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Sunflower Crop Insurance for 2006

Wednesday, February 15, 2006
filed under: Marketing/Risk Management

With the 2006 price election for oil-type sunflower at $11.75 and $15.00 for confections, it’s likely that multi-peril crop insurance will again be the only option to consider for sunflower in 2006.

Revenue Assurance policies are not likely to be competitive, and a key reason is that the sunflower RA policy continues to use the Chicago soybean oil futures contract to determine the RA sunflower price.

The RA price is determined off of the average closing price of the October soybean oil futures contract price during February and September. For RA to compete with the multi-peril price election, the futures price in February or September would have to be about 25 cents, and above 30 cents for confections – that is not likely to happen.

The relationship between the sunflower price and the Chicago soybean oil contract was broken when NuSun, high oleics and hullers began to dominate the oil-type market. That is very likely to continue into the future. The multi-peril price elections for 2006 oil and confection sunflower do not reflect the Chicago futures contract. It is assumed that the Chicago oil contract was used to determine the multi-peril price elections in the past.

Dark roast is now eligible as a quality factor for sunflower seeds that go into human consumption as kernels or in-shell. Dark roast usually occurs in relationship to Sclerotinia head rot. The harvested seeds look fine until the kernels are roasted in hot oil. It is at that point that the kernels turn dark and have a bitter taste. Processors test each load for dark roast and have a very small allowance for sunflower seed that turns dark when roasted. The problem surfaced in the Sclerotinia impacted 1999 crop. The NSA requested this coverage at that time and RMA has now completed all of its studies resulting in coverage for the 2006 season.

Less restrictive written agreements are also available this year in counties where crop insurance policies are not available.

4.After the passage of the ARPA Act legislation in 2000, farmers could no longer write written agreements to insure a crop using “similar crop” history. Farmers needed a three- year history of producing a non-eligible crop before a written agreement could be considered. The change in essence stymied the advancement of introducing a new crop in an area without a production history.

The National Sunflower Association and lawmakers from sunflower-producing states argued that the planting flexibility afforded by the Farm Bill was reversed via this legislation – that this interpretation was not the intent of the writers of the Farm Bill.

Recently, however, Sen. Pat Roberts of Kansas added an amendment to a 2006 appropriations bill allowing RMA to use similar crops when establishing written agreements for crop insurance. That amendment passed and RMA officials quickly generated the necessary rules for implementation for the 2006 season.

Thus, farmers in counties not eligible for sunflower insurance are again able to use similar crops for a written agreement. A similar crop is defined as “the same category of crops such as row crops, having substantially the same growing season such as planting and harvesting dates, require comparable agronomic conditions such as water and soil types, and be subject to substantially the same risks.” This amendment should greatly simplify the process of establishing a crop history for written agreements and allow producers to be insured in case of a loss.

Tom Young, a S.D. sunflower grower on the NSA board, said in a recent news article that the availability of crop insurance is vital to the expansion of sunflowers in counties where farmers have not been eligible for coverage. “The safety net that crop insurance provides is a must, especially with the increasing cost of ... fuel and fertilizer,” he said. “More and more producers are looking for alternative crops, and one of the bright ones is sunflowers.”

In the future, perhaps as early as 2007, the NSA is hoping the RMA will revise crop insurance rules to allow narrow-row sunflower planting in areas where it is not permitted without a written agreement.

There continues to be interest in planting sunflower in narrow rows, commonly referred to as solid seeded sunflower (or in crop insurance jargon, NIBR – “Not Intertilled Between Row”). The RMA has insured solid seeded sunflower in the Dakotas, Minnesota, Montana and Wyoming for several years after it was determined that yields and quality were not impacted using this practice.

This is not the situation in states outside of these states, however, including Nebraska, Kansas, and Colorado. However, if a farmer in these areas wants to use narrow rows to plant sunflower, it is merely necessary to guarantee that inter-row cultivation is possible. For example, 22 inch row spacing is becoming more popular in many areas. This would not be considered solid seeding if indeed the producer is able to cultivate between the rows if necessary. The NSA has been working with RMA on this definition, especially with the addition of several new post-emerge applied herbicides.

Maps of final planting dates for 2006 for the Dakotas, Minnesota, Texas, Oklahoma, Kansas, Nebraska, Montana, Wyoming, and Colorado can be found on the NSA web site, Go to the “growers” link, then “2006 Crop Insurance Planting Maps.” The final planting date as listed on these maps is the last day that you can plant the crop and still get full coverage. After this date the coverage is reduced by 1% per day. The actual final date that RMA allows the crop to be planted with reduced coverage is anywhere from 20 to 25 days after the date listed on the NSA maps, depending on the county.

Consult with your local crop insurance agent for more information about crop insurance for sunflower. The crop insurance closing sales deadline is March 15. – John Sandbakken, Larry Kleingartner

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