million.”

            The March 15 crop insurance deadline applies to most spring-planted field crops, including corn, corn silage, dry beans, barley, oats, soybeans, fresh market sweet corn, forage seeding and production, grain sorghum, potatoes, spring forage seeding, processing green peas, fresh market and processing snap beans, and processing tomatoes, cabbage and sweet corn.

            Prices for crop insurance protection were announced by USDA yesterday:

Corn conventional practice insured as grain is $5.68 /bu.
Corn organic practice insured as grain is $7.99/bu.
Corn insured as silage with a tonnage guarantee is $50 per ton.
Soybeans conventional practice insured as grain is $12.55/bu.
Soybeans organic practice insured as grain is $19.97/bu.

            Crop insurance is made available by county.  If your county is not one of the 38 counties where soybean crop insurance is available, your crop insurance agent can provide coverage using a written agreement, which basically references an adjacent county policy. To insure by written agreement, the producer must have production records for the last three years for the crop to be insured or for a similar crop. Spring wheat and other crops for which premium rates are not established for the county may be able to be insured by written agreement if filed by the March 15 deadline.

            A list of crop insurance agents who sell crop insurance in your county is available on the web at or at your local USDA Farm Service Agency office.

            Crop insurance for grain crops is based on yield, including catastrophic (CAT) coverage, yield and revenue protection.  CAT coverage is the lowest level of insurance a farmer can purchase that pays out only after more than a 50% loss and only for 55% of the price election and only the minimum or default level of prevented planting coverage.  However, levels of crop insurance above CAT also can provide for higher levels of prevented planting coverage, should you be unable to get into the field on a timely basis in the spring.  Grain farmers should compare the advantages of yield coverage with revenue coverage and revenue coverage with harvest price exclusion to take advantage of what will work best for them.  With the help of a crop insurance agent, you can review your risk exposure and determine the strategy that is best for you; just be sure to do so before March 15.

            An example comparing CAT coverage and 75% yield coverage follows.  For purposes of this example, the production average for corn is 120 bushels per acre, and farmers experienced an 80% loss.  The established price is $6.01/bu (2011 price).

            The farmer with CAT coverage would have received a payment of $119.16/acre.   (CAT coverage only covers losses in excess of 50% of the actual production history, and only pays 55% of the crop price election.) To calculate, multiply the production average (120 bu) times the coverage level (50%) to get 60 bushels (the guarantee), and subtract from that the production average minus the actual loss (120 bu - 96 bu) or 24 bushels.  Subtract the actual production from the production guarantee (60 bu - 24 bu) to get the number of bushels that will be paid on, which is 36 bushels.  Multiply 36 bushels times 55% of the insurance price ($6.01 x 55% = $3.31), and the result is $119.16/acre.  To purchase that coverage in 2011, it would have cost roughly $300.

            The farmer with 75% Yield Coverage would have received $396.66/acre.  To calculate, multiply the production average (120 bu) times the guarantee (75%) to get 90 bushels guaranteed production. Subtract actual harvest from the guarantee (90 bu - 24 bu), which totals 66 bushels.  Multiply that by the established price ($6.01) to get a payment of $396.66/acre.  Crop insurance would have cost the farmer $10-21/acre, depending on units chosen.

            Enterprise units may reduce the cost of traditional coverage and allow producers to purchase insurance at higher coverage levels.  Higher coverage can better protect the higher than normal crop prices, should a weather disaster occur. Producers insuring multiple or large farms may wish to insure using “enterprise units” to receive up to a 50% premium discount.  However, the entire farm's production is averaged, so a comparison between enterprise units and optional units based on farm weather history is best for determining the most appropriate coverage for the operation.

            The March 15 deadline also applies to first-time buyers of Adjusted Gross Revenue-Lite (AGR-Lite).  AGR-Lite is a revenue insurance plan for diversified growers that provides whole farm production coverage. 

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