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Crop Insurance: 6 Key Considerations Every Producer Should Keep in Mind in 2024

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Still trying to decide what crop insurance setup to choose before the March 15 deadline? Below are some helpful tips to consider when deciding on your 2024 crop insurance.

According to ADM Director of Alternative Revenue Brian Wiggins, there weren’t many changes to core policies relevant to row crop farmers. However, there were some changes when it comes to what land is considered high risk, as well as some expansion of a few “pilot” type policies.

“The largest change for the average farmer this year was the projected price used for calculating guarantees on your crop insurance policy in most crops,” he says.

“Those changes may impact the cost of your policy but for most farmers, it will ultimately also decrease expectations of the revenue you may expect to receive this year.”

When deciding on crop insurance for 2024, try to keep the following in mind:

1) Clarify the goals for your operation

“Ask yourself, ‘What are the goals of my operation? How can I protect against not accomplishing those goals? And what will help remove stress from my operation by using crop insurance?” says ADM Crop Risk Specialist Dave Rosenmeyer.

“If you are looking at lower guaranteed revenue because of lower spring prices, you may elect to increase your percent coverage to protect higher revenue levels.”

2) Consult a licensed crop insurance agent

“The primary resource for all crop insurance decisions should lie with a trusted licensed crop insurance agent,” advises Brian Wiggins.

“Make sure you speak to your crop insurance agent about the most favorable policies for you before making your ARC/PLC elections at the FSA. This may impact what you can select based upon the policy you take, specifically the Supplemental Coverage Option.”

3) Ask lots of questions

“Ask questions of your crop insurance agent or your ADM Account Manager about how you can get the most out of your policy in the way you market your grain,” adds Brian Wiggins.

“Crop insurance is foundational to other areas of risk management. It’s not only the single most cost-effective way to protect against a decline in revenue expected on your crop, but also a highly effective way to support selling grain ahead of harvest because of the bushels you are guaranteed with your policy.”

4) Be open to new coverage levels or policy types

According to Brian Wiggins, it’s important to examine new coverage levels and be open to looking into types of policies you may not have used before.

“If you view crop insurance as an important risk management tool that can occasionally be a revenue-adding component, it will lead you to a potentially different decision about the type of insurance you will buy,” he says.

5) Go beyond viewing crop insurance as a cost

“People may be tempted to look at cutting costs in crop insurance, but another lens is viewing crop insurance as an investment in appropriate defense and offense,” says Brian Wiggins.

“It may be in a farmer’s best interest to change the level of insurance protection they have, modify the types of coverages, or include other types of policies while dropping others.”

6) Try using the ADM Crop Insurance Worksheet

“Understanding how revenue insurance works can add comfort in making sales and knowing revenue insurance may provide revenue to cover contract cancellations in the event of a shortfall in production,” says Dave Rosenmeyer.

He suggests using the ADM Crop Insurance Worksheet as a way to crunch the numbers and get a better idea of what the best option might be.

ADM provides this communication for informational purposes, and it is not a solicitation nor offer to purchase or sell commodities. The sources for the information in this communication are believed to be reliable, but ADM does not warrant the accuracy of the information. The information in this communication is subject to change without notice. If applicable, any information and/or recommendations in this communication do not take into account any particular individual’s or company’s objectives or needs, which should be considered before engaging in any commodity transactions based on these recommendations. ADM or its affiliates may hold or take positions for their own accounts that are different from the positions recommended in this communication.

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