SPRING 2006 NEWSLETTER

 


ACREAGE REPORTS DUE JUNE 30TH

Enclosed, you will find a copy of your 2006 crop year acreage report for Spring-planted crops.  Please note that all acreage reports are due for Tobacco, Soybeans, Corn and Grain Sorghum by June 30th (other than tobacco in VA due July 15th).  Please notice the back of the acreage reporting form for instructions as to filling out the form.  In the event that FSA changes their reporting deadline to a date later than June 30th, the crop insurance program doesn’t allow us to extend our reporting deadline.  It is imperative that you report to us timely.  In fact, if you will report to us early, you will have time to make any needed changes.   

 

Please be aware that we cannot change acres after the acreage reporting deadline unless there is a clear case of a typographical error.  It is extremely important that we get the acreage report correct prior to the deadline.  We suggest that you turn in acres at FSA prior to turning them in with us so that you are sure that the farm numbers, share and acres are correct prior to reporting to us.

 

REPORT NEW FARM SERIAL NUMBERS

If you have new farm serial numbers due to the removal of a combination farm serial number or due to combination of farms, please make sure that we are aware of the correct farm serial numbers at the earliest possible date that you know the new farm numbers.  It is also very beneficial for us to know the farm names for all farm numbers that you tend.  The farm name is often the landowner’s name but it can also be the name that you commonly use for the farm such as “Home Farm”.

 

PENALTY FOR INCORRECT ACREAGE REPORT

There is a penalty that will be assessed on any claim where the acreage is over reported or under reported by greater than 10%.  The penalty will be a percentage equal to the amount in excess of 10% that your acreage report is in error. 

 

MEASUREMENT SERVICES AVAILABLE

As in the past, measurement services are available through FSA.  You are not required to have your land measured for any insured crop.  However, if you want the peace of mind of knowing that your acreage is correct, you can elect to have your acreage measured.  If you want to have your acreage measured privately, you may do so.  John Eagle offers one private measurement service.  John can be reached at (434) 836-6924 (located in Danville, VA).   You may know of another measurement service closer to you.  If so, you can use any private measurement service.  If you request measurement and the measurement isn’t completed by the acreage reporting deadline, you can submit estimated acreage and we can correct the acreage to correspond to the measurement service within 45 days of the acreage reporting deadline or prior to a claim being reported, whichever comes first.  If your acreage is to be measured, be sure to write “Estimated acreage awaiting measurement service” on your acreage report.

 

WHEAT PREMIUMS DUE JULY 1, 2006

If you have a wheat crop insured in 2006, you will be billed shortly for the premium.  The due date on wheat premiums is July 1, 2006.  If you have a wheat premium due, it is due regardless of whether you have a wheat claim filed or not.  If you have a claim in progress, you can expect the premium to be deducted from the claim if it hasn’t already been paid.

 

WHEAT ACREAGE DISCREPANCIES

By now, you should have reported your wheat acreage to FSA.  Be sure that your acres are reported to FSA the same way that they were reported to us for your crop insurance.  This will make claims handling much smoother.

 

REPORT WHEAT CLAIMS EARLY

If you suspect a loss on your wheat crop, be sure to file a claim as soon as possible.  It is always best to file a claim early, even when you aren't sure whether you have a loss or not.  If you are cutting your wheat for hay, be sure to turn in a loss even if the wheat looks good.  We don’t have a method of converting bales or tons of hay to bushels.  An appraisal of your wheat will be necessary for purposes of plugging in a production figure for the 2006 crop.

 

DOUBLE CROPPING ISSUES

Losses payable on cropland that is double cropped can be affected if a producer doesn’t have double cropping history.  If inadequate double cropping history exists for a producer, losses and premiums on the first crop are reduced to 35% of the normal amounts.  Keep this in mind if you have a wheat loss that is being worked.

 

CHANGES IN THE TOBACCO PROGRAM

If you insure tobacco with an MPCI policy with us, we’ve been working hard to establish production databases for farms on which you’ve planted in recent years.  In the past, each farm in the county carried the same yield and coverage for a given farmer.  Each farm now carries separate yields and therefore separate coverage. 

 

It is extremely important that you make us aware of any farm number(s) on which you plan to raise tobacco in the future.  This year is the last year that we can make use of the FSA collected data that has been used to establish your tobacco yield.  For those that have worked hard to establish a favorable yield, it is important that we assign that yield to each of your farms on which you will raise tobacco now or in the future.  After the 2006 acreage reporting season, we will not be able to use the FSA data again in the future.

 

The price election for flue-cured tobacco is $1.35 again this year.  Government subsidy will not change.  Therefore, you can expect premiums to be roughly the same as in 2005 on a per acre basis.  

 

2006 TOBACCO CROP-HAIL PROGRAM

The crop hail program for tobacco remains relatively unchanged in Virginia and North Carolina for the 2006 crop year.  Rates remain the same for wind and hail as they were in 2005.  The limit of coverage was $2,500 per acre in 2005 and is $3,000 per acre for 2006.

 

As always, the biggest bang for the buck appears to be in Federal Crop Insurance with crop-hail being a way to round out your coverage if you so choose.

 

CROP-HAIL REPLANT COVERAGE

If you had a crop-hail policy in 2005 with RCIS or if you have already written hail insurance this year, you are covered for replants until May 31st, 2006 at the same level as your coverage existed in 2005.  The amount of replant coverage is 3% of the dollar coverage per acre if you have a 10% deductible hail policy.  Correspondingly, if you have a 5% deductible, your replant coverage is 4% of your dollar coverage.  You have 5% of your dollar coverage available for replant if you have 0% deductible hail insurance.  For example, if you have XS5 hail insurance and you have $1,500 per acre of coverage, your replant coverage is 4% x $1,500 = $60 per acre.

 

To collect on a replant claim, you will need to show that the damage was due to a hail storm and that you incurred expenses in replanting up to the amount of coverage that you have.  A claim can only be paid up to your incurred cost.

 

AUTOCROP CROP-HAIL CAN BENEFIT YOU

RCIS has an endorsement to the crop-hail policy named “Autocrop”.  This endorsement makes the crop-hail policy continuous much like the MPCI (federal crop insurance) policy.  The cut-off date for autocrop each year is May 31st.  The best thing about autocrop is that you don’t have to worry about getting together with your agent each year after planting.  Most often, the coverage can be reviewed by phone and a decision can be made to get together if you desire changes to your crop-hail insurance.

 

Already this season, there have been hail storms in Guilford, Caswell and Person Counties that have been severe.  Those autocrop policyholders that were affected were confident of their replant coverage as the hail fell.

 

HELP US HELP YOU WITH YIELD TRACKING

As you sell your 2006 crop of wheat, tobacco, soybeans or corn; please be sure to write the farm serial number on which the crop was grown on the sales ticket.  This type of record keeping is needed for tracking production in the event of a loss or even for establishing yields when there is not a loss.

 

For crops that are not harvested for whatever reason, be sure to file a claim so an adjuster can appraise production, even if you don't expect a low enough yield for us to pay a loss to you.  Any insured crop that is cut for hay should also be appraised to determine yield.

 

Any corn harvested as silage should also be appraised unless you are sure that you will not have a loss.  In that case, you should tally silage loads as you cut the corn and the tonnage can then be converted to bushels.  You should weigh at least a couple of loads of silage on each wagon or truck that is being used so that the total tonnage can be calculated.

 

FORWARD PRICING CAN BE A GOOD IDEA

Currently, there are plenty of opportunities for forward pricing your grain crops.  Please keep this marketing strategy in mind to get the most that you can for your crop.  Some futures prices that exist at the time of writing this newsletter are as follows:

 

Soybeans:                Nov 2006,             $6.32/bu.

Corn:         Dec 2006     $2.81/bu.

Wheat:       July 2006,      $4.01/bu.

 

You may wish to consider booking much of your crop now rather than waiting to see where the market is at harvest.  Remember that if you have a revenue crop insurance policy, the policy is designed to work with your forward pricing efforts.  Generally speaking, you can safely forward contract your crop insurance guarantee and have adequate protection in the event that you don’t make the crop to meet your contract.

 

DCP SIGN-UP AT FSA

The deadline to sign-up your grain cropland for the DCP payment is June 1, 2006.  Don’t miss out on this payment from FSA.  It takes playing all of the angles to make a profit growing grain.  The DCP and LDP payments on your grain crops are simply other ways of making grain production profitable.  If we can help with your DCP sign-up by providing production records that you have given us in the past, give us a call.

 

PRICE ELECTIONS FOR 2006 CROPS

Following are the price elections that have been announced for the 2006 crops.  These are the prices that will be paid by crop insurance in the event of a loss. 

 

Apples, Fresh Market, APH, bu.                        $  8.05

Barley, APH, bu.                                                   $  1.85

Cabbage, APH, cwt                                             $  6.75

Corn, APH, bu.                                                     $  2.00

Corn, CRC & RA in VA, bu.                                $  2.59

Corn, CRC in NC, bu.                                         $  2.38

Corn, RA in NC, bu                                              $  2.57

Grain Sorghum, APH, bu.                                  $  1.95

Oats, APH, bu.                                                      $  1.35

Peaches, Fresh Market, bu.                              $11.75

Soybeans, APH, bu.                                            $  5.15

Soybeans, CRC, VA, bu.                                    $  6.18

Soybeans, CRC, NC, bu                                    $  6.25

Soybeans, RA, NC, bu                                        $  6.18

Tobacco, Burley, APH, lb.                                   $  1.80

Tobacco, Flue-Cured, APH, lb.                         $  1.35

Wheat, APH, bu.                                                   $  3.15

Wheat, CRC, VA and NC, bu.                            $  3.50

 

AS ALWAYS, WE GREATLY APPRECIATE YOUR BUSINESS!


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