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First on the Farm Newsletter September 2021

Insuring Your Success

By: Tyler Urban

The following is a story from the September 2021 edition of our First on the Farm Newsletter. 

Drought, wind, hail, excess rain…these are all the items that tend to keep farmers and crop insurance agents up at night. In 2021, I have seen all these issues affect the crops in the area. We started off the year dry for most all of South Dakota, and on August 24, the United States drought monitor had all of South Dakota in some sort of a drought. I personally thought my corn crop was toast multiple times during June! Fast forward to September, and a fair number of farmers and I have experienced the wind, hail, and excess rain due to some August storms. This proves why crop insurance is such a vital part to a farmer’s risk management plan.

For corn, soybeans, wheat, and other crops, insurance under a multi-peril policy, drought discussion is simple. If the level of production falls below an insured guarantee level, there will be an indemnity paid, much like any other cause of loss. However, for ranchers and forage growers there is a product available to help offset any losses that would prevent the pastures from reaching their full potential or hay fields not producing due to lack of rainfall. The Pasture, Rangeland, Forage (PRF) Insurance is a great tool to safeguard against drought for those producers. This program is designed to give you the ability to buy insurance protection for losses of forage produced for grazing or harvested for hay, which result in increased costs for feed, destocking, depopulating, or other actions. The PRF program utilizes a rainfall index to determine precipitation for coverage purposes and does not measure production or loss of products themselves.
For those that had some wind and hail damage, there are private products out there to insure against those losses. After the 2020 derecho across Iowa that caused extensive damage, there was some increased interest in these products. However, the cost of them sometimes can be a deterrent. Both hail and wind can trigger a loss on a multi-peril policy if the damage falls below the guaranteed level. This fall is a great time to think about what tools are available and how to best spend the insurance dollars to get the greatest bang for the buck.

Luckily, a few areas have seen a large amount of rain in the last week with more rain projected for a large part of South Dakota. On my farm, we still don’t have a puddle to be found, but we are starting to restock some subsoil moisture. Moreover, if the rain keeps coming, that will help with the combine fire danger this fall. As I have said before, my favorite time of year is combining corn and being able to see the gorgeous sunsets. It reminds me that those of us in agriculture truly do have the best jobs in world! Feel free to call me anytime. I’d be happy to talk crop insurance, farming, or SDSU football! I hope everyone will have a safe and bountiful harvest!

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