Multi Peril Protection

Be Confident in your 2013 Profitability!

Empty Grain Bins but Not Empty Pockets
If you are like me, you probably experience a degree of natural fear when exposed to heights, especially if there is little or no protection. After more than 30 years on the farm, I look no farther than the grain bin for this glaring example. In the fall, as harvest preparation is occurring, the one job that I hate doing is opening up the lids on the grain bins in preparation of filling them. Grain bins on our family farm have always been used to gauge how successful the crop year was. The hope was always to have more grain than storage because that would be a sign that the year was a success.

Over the last 2 years, we have begun to look at the grain bins in a different manner. With the challenges that have been faced in many regions, sub-par crops have led to empty grain bins. While the Corn Belt has produced 3 sub-par crops relative to the trend, on-farm incomes have continued to increase; even in the face of having grain bins that were short from being full. The one key component in this has been risk
management strategies that growers have utilized to protect revenue on their farms.

There are many ways that your crop insurance policies can work for you. The key in getting policies to work for you and your farm starts with how you look at using them. Most think about crop insurance only as a tool to protect income if the crop is damaged. We saw a significant need for crop insurance to serve in that role this past season. Some also rely on crop insurance as a way to protect from fluctuating market prices. How do you work marketing into this? Crop insurance allows you to market your crop to your level of coverage and take advantage of pricing opportunities that come before the bins are filled. The key component in doing this is to know your long term break evens. This number includes not only production costs, but short and long term debt, family living expenses, and profit. When you know your break even with profit built in at the levels you have insured your crop, it’s easy to be proactive with your marketing plan and take the emotion out of pricing your bushels.
In 2013, the greatest return on investment could very well be your election of policies for your farm. The decisions are not easy and must be tailored to your operation as they can equate to hundreds of thousands of dollars, both gained and lost. Do you have a risk management strategy for this growing season and are you going to use the tools before you fill your grain bins for 2013 prior to planting the crop? With the proper use of MPCI (Multi-Peril Crop Insurance) and additional specialty products, this year will be a great year for your operation. As MPCI is about to set its base revenue for the season, we will most likely have the opportunity to guarantee a break-even, or possibly a

marginal profit for your operation. In our diagram we picture a grain bin. If estimating break-even to be around $850/ac, with an average APH yield of 180bu/ac, the marketing break-even would be $4.72/bu. Dec. 2013 corn is trading around $5.75/bu., over a dollar per bushel profitability. What level of insurance are you thinking of taking to guarantee yourself a profitable year?
Historically, we purchase MPCI in March and do not think about it until after harvest and say to ourselves, “I’m sure glad we didn’t need that product again.” When I look at the last 20 years, the all-time high spring price was $6.01 in 2011, followed by $5.68 in 2012. Assuming our markets hold in the $5.75 range, we are able to assure a profit for your farm. In these same 20 years, 70% of the time the market price is lower by fall. With the revenue protection product, we are guaranteed a set revenue price so our down side risk is minimized.
The crop insurance deadline is fast approaching, with only a little over a month before the March 15th deadline. Farmers across the Corn Belt are still dealing with the emotions from last year’s harvest and growing season. We know that 2012 was a tough year, one that we can hopefully reminisce about in the future and not see repeated. At Corn Capital Innovations, our main concern for farmers is this: get your crop insurance set up so that you know what your bottom line protection is. Also, make sure you know what your protected bushels per acre are, and then you will know what your guarantees are. This will all result in the fact that if or when there is a market rally, you can act on it and not have to worry about overselling your guaranteed bushels versus your yield expectations.
Here at CCI, we take a look at the revenue products that are available and slot them into a policy selection matrix to make sure that we’re making the best recommendation for your operation. The policy section matrix is a tool developed by Water Street Solutions to provide the best risk management plan for your operation. We do realize that each operation is different in terms of complexity. That is why we are excited to sit down with each operation and determine an individualized risk management plan that will access what unit structure to take, what coverage levels to take, and what other products are available and should be considered for your overall risk.

Top Questions and Concerns About Crop Insurance and the Answers You Need

Every year around this time we review and plan our crop insurance needs for the March 15th deadline.  It’s important to know and understand how history, trends and other factors can influence the planning process.    Here are a few of the top questions and concerns you may be asking as you prepare for 2013.

Questions that are arising from 2012:

  1. What will the drought with the high number of payouts do to my premiums?

Crop insurance is not the same as auto insurance and claims paid out will not automatically raise your premium.  It is county and state rated over a 25-year period.  In fact expect 2013 to be about the same as 2012 or it may even decrease slightly

  1. How will the Farm Bill and Government affect insurance?

By January 1st the bill was already intact so no changes are expected.  In fact expect it to be intact until 2014.

Seasonal Market Trends

Trends follow three peaks: Spring, Summer and Fall.  “Crop year 2013 is like 2012 on steroids” says Deb with Water Street Solutions (LINK).  “No two years are alike, even if you have the same weather, you will not get the same results (agronomically speaking).”  What influences markets?

  • SPRING = Acres in the ground, supply and demand, conditions
  • SUMMER = Heat stress, weather, drought
  • FALL = Price drops or price increases

Crop Insurance – Crop Protection

You will need to decide how many bushels you are willing to invest, to insure your entire crop.


  • Revenue Protection
  • Production Protection
  • Named Peril Insurance, more than just hail coverage it can include fire, lightning, vandalism etc.
  • Add endorsement to cover additional, such as green bend or green crimp & greensnap with extra harvest expense

When we are going into a higher commodity price in the Spring, we recommend higher coverage.  We would welcome the opportunity to sit with you individually and base your coverage on your specific farm and your needs.

Don’t forget the deadline is March 15th so give us a call today at 320-523-2252 and we can help you get the protection you need for your peace of mind.

The Higher the Clouds, the Finer the Weather

Weather is not just a random thing that happens.  As a farmer, many of you are used to checking the forecast and looking out the window to see what the day will bring. Last year proved to be more difficult than that, as few of us had the opportunity to do any singing in the rain in 2012. We are hopeful that 2013 will bring more moisture to replenish our soils. However, with a goal of 300 BU corn, it is vital that we do more than hope for perfect weather.  We need to use all of the tools available to protect above our APHs. With new innovative insurance products that have been introduced to crop insurance, we now have the ability to cover the gap between our multi-peril coverage and your expected yields. As you’re looking for ways to manage risk going into the upcoming growing season, we recommend taking a look at the innovative product called Total Weather Insurance from Climate Corporation.

With the opportunity to use Total Weather Insurance (TWI), we are able to be more data driven to cover what growers are actually producing. To be fully prepared, we can’t gamble that Mother Nature will take care of the crop that we put out there.  We need to protect ourselves and we are now able to be more financially responsible by using sophisticated data to protect the full potential of the crop. Weather continues to serve as a great metaphor to each growing season- “Sometimes it’s good, sometimes it’s bad, and there’s nothing much you can do about it but carry an umbrella.”  Crop insurance serves as the umbrella over our heads to keep us from getting caught in a situation without the right protection.

TWI monitors weather risks, such as heat stress, excess moisture, drought, or early freezes.  Since TWI is triggered on pre-defined weather risks and not yields losses, there is no need to work with an adjuster, which means audits by the insurance company are eliminated. As a grower, you can customize your coverage by soil types and seed varieties. Your payments are then generated from events that limit your yield.

What we are hearing consistently is that more weather extremes are in our near future.  It’s important, that as a grower, you make your one paycheck for next year count for all its worth.  We work with farmers to cover what they are trying to produce, not just purchase any policy. TWI is a great way to do that! Input costs are high and there is potential that land values will continue to increase, so a solid plan is necessary from a risk management perspective to ensure your operation’s profitably. Corn Capital Innovations is excited to take an advanced look at risk management for your operation.

As smart phones get smarter and our lives become more dependent on our cell phones, TWI works well with growers to provide real time information and immediate updates on the progress throughout the growing season. TWI can’t be purchased with just any agency, so call the Corn Capital Innovations Crop Insurance Team at 320-523-2252 to build an individual risk management plan that’s right for you.

Crop Insurance for the Perils that Affect Top Yield

Corn Capital Innovations offers a full service of Crop Insurance products that cover many of the perils that affect top yield potential while providing you and your family peace-of-mind.

The weather is any one’s guess and having the correct insurance will certainly help to manage the risk that farmers take each and every year.

Crop Hail Insurance offers several options:

  • All or a portion of your crop acres can be insured. You decide how much risk that you want to handle and then we write the policy to manage that risk.
  • Crops can be insured at any time up to a specific harvest date.
  • Protection for loss due to fire or loss in transportation is available.
  • Additional coverage is available to protect your revenue, profit or to cover costs when you are faced with the need to replant when these benefits are not protected by multi-peril crop insurance.

Actual Production History (APH) coverage is available based on your yield history.  We will work with you to set a comfortable level that best fits your family’s goal.

With Yield Protection (YP) we can insure that you receive replacement income when your crop yield does not achieve a previously specific level, due to many different perils.  These policies are available on varying levels.

Both APH and YP plans are yield-based policies.  These policies are offered to protect you due to natural causes such as wind, hail, frost, drought and flooding.  These policies can be written to include the damage from infestation from either disease or insect.

Each policy listed above must be scripted to list each specific crop.  Coverage’s are paid only when or if production falls below the prearranged production that we will establish in the Spring.

Revenue Protection (RP) and Revenue Protection with Harvest Price Exclusion (RP/HPE) policies offer revenue protection based on both your actual yield and grain market price potential.  Either plan will combine your production history with current grain market price to establish the revenue protection.  RP plan does allow for fluctuation in market prices and will be based on the actual price in effect in the Fall.  The RP/HPE excludes the Fall market price aspect and limits the revenue guarantee to what was established in the Spring.  Both plans protect against lost revenue affected by low market prices, low yields, or a combination of both.

Corn Capital Innovations is here to help you make the best choices possible.  We understand what you are going through, because we have been there too.

Let us help you determine the next steps in protecting your crop.  Contact us today!