Below is the article on Crop Insurance and for an Iowa farmer with 1,000 acres of corn and 1,000 acres of soybeans, it comes to around $100,000 per year or roughly 22 cents per corn bushel and 75 cents per bean of soybeans. The Variable Production Cost column in our EXCEL Spreadsheets captures this nice little savings for all Production Inputs. I do admit rather liking this saved Total Variable Production Cost savings. Guess, we all enjoy this this rather nice savings on our Variable Inputs. Article is below:
Crop Insurance Cuts: Will You Be Affected?
May 24, 2013
By: Nate Birt, Farm Journal Social Media and News Editor
In a 59-33 vote, Senators have adopted a measure that would limit government subsidies for crop insurance to roughly 20,000 of the wealthiest U.S. farmers, media reports say. The vote comes amid ongoing discussions in Washington over a new five-year farm bill.
The subsidy for the top 1% of farmers—those with gross adjusted incomes higher than $750,000—would fall to 47%, Reuters says. The government now pays 62 cents on every $1 in premiums.
Not everyone is pleased with the amendment, The Associated Press says. Sen. Debbie Stabenow (D-Mich.), who chairs the Senate Agriculture Committee, says it would cause fewer people to buy crop insurance and jeopardize another provision tying insurance to environmental compliance on farmland.
Learn more about the 2013 farm bill discussion in this video clip from AgDay:
Jamie Wasemiller, Gulke Group analyst and owner of Wasemiller Insurance Agency, says this vote is just the latest in a long trend of scrutiny of the crop insurance program. "Between the House and the Senate, they really want to take money out of the crop insurance program."
Looking forward, Wasemiller says it is difficult to say what federal programs will be available for farmers. "There’s a good chance that subsidies will not go down for those high-end guys, but we could certainly see this trickle down to all farmers."
His advice is to stay in touch with your senators and voice your opinion on the program. "Don’t be afraid to hound those guys," he says.
Also, he suggests ramping up your knowledge and the overall structure of your crop insurance and marketing plan, so you can weather more risk. "Do the best you can today, so that no matter what the government or the weather does, we’re in a place where we can say we can manage all those scenarios."
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Yes, 75 cents is steep. Farming is an expensive hobby.Suppose we could all go to being self-insured, but you better have $3 Million in a self-insurance accruel account just in case you have a complete and total hail storm wipe-out.
I`ll play beelzebub this morning, cause it`s raining and I`m crabby It`s just been the last few years that we`ve been able to "insure a profit" and that isn`t necessarily a good thing. A guy buying 500 head of feeder cattle has no guarantees of making anything or lossing everything. Someone drilling holes for oil isn`t guaranteed anything. I have neighbors that have never taken crop insurance and so far they are way ahead of the game with the premiums they`ve saved, but if you`re gonna buy it, you better buy it every year to spread out the cost of your premiums.
My prediction is there won`t be a big change in crop insurance, because endusers want it the way it is. A perennial bearish analyst (working for the endusers) will tell you "sell up to your APH". And to alot of farmers that makes sense so that`s what they do, the farmer makes a little, the enduser was able to pry out a supply of grain early so everyone is happy. So, endusers will make the rounds in congress with sacks of money and buy one more politican than they need to keep the status quo. Without that "sell your APH" shtick, endusers might have to bid a buck more to pry it out of the farmer`s hands. If there is a cosmetic change to crop insurance, there`ll be loopholes.
The lobbiest for the enduser already have their fingers in the pie. Make the galldarn Payment Limitation $250,000 GROSS !!! That way the spin off entities or individuals that will result will have to meet the same limitation. Keep the same eligibility requirements for "activley engaged" with verified proof. If you want to farm the counties in your area do it on your own dime!!! That's American Capitalism...take the risk get the reward or the failure.
Just limit insurance to 1000 acres of cropland, most operations will still qualify for full coverage, and let those who want to farm the world "assume the risk" along with their bankers on uninsured acres. Crop Insurance has been the enabler for spreading costs over marginal acres and expanding those acres on land coming out of CRP.
While we are at it, lets just eliminate CRP and all the programs associated with SCS. We have a bloated federal and state bureaucracy which feeds off these programs. It is time to return these federal and state employees to the private workforce, where they can stand in food stamp lines with the rest of those citizens who are now long term unemployed.
We should also eliminate the "Extension Service" in most states, since they do nothing relevant to farming anymore, other than provide highly paid lifetime state university employees in drone positions in most counties, and we pick up the tab for those dead heads.
We should also fire any employee working in our land grant universities who receive a stipend or grant from the likes of Monsanto, Syngenta et.al., because their loyalty lies with these companies that poison our environment and kill off desirable species.
In Iowa we should consolidate all FSA office to one office, located at the State office in DSM. The office should be staffed with a secretary to answer the phone, and a drone to act as Director. Without government programs anymore, and Federal Crop maintaining planting history of farms, and no funding for beginning farmers, it might be time to just close down that agency.
We should also consolidate counties, with each county seat comprising 20 counties, that way we could eliminate all the District Court Judges, Sheriffs, Boards of Supervisors, and Prison Industries each county supports.
Well . . . this rant is finished, pass the popcorn and get me another Corona. 52 degrees here this morning feels like 43 outside, cloudy and cold, man we are really piling up the GDU's. Kinda looks like we are going to have a killing frost in the last week of August or the first week in September. John
I don`t know the exact figures, but let`s say there are 2 million farmers and the government spends $20 billion on farm subsides/crop ins, how `bout send each farmer a equal check for $10,000 and he or she can spend it on insurance or tree planting or whatever? That would sooth the warm fuzzy need to keep the American Gothic/Dodge commercial, family farm idea funded and whether you have 40 acres or 40,000 acres you all get the same check, no need for EWG.Org cause everyone gets "$10,000" big shot with 36 row planter gets "$10,000" little guy with a 999 John Deere wire check planter gets a "$10,000 check" God I`d love to see that.
But the CRP is kind of shutting the barn door after the horse is gone. Those "mountains" have been farmed out and top soil gone long ago, they aren`t profitable to farm anymore, why pay someone to seed it to Brome grass? Those white slopes aren`t going to be farmed and couldn`t be hurt anymore if they were. Mother Nature would take it`s course, growing weeds, slowly rebuilding top soil over the next 150 yrs.
With extension offices, I`m very sorry, they are nice people, but if I have a question I will go to the seed rep or coop or chem rep or go on the internet or a book in my library for the answer. Pressure canner testing (who cans anymore?) can be checked at a hardware store. The days of "Hank Kimball county agent" are long gone. Don`t get me wrong I`d love to go back to those days but, they`re gone.
I won't be affected by means testing crop insurance as proposed. I don't make that kind of money and never will. I'll admit it brings it into stark contrast that crop insurance is not consdered a "pay in pay out" plan like auto insurance but is considered a subsidy. The discussion of means testing has nothing to do with whether or not you are likely to have a loss, it has to do with income redistribution. Social security and medicare are next on the agenda. I suppose the day will come when my old S10 will travel on the highway for free and your Lexus will pay $1/mile.
I've used crop insurance in the past and am using it this year, but have been having some serious thoughts as to whether it really pays or if it just gives peace of mind. In 2012 when I took a yield hit the payout was about equal to my premium. I can handle a really bad year or even two without folding up.
My reaction to the government programs is that they are less and less attractive compared with the cost to the famer. In the case of crop insurance, if tillage plan compliance is tied to it, how many farmers will drop crop insurance or take their chances with a compliance checki? Will each payout require an audited compliance check?