Moisture/Crop Insurance

[smcgrath76]

This year has been a real test for the crop insurance system from AFSC. We carry moisture insurance on pasture and Barley/Moisture on our Corn. Currently our only option is to be based off of weather station data. We are right in the middle of three stations with no station really close. Because we are not really represented by other stations as we are in a bit of a microclimate we use the closest station.
This year our station got enough rain in June that we will not receive any payment, yet we received only a very small percentage of the rainfall our station got over the same time frame. Because we are far enough north we can't purchase Heat Unit insurance on our corn.
Needless to say, I am not sure that the risk management part of this program is worth our while, since it is costing me money and not managing my risk.
Any suggestions, experiences from others?

[grassfarmer]

It seems tough to get any payback on the grass/forage side in Manitoba too. The rates are cheap but the yield levels for production insurance are so low you're unlikely to ever get a pay out. For corn silage its 10 tons/acre, thought I'd need it for sure this year as the field was hailed brown mid June - it's the only thing that's bounced back this summer - 7' tall now on absolute minimal moisture.
We don't take insurance on hay crops but did on greenfeed so expecting my first ever payout as that crop was woeful.
I don't think they do moisture insurance here other than insuring against excess in the spring. They have a horrible pasture production insurance program - it's based around bad practice. You dump x # of cows on pasture in spring and it covers you for 90 days grazing - if the cows are out of grass and you have to bring them home early you get so much per day payout per cow. It would be difficult for us to participate given the type of management we do - if we manage pasture well and get 120 days out of it we get no pay out. I've always tended to self-insure other than corn and greenfeed but will reconsider this winter. Maybe we don't need coverage on corn at all despite it being a higher input crop? Maybe we should take it out on hay?

[perfecho]

Use conventional corn...seed from Manitoba.....less input costs and since I am not doing much grain anymore, I am just taking the chance with no insurance. Green feed was seeded later in June, corn May 20th...and looking tonight, doing quite well, considering. Many early crops here are yellow and look pretty light. Missed many of the rains even 3 miles north of here...but we are squeaking by.
I figure if we have a crop wreck....some cows will just have to go to town...not going to buy my way out of it like the BSE years.

[grassfarmer]

Use conventional corn...seed from Manitoba......

You need to go further east for your seed! We tried that stuff too but find you can easily double the yields on the same inputs with non-GMO hybrids from DeDell.

[perfecho]

Thanks for the heads up...will look into it.
At this point, am quite impressed with the growth....much of it 7 to 8 ft with limited growth. Also. like the idea of supporting a family business, but my next google will be to see what I can find out.
Thanks....good luck with rest of the year!

[grassfarmer]

DeDell is a family business too! The owners are the plant breeders. We think their corns are so much better than the big name brand RR stuff for silage or grazing - big leafy healthy plants. Need some more heat units than the conventional you are talking about but they have lower heat unit varieties than what we've tried too. I think once they get better established in western Canada they will blow away the competition - as long as you can manage the weeds.

[smcgrath76]

Interesting. The year we actually got a large payout on our silage greenfeed moisture was a dry year and it paid on corn that was the best crop we ever had. The year before was wet, with limited heat units and we never got anything and that was when we could have used it.
I am really struggling with risk management here as it seems the risk and volatility keep increasing and coverage options get more expensive and less effective all the time.
Maybe I am cynical, but I am thinking we would be better to self insure and just keep driving costs down.
I did not buy calf price insurance this year as the options don't fit very well and the price was too high, but I did buy and sell my first options contracts. I think moving forward this bit more involved strategy will help me manage risk much more cost effectively.
We are super patchy rains here, but look to have good yield on our cover crop mix, and the corn looks good.
We tried some BMR 84 corn but all of us that tried it had germination issues. Rode through it today on the way home and the corn that did grow is OK - about 2-3 feet high, but the volunteer alfalfa and the rows where I fed barley this spring are tremendous. I was going to reseed it to italian ryegrass, but now think I am just going to leave it alone.

[perfecho]

Should have read.... with limited rain. Very leafy, tasseling and setting cobs..... think the cows will like. Used to use corn for silage, first year wintering grazing. Keep getting rid of more and more machinery.... maybe swather next....:-)

[grassfarmer]

Sean, is that moisture deficit insurance all they have in AB? you don't have anything simply based on low yield? If you only have the moisture deficit that wouldn't seem a good fit for insuring corn. As you say the cold, wet year will be when it produces worst. I guess one of the biggest risks on corn is an early frost which would kill it. I see it was down to 2.5C last night at my old place - not corn country!

perfecho, this is our 3rd year of corn, all on the same field. We grazed it two years but this year will silage it as feed is so short, we plan to rotate it out and seed alfalfa/grass into the stubble and put corn elsewhere next year. I think that makes sense for us - like bale grazing you are "wasting" some when you have plenty which accelerates the land improvement. It has done wonders for the soil - the corn with it's deep roots, the cattle feeding on it, the manure and stalks left behind. Turned a sterile piece of concrete into a mellow soil full of worms in 3 years. Its maybe counterintuitive but corn on corn works great - if the cattle are grazing it.

[perfecho]

Thanks for info...….want to do the quarter into half pasture half corn....bale first cut and feed next door with corn grazing...then let them possibly calve on it the following spring or use as April grazing. Will rotate in 4 years approx.....if this old guys still has "cows around".

[smcgrath76]

GF - for pasture insurance moisture deficit is about it. For corn (high cost crop) you can basically only use silage moisture if you are planning to graze it. For hay, you can do moisture or yield (which in my mind is the same thing). The problem with a lot of the yield type of insurance is that it eliminates your flexibility. For example, if you know the hay is poor you still have to hay it instead of being able to graze it when you want to.
For corn, same thing, yield insurance means you are limited in how you use it and have to clear things with AFSC before you do something different. In my experience in a serious drought, the flexibility is usually worth more than the payout.
Additionally some of the options (eg: hay yield) pay out so poorly in AB you would be lucky to average out your premium over 20 years. I think the actuaries are going to get more expensive as we see more extremes and larger claim values, further exacerbating the problems.

[grassfarmer]

Here we insure corn as "silage corn" for yield and quality. If you want to graze it they come out and do yield clips and send the sample away for analysis before you graze it so that system works well enough. Yield guarantee is for 10 tons acre and 70 TDN. I had some that was over 10 tons but only 68TDN but there was no pay out - I hope if you get an early frost (like this time of year) and it comes up woefully short on TDN you would get a pay out. That's the worst with insurance - you don't usually find out the truth until after the event but they will happily cash your cheques when you are in no claim positions.
Like tin roofs damaged in the hailstorm we had - with one company damage was not covered unless you had additional "dent insurance" - of course no-one can remember being told about that by the insurance agent at the time they were purchasing it!

[kato]

.....

We gave up on crop insurance for our corn. One year we had a bunch that drowned out, and what we considered a very uneven crop but still got no payout.

In Manitoba corn insurance premiums are very high.

Another year we got snowed in before the cows finished grazing, so when we went out to check in the spring to see if we could send them out to finish it off the deer had done it for them. 5 to 10 acres.. gone. Crop insurance wouldn't even discuss a wildlife claim. That was the final straw for us. From our experience the system was not set up for any kind of reasonable coverage for grazing corn.

We just buy hail insurance now. It's our biggest risk anyway.

[grassfarmer]

What's your history with early frosts kato? I'd have thought that was a higher risk than hail?