Article Archives
Sunflower Crop Insurance for ’09

Thursday, January 1, 2009
filed under: Marketing/Risk Management

By John Sandbakken
Marketing Director / National Sunflower Assn.

Revenue Assurance (RA) crop insurance will be available to sunflower producers in Montana, Wyoming, Nebraska and Texas in 2009. All counties in these states that currently offer multi-peril crop insurance will now have RA as an option as well.

RA offers producers the opportunity to work with their local crop insurance agent to establish a benchmark revenue guarantee before the crop is planted. It gives producers the assurance that if market prices fall and or their production is below their approved yield, they will receive compensation for these losses.

Tim DeKrey, chairman of the National Sunflower Association Board of Directors, says the board made expanding RA for sunflower a top priority this past year. “The board and staff spent a lot of time on this issue, and we were very pleased to recently learn that sunflower RA will be expanded to other states,” DeKrey remarks.

Revenue Assurance coverage for sunflower also will be available in the following states in 2009: Colorado, Kansas, Minnesota, North Dakota and South Dakota. “With the increased popularity of revenue-based crop insurance products, having RA gives sunflower producers additional flexibility and greater security,” DeKrey notes.

Unlike the APH (Actual Production History) policy, RA coverage offers additional protection for price fluctuations during the crop year. “Given the wild market swings of the past year, having RA crop insurance for my sunflower allows me to sleep at night” DeKrey remarks.

RA provides dollar-denominated coverage by the producer selecting a dollar amount of target revenue, defined by a selected percentage within a certain range of expected revenue. The projected price (spring price) is based on the average December futures soybean oil price traded at the Chicago Board of Trade, divided by 2 and adding 1 during the month of February. The fall harvest price uses the same contract and formula during the month of October. As an example, if the CBoT October contract in February averages $32.00, the RA price guarantee for sunflower would be $17.00.

In addition, confection sunflower receives an upward price adjustment in relation to oil sunflower to compensate for higher confection values. RMA calculates an upward adjustment based on the (oil-type) price as determined above, plus an adjustment as determined by RMA based on the difference between the USDA estimate available in January for the next harvest year of confection and oil-type season average prices.

For example, if the estimated season-average price for confections was $20.00/cwt and season-average price for oil types was $17.00, the adjustment for confections would be $3.00/cwt. So if the announced RA price for oils was $17.00, the actual RA price for confections would then be $20.00.

RA also offers a fall harvest price option, which is designed to provide additional assurance to those producers who market their crop before harvest. Having the fall harvest price option allows the insured to use the greater of the harvest price or the projected price to determine the revenue guarantee after harvest.

Price Elections for Multi-Peril Announced

Price elections for multi-peril (APH) crop insurance in 2009 are $20.35 for oil-type sunflower, and $23.35 for confection. That represents a decrease of $5.75/cwt from last year’s level for oil-type, and $5.25 for confection compared to 2008.

Soybeans can be insured at $9.90/bu, which is a decrease of $1.60 from last year’s coverage level. The canola price election was decreased by $4.37/cwt to $19.86/cwt from last year’s price of $24.23. Spring wheat price election decreased from $9.25/bu in 2008 to $6.70 in 2009.

Insurance coverage for Sclerotinia and dark roast is again available for confection sunflower. Better Sclerotinia and dark roast coverage was granted by the RMA several years ago, at the urging of the NSA. DeKrey is very complimentary of RMA officials. “They really worked with us,” he says. “It was clear that insurance coverage was needed for these quality factors in confections in some production years. They (RMA officials) listened to us and made the change.”

Sclerotinia levels at 1.1% or higher in confection sunflower are eligible for quality adjustment. Quality adjustment for dark roast begins at 1.0% for confection 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.

NSA Funds Planting Date Study in South Dakota

The National Sunflower Association is funding a three-year study to look at pushing back the final planting dates for crop insurance purposes by five days in South Dakota. Currently, the final planting dates are June 10 in northern and western counties of the state and June 15 for the rest of South Dakota.

“We are in the second year of the research,” says Tom Young, NSA vice president and farmer from Onida, S.D. “Many growers have found that mid-June planting in central South Dakota gives us the best yield results, and we are hoping that RMA planting dates can mirror what is going on in the field.”

If the combined three-year research results look promising, NSA plans to ask RMA to make the change in planting dates in time for the 2010 crop year. Should the final planting dates be changed in South Dakota, it will be easier to adjust dates in bordering states in the future if needed.

Maps of final planting dates 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 click on “Crop Insurance.” The final planting date as listed on the maps is the last day that you can plant the crop and still get full coverage. After that 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.
return to top of page

   More about Sunflower ►