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Insuring Sunflower: Updates for 2019

Friday, January 25, 2019
filed under: Marketing/Risk Management

       With volatile markets and Mother Nature having gone berserk in recent years, would you ever think of going without crop insurance to help cover your risk? I don’t think so.  Crop insurance is purchased by most agricultural producers to protect themselves against either the loss of their crops due to natural disasters, or the loss of revenue due to declines in the prices of agricultural commodities.  Producers in the Northern Plains states gained firsthand experience on the value of having crop insurance in the 2017 growing season as drought conditions trimmed yields and reduced return per acre.  Having crop insurance allows you to sleep better at night knowing you have some protection from the factors outside of your control. 
       Crop insurance for sunflower is available in 308 counties in the Dakotas, Minnesota, Texas, Oklahoma, Kansas, Nebraska, Montana, Wyoming and Colorado.  If crop insurance for sunflower is not available in your county, have your crop insurance agent check into obtaining a written agreement at the USDA Risk Management Agency (RMA) regional office that covers your state. RMA has 10 regional offices in various locations across the country that you may contact for information specific to your area. Click here for a link.  A written agreement is a document designed to provide crop insurance for insurable crops when coverage or rates are unavailable in a particular county.
       When insuring sunflower, you have three crop insurance choices: Yield Protection, Revenue Protection or Revenue Protection with Harvest Price Exclusion.  The “Basic Provisions” are the same for all crops and all policies, making paper work much simpler to digest.  Revenue and yield policies have the same (minimum) starting price and are based on December soy oil prices traded on the Chicago Board of Trade during February and October. 
       If you are interested in following spring and fall price information for all crops covered by crop insurance, click here, then click on “Your Price” or “Many Prices.”  It will allow you to see how prices are tracking. 

So, What’s New for 2019? 
       At the national level, there are several changes that will impact sunflower producers for the 2019 year. For the 2019 crop year, RMA conducted actuarial reviews for sunflower on T-yields, rates, reference yields, a crop program review and final plant date review.  Also, some changes have been made to quality adjustment tables for sunflower. 
       Nationally, T-yields, on average, have increased.  County policy data show T-yields for oils, on average, still tend to be higher than confection T-yields.  However, confection T-yields are increasing and have reduced the gap between oil and confection T-yields. Specific county changes can be found on the RMA Information Browser.

Final Planting Dates Change in North Dakota
       The National Sunflower Association requested, and the USDA Risk Management Agency approved, a change to the final planting date in North Dakota counties for sunflower for the 2019 crop season.  North Dakota counties that had a June 5 final planting date will now be June 10, and counties that had a June 10 final planting date will be June 15. 
       The late planting period will begin the day after the final planting date for the insured crop and end 20 days after the final planting date.  The entire planting time frame will be the same, just the adjustments within it are changing.  
       This change aligns North Dakota counties with final planting dates in neighboring states and gives producers five more days of full insurance coverage. See Figure #1 for the date change for your county. 

Late Planting Period Change in Colorado
         In 2019, 10 counties in Colorado will have a change to the end date for the late planting period. The late planting period will increase from 20 days to 25 days, giving producers in these counties five additional days to plant the crop and still obtain insurance coverage.  This should be helpful in years when there is a tight planting window due to weather related conditions. Check out Figure #2 for this year’s High?Plains end of late planting period dates. 

         NSA offers maps of final planting dates for the Dakotas, Minnesota, Texas, Oklahoma, Kansas, Nebraska, Montana, Wyoming and Colorado.  The maps are on the NSA website. Go to the “growers” link, then “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.   

         Here are some other things you should consider when sitting down with your local crop insurance agent when making decisions on how to insure this year’s crop:
Supplemental Coverage Option (SCO)  
         The Supplemental Coverage Option (SCO) will be available to sunflower producers in most counties in 2019.  SCO is an area-based policy endorsement that can be purchased to supplement an underlying crop insurance policy.  It covers a portion of losses not covered by the underlying policy.  SCO will be available on a county-wide level or on the basis of a larger area in counties that lack sufficient data.  SCO indemnities will be triggered if losses in the area exceed 14% of expected levels, with SCO coverage not to exceed the difference between 86% and the coverage level selected by the  
producer for the underlying policy.  
         Click here for an interactive map that allows you to see which counties have SCO for 2019.
Trend-Adjusted APH  
         Trend-Adjusted APH will give you some options when buying crop insurance in 2019. If the same percent guarantee is chosen, the dollar value of coverage will be increased and the premium you pay will be slightly higher.   
         As an alternative, you can elect a lower percent guarantee for approximately the same dollars of coverage. The total premium would be the same as before, but your share of the premium would be smaller because the percent subsidy from the USDA is higher for lower percent guarantee levels. 
         The Trend-Adjusted APH is available for either yield protection or revenue protection policies, at all levels of guarantee except catastrophic (CAT) coverage (50% yield guarantee).  The Trend-Adjusted APH election must be made by the insured producer by the sales closing date each year, which is March 15 for sunflower in the eligible counties. 
Actual Production History Yield Exclusion (YE) 
         Under this program, yields can be excluded from your APH when the county average yield for that crop year is at least 50% below the 10 previous consecutive crop years’ average yield.  The YE allows eligible producers who have been hit with severe weather, including drought, to receive a higher approved yield on their insurance policies through the federal crop insurance program.   
        Click here for an interactive map indicating which counties have YE.  
         When formulating your crop insurance plan for 2019, you’ll have to crunch the numbers to see what the best risk management plan for your operation is. given current prices.   
         The best advice is to sit down with your local crop insurance agent. Your agent can describe the different insurance products available, and the policy rates and terms.  He or she will help you choose the best coverage for your crop based on your particular farm operation and your risk management and budgetary needs.            
* John Sandbakken is executive director of the National Sunflower Association. 
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