Margin Insurance the way of the future?

[mbratrud]

Hopperbin, I could tell you my margin number and then i would have to find out who you are and shoot you. They are fairly good.

[gustgd]

Mark has explained it well. GARS has built a
model using over 15000 farmers data to show the
reinsurers where to price and makee money. It
has to or everyone goes home.
Biggest risk to private insurance that I see is the
copycat companies that come in and try to
reverse engineer the program using Agristability
or even worse cash basis accounting. Then
farmers will start to see long payouts and fraud.

It is just math, if you spend a dollar in expenses
and are insured for that dollar it's covered.
Theory being that you won't spend it unless your
likely to see a return. Farmers hate wasting
money more than insurance companies. The
$25, $50, $75 $100 margin over expenses is
where the real decision is. IMO that's where you
self insure. Unlikely that with historically high
prices/ average yieds tonot ake money this year.

Anyone get 20 bus canola? What if it was $11.00.
I know I lose money there. What do you get from
crop insurance with 25 bu. of $5 wheat.....what did
someone say earlier this week about that whoosh
we heard.

Back to the fraud and risks to company. If they
insure you you allow them to have access to your
records for three??? Years after that crop. If your
neighbours pulling in $250 margins and your at
$150 red flags go up.

I hear pricing will come down this year as
reinsurers have more confidence in program and
to get more farms in program. Larger numbers =
less risk #counterintuitive.
Biggest pain in ass is the building of accrual data
which they will do for a cost. Or if your accountant
will sign off on data you supply.
Just like at the bank better more accurate
numbers mean better rates. I believe scotia, TD,
and Affinity CU all use GARS at 85% security
with others looking. Stay tuned

And yes cotton.

[freewheat]

"farmers hate to waste money even more
than insurance companies".

Sorry, don't tak this personally, but
sheesh if this were the case, there
would be fewer new drills, combines and
tractors out there, and land would not
be selling for 280 000 a quarter. lol

Regardless, of all that, If the highest
margin coverage they offer is 100 bucks,
for many, regular crop insurance will be
covering for WAY more than that at less
cost. Subsidized I know...Which is
unfortunate. It really is, but reality
is reality.

I guess I am in wonderment at the farms
who have been pulling off such big
margins, why they,

1. Have low crop insurance coverage if
their crops have been paying so well.

2.Would opt for 100 dollar an acre
margin coverage, and think that is a
good deal.

Still trying to get my head around this,
I feel like I am missing something here.

An example:

If a guy is covered for 28 bushels of
canola at 11 bucks for a gross of 308
dollars, he would have to spend 208
dollars in CASH on his canola?

And that margin is whole farm with gars,
right, so when blended with other crops,
it brings up ones average margin?

Sorry bout the questions, you all do not
have to answer them. Just working the
numbers is all.

In the too wet years my margin was still
over 100 bucks due to ci payout, no
inputs, and some grain inventory
carryover.

I guess my point is in this day and age,
100 dollar margin is pretty small
potatoes for most crops, I thought there
would be higher coverage. If the farmers
they are after are so stellar, why do
they offer only 100 bucks, and why do
the farmers think this is all that good?

[mbratrud]

Freewheat I agree that the $100 Margin coverage is not enough and they should offer more. As for crop insurance though you need to remember to average across your farm. We can't grow Canola on every acre. Also Crop insurance is primarily production, it does not protect you from a major commodity price drop or Sky high inputs. Having said that though this is really where I struggle with my decision. I believe the tools are there to manage input and commodity price risk and is really the production risk that threatens my farm.

Anyone that wants to email me direct mark@bratrudag.ca upon verification of which you are I will send you a calculator that I developed that you may find helpful. You can put in your farms information and It will indicate to you very quickly where you money should be spent. GARS or Crop Insurance, so far calcs I have done with few different guys can go either way depending on farming operation.

[mbratrud]

damn spell check, I looked at the spelling and grammer of my posts and decided to spell check LOL. trying to do to many things at once. love to get engaged in these conversations but dont have time ha ha ha. anyway WHO you are rather than WHICH, in my previous post.

[cottonpicken]

???????????????????????????????????

[mbratrud]

Mr.C are you confused or trying to make sense of my last post LOL

[cottonpicken]

Dont understand gustd "and yes cotton" comment.

[cottonpicken]

Lots of good info not commenting because i don't
know as much as you guys.

[gustgd]

Oct 24 @ 22:02 cotton replied about you own 2%.
Really....... That's what my yes was about.

[cottonpicken]

Whoops forgot i had asked the question