Crop Insurance Deadline Nearing

March 15th is the deadline to purchase your crop insurance for the 2019 crop year. During this brief period, you will need to update any entity changes ? going from individual to a Corporation, LLC or Partnership, etc. Some of the things to go over as you finalize your crop insurance decisions for the 2019 crop year include verifying shareholders of entities, level, plans of insurance and adding land in new counties. With profit margins for crop production this year being very tight, your insurance decisions are critical.

ARC / PLC changes
Producers may make a new election to obtain either ARC or PLC for the 2019 crop year. That election also applies for the 2020 crop year. Producers may now change elections annually during the 2021 through 2023 crop years and owners can update the farms PLC payment yield beginning with the 2020 crop year. ARC payments are based on physical location of the farm. A yield plug of 80% is to be used under ARC to increase yield history, but not in excess of increased yields under trend-adjusted yield for crop insurance.

Multi-County Enterprise Unit (MCEU)
The U.S. Department of Agriculture’s Risk Management Agency (RMA) is offering the new endorsement known as the Multi-County Enterprise Unit for farmers interested in covering two counties in the same state under their crop insurance policy. To qualify for the endorsement, one county must qualify independently for an enterprise unit and the other county must NOT qualify for an enterprise unit. Both county crop policies in the Multi-County Enterprise Unit must be with the same Approved Insurance Provider and have the same elections for Multi-County Enterprise Units, insurance plan, coverage level, and enterprise unit by practice. The 2019 availability includes (when on AD): Small Grains, Coarse Grains, Cotton, Canola.

MCEU is elected at the sales closing date on the application in each county, but that does not automatically make the county eligible. It must still meet criteria for forming a MCEU at ARD (Acreage reporting date). A producer can have one MCEU for irrigated practices and a different MCEU for non-irrigated practices. Both policies must be insured with the same AIP.

As an insured producer, you will elect the MCEU endorsement at sales closing date and counties are not designated into an MCEU with a primary and secondary county until the ARD.

Sugar beet changes
The changes to the sugar beets policy updates the policy provisions and definitions to better reflect current agricultural practices for sugar beets. They also help simplify the policy for both producers and crop insurance providers, better aligning it with what is used across the industry and clarifying options available. There are some big changes with the sugar beets, including the removal of Stage Guarantees.

Current Language:
1) Sugar Beet Crop Provisions
      i) 1st Stage Guarantee: 60% of final stage production guarantee
     ii) Final Stage Guarantee: 100% of the final stage production guarantee
2) Stage Removal Endorsement Option
    i) Removes stages: 100% of the production guarantee regardless of stage
New Language:
1) Sugar Beet Crop Provisions
    i) Stage Guarantee language removed
   ii) 100% of the production guarantee regardless of stage
2) Stage Removal Endorsement Option
     i) Incorporated into base policy

Other sugar beet changes
• Converting the APH from tons to pounds of raw sugar, the 2019 databases have updated with 2018 production.
• Early harvest factor changes have also been updated and replant payments have increased to $110/acre.

Other crop insurance updates
• Allowing crops that can be grazed and mechanically harvested to be insured under policies for each use
• Increased CAT policy fee from $300 to $600
• Require continuing education for agents and loss adjusters
• Require R&D on Whole Farm Revenue Policies to improve effectiveness

The Prevented Planting Coverage level has also changed from 10% to 5% on elected crop for 2019. See the chart to the left.

We encourage you to call an AgQuest Crop Insurance Specialist to talk through all the changes to make sure you have the right coverage for your operation. We understand that with current margins, it may seem like an easy solution to reduce costs by cutting your crop insurance. However, it’s important that you weigh the risks of not having coverage if a major weather event happens. Crop insurance is an excellent risk management tool; as some of you probably experienced first hand in the 2018 crop year.

Contact your local AgQuest Crop Insurance Specialist today to review your policy and make sure you have  coverage adequate for your farm operation!

AgQuest Insurance is an equal opportunity provider.