How Crop Insurance Launches Marketing
Most years, pre-harvest sales make good sense. But the anxiety of committing grain you don’t have in your bins yet can deter this smart business decision. This is where crop insurance comes in.
Mark Lipcaman, Regional Origination Manager, suggests thinking about crop insurance not just as an expense that rarely cashes in, but as an annual backstop that protects your revenue.
“Although farmers often tend to focus on the outlier years, historically, the best marketing opportunities are in the spring,” says Lipcaman. “Crop insurance gives growers the confidence to lock in profits in the first and second quarters.”
Crop insurance is based on your operation’s Actual Production History (APH) yield. Coverage levels range from 50% to 85% of your APH, with premiums varying based on your APH, location, and the level of coverage you select.
“Crop insurance should be considered a revenue-adding component, not just a safety net against disaster.”
— Mark Lipcaman, Regional Origination Manager
Depending on what level you insure, that’s the portion you may consider forward marketing with more confidence. Revenue protection lets you protect not only a minimum yield, but also a known price, usually the spring or harvest average price, whichever is higher.
“It’s all about revenue per acre, not just the sale price,” said Lipcaman. “Crop insurance can guard against a lower yield per acre as well as a lower price per bushel.”
Revenue protection provided by crop insurance protects against what you hope does not happen. But when markets move and production changes, the protection against catastrophic loss can also be a valuable asset.
It’s easy to see how a minimum guaranteed revenue goes hand-in-hand with confident forward-marketing. This simple tactic allows you to capture value when the market provides opportunity, locking in profitable sales.
“Insurance gives you the freedom to build your marketing plan,” says Lipcaman, “and the confidence to make decisions.”
ADM is proud of an exclusive relationship and encourages farmers to work with agents of Crop Risk Services early in the crop year. Writing marketing plans and revenue protection policies in tandem removes stress and sets you up for success. We can help you navigate these complexities.
Hear more from Mark Lipcaman on Episode 22 of our podcast, In the Driver’s Seat: Get More Out of Crop Insurance.
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