CAIS Thoughts

[Yusishen]

If you have 100,000 in sales and a margin of 18,000 (after allowable expenses), then if you have zero sales this year, that means your margin is now negative (-82000 based on your example). This is where the whole coverage of negative margins question comes in. My understanding right now is that you are right, you'd only get the 18,000 back (some of which is your money). I'm not sure what happens if they start covering negative margins. Anyone have any ideas on how that might work (if they decide to do it)?

[TOM4CWB]

My understanding is that a cattle loss would be paid for.... if it was an insurable loss that Crop Insurance could have mitigated... it would not be covered.

[frustrated1]

I think the negative margin part has only 70% coverage of the negative portion. But so far it's not in existance. Why do you not have sales? Do they not still value the calves on hand at the end of the year as an elligible inventory adjustment?

[frustrated1]

oops, negative margin is 60%. From our CAIS meeting propoganda:
If the program year is negative you may receive a payment up to 60%of the negative margin.
If you are eligible to participate in Production Insurance but have not, program benefits will be imputed before the negative margin is calculated.

So cattle or hogs, etc would have some benefit to negative margins, grain would be offset with the assumption you took crop insurance. Keeping in mind of course the negative margin(part of amendment three) is not in place as of yet.

[lonewolf]

Thanks for the input. I was giving an easy to use hypothetical situation. I do wonder about the inventory as frustrated has pointed out. I suppose the gents at CAIS would view this as a inventory adjustment and not trigger the program.

Anyway from what I have seen this program will be of little benefit to my farm and as all other future programs will be tied to it I have no choice but to set up an account and join in.