CROP INSURANCE IN ACTION: Klodette and Rich Stroh, Powell, Wyoming

Klodette Stroh isn’t your typical Wyoming farm girl.

Klodette Stroh individual photoKlodette is an Assyrian, born in Teheran, Iran, who came to the U.S. to attend college with the goal of becoming a physician and instead wound up falling in love with Wyoming farmer, Rick Stroh.

The couple began farming together in 1989, first purchasing some equipment and leasing land, all while hoping to one day own a farm of their own. After years of hard work, the couple finally achieved a hard-fought dream and purchased their own farmland. Today, the couple, and their two sons Rick and Paul, farm nearly 1,800 acres of malt barley, wheat, varieties of dry edible beans, corn and hay, near Powell, Wyoming. They also tend to more than 50 head of cattle.

While things on their farm and in their lives have changed, one thing has always stayed the same: The Strohs have always purchased crop insurance. “We buy crop insurance mainly to safeguard from bad weather,” said Klodette Stroh. “Last year we had four major hail storms in a row,” said Stroh.

Stroh noted that although crop insurance is a yearly expense that isn’t easy on the pocketbook, they seldom have had a claim. Until 2013, that is.

“Last year was one of the worst year we have ever faced,” she noted. “After four back-to-back hail storms, the leaves of the dry edible bean plants were shattered, as were the sugar beets,” she said. “It was a real catastrophe throughout this part of the state and farmers were hurting.”

Thankfully, most of Wyoming’s cropland farmers purchase crop insurance, which last year protected roughly 90 percent of planted cropland in the U.S. “We made our first claim on our crop insurance policy last year and I hope we never make another claim,” she said. “But if we need to rely on our crop insurance again, it’s nice to know that the policy will be there to help us get back on our feet,” she said.

Stroh said that in addition to offering farmers some peace of mind, purchasing crop insurance is also something that bankers prefer. “Bankers like to know that if you lose everything, something will be coming back to them,” she said.

“Most of the farmers around here purchase crop insurance as part of their basic risk management plans,” she explained. Stroh noted that farmers pushed hard for crop insurance to become the centerpiece of farm risk management in the 2014 Farm Bill. “It just makes good sense for farmers to purchase the protection they need,” she said.

Stroh also noted that the Farm Bill should be called the People’s bill. “That’s really what is it, because it not only helps farmers, but it feeds our children, feeds the poor and keeps the nation running,” she added, “since farmers not only raise food, but fiber and fuel for the nation and the world.”

Stroh Dad and sonsStroh noted that it is important that crop insurance remains universally available, affordable and viable for farmers. “Farmers are major economic drivers of our economy, and crop insurance ensures that if disaster strikes, they have a clear pathway to recovery.”

“The cost of farming is so high that if we don’t have some kind of backstop — like crop insurance — it would be impossible for many of us to get back on our feet after disaster strikes,” she added.

“I don’t want our country to ever need to import our food from other countries. That will cost us our independence,” she said.

CROP INSURANCE IN ACTION: Jon Whatley, Odem, Texas

Many farmers in the United States have been wedded to the soil for several generations. Jon Whatley is no different.

He is a fourth-generation farmer in San Patricio County, outside Odem, Texas, and has been tilling the land since 1993. Whatley plants mainly cotton, corn and sorghum in the coastal bend of Texas on more than 5,000 acres and about 100 head of cows.

Odem is a town founded slightly more than 100 years ago at the junction of two railroads and was named it after the county sheriff, David Odem. The area used to grow vegetables, but the current top crops of cotton, corn and sorghum became dominant by the 1980s.

Whatley believes strongly that a coherent Farm Bill is essential for the American farming sector and that people sometimes do not understand that farmers are in a line of work where a lot of things can go wrong – from withering drought to hurricanes wrecking crops through floods and high wind.

“Farming is a very risky business with many aspects that are out of the control of producers,” he said. “A Farm Bill should help provide some stability for the producer and the consumer. I don’t believe a Farm Bill should create an absence of risk. A bill that helps bring a sense of safety for the producer and the agriculture community is vital for long-term health for ag and ag businesses. Food security and abundance is a result of sound farm policy,” Whatley explained.

One of the vital components of the Farm Bill is a crop insurance program where farmers purchase policies to protect them from catastrophic loss.

“It is necessary and is required by my lender,” said Whatley.

Since becoming a farmer in 1993, Whatley has relied on crop insurance for the bad times, filing in six different years.

That would include 2011 when Texas experienced the worst drought in a century hit Texas and continued into 2013. The prolonged drought caused extensive damage to Texas’ cotton crop, of which Texas is the biggest producer in the U.S.

Whatley feels that some Americans have “distorted the facts” on how farmers are supported and how they operate.

“We as producers have a very complicated business model to explain in short talking points. We need to find ways to easily explain our value to the general public. I believe Americans would support what ag does if they could understand the industry and the impact it has on the economy and their lives,” he said.

Whatley said it is necessary to look at what the farming community brings to the table when it comes to its contribution to American life. “The value of farming on American life can be measured in many ways,” he said. “We cannot all live in metropolitan areas.”

Farming in rural areas provides the backbone for the economy in those areas and is the foundation for local governments “such as police, roads and the education system to name a few,” Whatley explained.

There is also the big picture responsibility that American farmers have for feeding not only the country but in serving as a global granary of last resort if there are shortages elsewhere. Bottom line, the Farm Bill and provisions like crop insurance is a guarantor of the stability of food supplies and the rural economy in the United States.

“Without a policy that stabilizes farms and commodity markets, the volatility would be devastating to the consumer,” Whatley said, adding the absence of the bill would lend itself “to unsafe and unreliable food delivery.”

CROP INSURANCE IN ACTION: Mike Quinn, Garner, North Carolina

Mike Quinn.jpgIf there’s anything the droughts of 2011 and 2012 have taught American farmers, it’s the importance of being prepared for anything.

That includes occasional years of dealing with dry conditions trying to grow the Carolinas’ homegrown cotton crop.

J. Michael Quinn, the president and CEO of Carolinas Cotton Growers Cooperative, Inc., has witnessed how both droughts and hurricanes can wreak havoc on farms and cause lost income for farmers.

What is important is how such risks are mitigated now that farmer-members have turned to crop insurance coverage for protection.

“Crop losses will occur from time to time,” he noted, adding “these losses would be devastating to private underwriting and cost prohibitive without a public/private partnership to underwrite and deliver the appropriate protection.”

He maintained the widespread crop losses of 2011 and 2012 due to drought are a “clear reminder of the need for crop insurance protection.”

The farmers who are members of the cooperative have also had to deal with the terrible destruction of hurricanes, which seem to strike the Carolinas like clockwork.

In 1999, Hurricane Floyd dumped so much rain and caused such heavy destruction and flooding in the Carolinas — which had suffered from Hurricane Dennis just weeks before — that the World Meteorological Organization has retired the name.

In all this devastation, which could very well have bankrupted many farmers, those who had purchased crop insurance were able to roll with the punches and come back the following year.

“Crop insurance is very vital in a farmer’s overall risk management strategy,” said Quinn.

Crop insurance and the marketing loans are major provisions in the Farm Bill, and play an important role in cooperative marketing. He said the marketing loan program has allowed cooperatives like Carolinas Cotton Growers Cooperative “to facilitate loans on behalf of the producer while the crop is being marketed.” Crop insurance is a risk management tool the growers can customize to their individual needs, he added.

The 91-year-old cooperative, headquartered in Garner, North Carolina, provides marketing services by connecting members to textile customers around the world. The cooperative manages the logistics of moving the members’ cotton in the world supply chain in an efficient manner and provides the latest tools for members to hedge risks inherent in production agriculture.

“The nature and volatility of agricultural production necessitates the need for an adequate safety net for producers who take substantial risk in producing crops,” said Quinn.

A solid Farm Bill, he said, gives agricultural lenders a “certain degree of confidence in terms of multi-year lending of agricultural production and ensures a certain measure of food and fiber security.” A well-crafted farm bill is as important to American farmers as it is to American citizens, he said.

Crop insurance is a program that ensures that farmers who suffer possibly catastrophic losses from droughts and floods can survive and stay in business. The risk management tool provides coverage to over one hundred crops, and offers producers a variety of options to choose from depending on how much they are willing to spend and their tolerance for risk.

CROP INSURANCE IN ACTION: Danny Davis, Elk City, Oklahoma

Late in the 19th century, the Great Western Cattle Trail used to run from Texas to Dodge City, Kansas. The route passed directly over a creek that eventually became the center of Elk City, Oklahoma. This is a region of dry land farms and ranches. Two years ago, it was the epicenter of the worst drought in a century to strike the region.

Danny Davis farms around 1,700 acres of cotton near Elk City and about 200 to 400 acres of rye for grain. He also runs a small commercial cowherd. He has been farming for more than 41 years.

For him, crop insurance has become an essential tool in surviving the wild swings in weather on the farm. “Crop insurance, in my opinion, is the only meaningful risk management tool available to us now,” said Davis.

Davis has purchased crop insurance every year since the early 1990s.

The first time he used it was during an August hailstorm in 1996, when “we lost all but about 200 acres of our cotton,” he said. “There is no doubt in my mind that hail storm would have been the end of our farming operation had it not been for crop insurance.”

“This was a very pivotal time in the history of our farm, we were still trying to recover from the three-year drought of 1980 to 1982, a devastating early freeze in ’87, and the ever tighter operating margins that surfaced in the mid-to late 80s, and has become the norm since,” Davis explained.

Texas-Oklahoma farmers, like farmers elsewhere, face many weather-related challenges. Planting time in the spring can be delayed by a lack of moisture, hail and windstorms can uproot the plants, and drought is an all too regular hazard.

Davis explained that in 2011, the dry spell reached into the record books. The worst in nearly a century hit the area, and it did not let up too much in 2012. “The current long-term drought we are in has hit us very hard the last two years, and crop insurance has come through not only for our farm, but our lenders, suppliers and our service providers.”

He said there is sometimes a giant misconception by some urbanites that farmers are on “easy street” because they can just plant and collect crop insurance.

“[There is] a near total disconnect with society in general from the land and this nostalgic idea of Granddad’s 40-acre farm, gathering eggs every morning, and green grass all year, and he doesn’t have a care in the world because he’s getting farm subsidies, has crop insurance and life is good,” Davis said.

For Davis, the idea of making sure crop insurance stays in the Farm Bill and is a vital part of farm policy is basic common sense. He strongly feels the idea of being “near self-sufficient” as possible is a key component in the country’s future.

One time, he was getting a haircut and a stranger “was going on and on about how good the farmers had it last year during the drought due to crop insurance settlements. He was one of those guys that knew it all and wouldn’t shut up.”

“Finally, I turned to him and asked what his house was worth and if it blew away or burned to the ground what he would expect from his insurance company. Bragging, he said around $250,000 and he had a full replacement policy so it didn’t really matter what it was insured for, because the insurance company would rebuild his house and rent him a place to live while his was being rebuilt.

“I then asked him what his premium was, and he said around $1,800 a year. Doing a little math in my head I said (that’s) less than 1 percent a year, and he agreed. Davis then asked him if he would be happy with insurance that made him eat the first 15 to 35 percent and cost him 6 to 14 percent of the total value of his house, and if the back bedroom was all that was lost and he didn’t receive a settlement if he’d be happy? ‘Why hell no’, he said.”

Davis showed the gentleman his insurance schedule and explained the math he was facing on his farm should disaster strike. He also explained that, in general, he pays the insurance company an entire crop’s worth of income every 7 to 8 years in premiums.

“The first words out of his mouth were ‘you’re crazy’,” Davis declared.

CROP INSURANCE IN ACTION: Andrew Bowman, Oneida, Illinois

Andrew BowmanAndrew Bowman is a fifth-generation farmer from Oneida, Illinois, in the western part of the state. Bowman, who is in the family business with his father, farms 1,100 acres of corn and soybeans, although they are also looking into new crops. “But corn and soybeans are definitely our bread and butter,” says Bowman.

The drought of 2012 was especially hard on the state of Illinois, with farmers there seeing some of the highest losses in the country. But there were a few counties in the western part of the state that escaped the worst of it. “In 2012, when everyone in Illinois was suffering under an incredible drought, we were in a garden spot,” said Bowman, who noted that while their yields were slightly down, the high commodity prices made up for it.

Bowman says that the worst year his farm has experienced in recent history was in 2005, which saw a very regionalized, yet extreme drought in western Illinois, with the rest of the Corn Belt being relatively unaffected. It was the first year since the drought of 1988 when farmers saw Spider Mites in their soybeans. Bowman notes that the low yields combined with the low prices that year was a double whammy for farmers in the drought area.

“Although farmers are optimists, I have to say that you couldn’t help but feel a little hopeless that year, because outside of this 10-county area, we knew that everyone else was doing quite well,” he said. “So we were not only facing low yields but low prices as well,” he said, adding, “I found myself looking to next year and praying for a better season.”

And that is just one of the reasons why Bowman is not only a farmer who purchases crop insurance every year, but one who sells it as well.

Bowman said that for him, crop insurance is peace of mind that yields rewards on a number of fronts. “Crop insurance is a marketing tool, a risk management tool, and working capital insurance.”

Bowman explained that crop insurance’s role as “working capital insurance” is one of the most critical, yet overlooked aspects of the policy. He said that in good years, farmers in other countries must bank much of their profits so they have reserves for the inevitable bad year, or years. “That money, sitting in the banks for years, does very little to increase the productive output of a farm, let alone generate jobs or wealth in the surrounding community,” he said.

By contrast, since U.S. farmers can purchase crop insurance to ensure that they have a backstop when disaster hits, they are able to reinvest their profits in their farms, in the community and in the rural economy. “Crop insurance allows me to wisely invest in my future, as well as the future of my community and local economy,” he said, noting that one in four jobs in Illinois are linked to agriculture

Bowman says that as a crop insurance agent, it’s relatively easy to sell a product that he personally believes in. “My dad has been an agent for quite some time,” he said. “I sell crop insurance because I believe in it, it’s a good risk management tool and it’s a wonderful example of a public private partnership,” he added.

Bowman noted that what Americans need to understand about supporting the farm sector is that farmers not only provide food security, but national security as well. “Supporting the ag sector not only supports the greater economy, but it has national security interests as well, in addition to helping promote a positive trade balance,” he said. “And let’s not forget that we also need to help feed the world.”

CROP INSURANCE IN ACTION: Matt Huie, Beeville, Texas

Matt HuieBee County in the coastal bend of Texas near the Gulf of Mexico was not spared the crippling drought which struck the state with the worst dry spell in almost a century in 2011 and continued for several years.

Matt Huie works on 5,000 acres of row crops plus a cow-calf operation there, and the headquarters of his operation is near Beeville, Texas. He has been farming the last 15 years since graduating from college.

For him, crop insurance has been invaluable. Huie calls it “the most vital risk management tool” in his quiver. “We always buy it, and have since we started,” said Huie.

“It’s required to secure loans in our area. Because of the severe drought in Texas, we have used it two of the last three years. Without it we would be out of business, along with two-thirds of the farmers in our area,” he said.

Huie explained that crop insurance enables farmers to survive disasters like searing drought or devastating floods so they can farm again the following year. The farmers pay premiums into the program so they can recoup some of their losses, which is a better alternative than ad hoc disaster aid that would have to pass through a Congress that is often stalemated by partisan debate.

Huie said crop insurance is “even more important to young farmers like us who are more leveraged” in providing collateral to keep their operations running.

He also disputed claims by some critics that farmers care more about collecting an insurance check than raising a crop. “If you have ever had an insurance claim on anything, be it a homeowners claim or an automobile, you know that it helps shield you from a catastrophic loss. But in reality, it’s (just) making the best of a bad situation,” he said.

Like other insurance policies, there is a deductible involved which is “usually 30 percent in our area,” he added.

Huie said he hopes people will understand the importance of the work farmers do, even in a society where most take for granted that safe, affordable food is readily available in their supermarkets.

“In a global market where competing nations recognize the strategic importance of maintaining a domestic agriculture industry, subsidies will continue to exist because there is no greater threat to a government than to have people that are hungry,” he said.

When farmers like Huie file a crop insurance claim, they only do so after suffering a loss.

“A common misconception people have is that crop insurance guarantees a profit. Wrong!” he declared.

“There are a few groups out there that would like to paint a different view of farmers, fat cats that live on handouts. There may be some of those out there, but I don’t know them,” Huie stated.

“The farmers I know study the most efficient, economical way to grow a crop,” Huie added. “They rush to fertilize and plant with faith that Mother Nature will bring rain and crops will grow to sell at harvest. They agonize over the weather, insects, decisions, and generally sleep very poorly during the growing season. Those are not the traits of a fat cat.”

CROP INSURANCE IN ACTION: Tom March, Bethlehem, Connecticut

March Farm View2In 1915, Thomas and Rose Marchukaitis, two Lithuanian immigrants who had been in the country for only a few years, purchased a farm in Bethlehem, Connecticut, which consisted of 114 acres and supported 15 cows and two horses. There, they raised their nine children and worked hard for their American dream.

Three generations later, their grandson, Tom March, is still farming that parcel of land, which has grown to 150 acres, along with his brother-in-law and their two sons. “We’re a diversified farm, because you have to be,” said March, whose farm consists of about 75 acres of sweet corn, 30 acres of apples, 4 acres of peaches, along with some strawberries and blueberries.

March took over the farm from his father in 1976 and has been at it ever since. Most farmers are quick to recount their “really bad year,” but Mother Nature has been unusually cruel to the March Farms with a long string of natural disasters.

“Having just one bad year would have actually been good news for us,” said March. Six out the last seven years, March Farms has had hail damage on their apple crop, one of their largest sources of revenue. “In 2012, I lost 90 percent of my apple crop on that late frost and then the other 10 percent was demolished by hail,” said March. “For my peaches, another big crop on my farm, I’ve also had major losses six out of the last seven years,” he noted.

“Needless to say, if I hadn’t purchased crop insurance, I would have had many lean years in a row.” March has been purchasing crop insurance for more than a decade, and said that he can’t imagine farming without it.

March said that he had high hopes for this year, thinking that he might be able to break the bad streak and post a big bumper crop across the board. And then, it started raining. And it rained, and rained, and rained. “This year, it’s been so wet, I haven’t been able to get any corn in the ground, and it’s already July,” he noted. “The tractors just couldn’t get through that mess.” Soon, it will be too late to plant corn altogether, as days shorten and nights get cooler.

March explained that crop insurance allows farmers to pick up the pieces when a disaster, or a string of disasters, hit. “In farming, you only get one shot at this. If you lose a crop, you’re generally done for the season,” he said.

March explained that while a late spring frost can completely destroy an orchard’s earning potential for the year, it doesn’t remove its ongoing costs.

“Farmers need access to crop insurance to stay in business, it’s as simple as that,” he said.

“If your apples freeze off at the beginning of the year, what are you going to do for income?” he asked. “You not only lost a crop, but you also have the long-term maintenance cost on the trees, weed control, pruning, pest control and then getting the trees ready for next year. So you have lots of cost and little income,” he explained.

That’s when purchasing crop insurance turns into a saving grace. The crop insurance indemnity offers both peace of mind, and financial backing to pay off production loans or to buy inputs for the next year.

March noted that generally, people don’t go into farming to make a lot of money, but because it’s a passion and a good, healthy way of life. “The only time you make any money in farming is when you grow something out of season, or when there’s a major disaster elsewhere and your crops are in good shape,” he said.

Like many other farmers both large and small, March is incensed by crop insurance opponents who malign farmers by claiming that crop insurance only helps a handful of rich farmers get richer. March said the statement itself shows how little these critics know about farming, or farmers. “You try growing this stuff and try raising a farm and see how much money you make,” he said. “Don’t give us this nonsense about how much money we make, because it’s not true,” he said. “They see the income numbers, but they have no idea of the costs.”

March explained that every year, March Farms gets through it one way or the other. “What are you going to do, cry over spilled milk or pick up the pieces and move forward?” he asked.

“We always manage to pull through,” he said.

CROP INSURANCE IN ACTION: Russ Mauch, Mooreton, North Dakota

“If you’re not a risk taker with an incredibly optimistic view of life and a deep belief in your own potential as a businessman, then you better not think about wanting to become a farmer,” says Russ Mauch, past president of the American Sugarbeet Growers Association and a sugarbeet farmer .

Russ Mauch1Mauch is a second-generation farmer who grew up on a farm in Mooreton, North Dakota, with his five sisters and two brothers. He has fond memories of his early life on the farm, where, with his dad and two brothers they ran a fed cattle operation.

“Growing up on a family farm was a great experience that instilled a great deal of self confidence in me as well as a positive view of my potential,” he says.

1973, was a watershed year in his life as they switched their farm over to sugarbeets and joined the newly formed farmer cooperative. “That kicked us out of the livestock business and put us into the full time sugarbeet business,” he says with a smile. Mauch says that when you become a sugarbeet farmer, there just isn’t enough time in the day for a cattle operation on the side.

“Sugarbeets require a heck of a lot of extra time and effort and we just didn’t have enough time to devote to both,” he said. He explained that a sugarbeet operation is a year-round venture, which entails planting in the early spring, tending to the fields during the growing season, and harvesting just prior to the first hard freeze. After the beets are harvested, most of them are placed in huge piles and allowed to freeze solid for the duration of the winter.

If luck is on your side, the winter will remain cold and the beets will stay frozen. They are removed from the piles during the winter and shipped to the processing plants, where they are refined into sugar. By the time this process is over, it’s nearly spring and time to start plating again.

Asked about his view as a long time farmer now, and the lack of knowledge that most folks have about farming, Mauch answered that it’s no great mystery why the urban public has a complete lack of understanding of the life and challenges of a farmer. “It can be summed up in two words,” he said.

“Magnitude and risk.”

Mauch notes that when the urban public hears about soaring grain prices, or the amount of money an acre of farmland might be worth, or news reports about the gross revenue that a given farmer expects after a successful harvest, “they automatically think that, given the numbers they’re hearing, we’re all filthy rich,” he says. “But that’s very often far from the truth.”

That’s the issue of “magnitude.” “Most people are not accustomed to hearing about expenses and bills in the size that farmers see on a daily basis,” he said.

For example, Mauch explains that his fertilizer bill for this year was $800,000; his crop insurance coverage was close to $200,000 and his diesel fuel will be over $400,000 for the year. “Those are numbers that, frankly, are incomprehensible to many people,” he says.

“My wife calls it ‘funny money,’ since it just doesn’t seem real,” he says, noting that it seems more like “Monopoly money” than the real thing. “Who ever has to deal with utility bills like that?” he asked.

The other issue is risk.

“What the public does not understand is all of the risks we take that are out of our hands,” he said. These include wind, torrential rains and heavy flooding, tornadoes, insects, wildlife, interest rates, crop prices that are very volatile, corn getting moldy and sugarbeet piles that rot in the fields from a sudden warm-up. All of these, he explains, are out of a farmer’s control, but at least they’re local. Then there are the risks that are out of control and global, like trade, prices and interest rates.

“Most people face maybe one or two of these risks at their current jobs,” he says. “Farmers face all of them, year in and year out.” And that, says Mauch, is why “crop insurance up here for the farmers is essential to survive.”

Mauch explains that for his farm, for example, they had the worst years on record in in 2005, 2007, 2009, and 2011. “They were the worst farming years in my whole life in the business,” he explained. “But 2004, 2006, 2008 and 2010 were our best years,” he says. “It’s this spiking up and down, which we have no control over, which is why crop insurance is so important,” he says. “Try planning for something like that!”

He says that crop insurance shields the farmer from adversity; it protects the viability of the business to recover thus ensuring the nation’s food supply. “Crop insurance does protect the farmer, but what it really does is give the farmer the ability to repay loans and it also backs up the bankers loans for collateral,” he says. “And frankly, most of them require it now. “

Crop insurance has also been an important tool for farmers who are looking to take advantage of all of the various marketing possibilities out there, since it allows them to forward contract for their crops and ensures that if those crops fail, they have capital to pay off their contracts.

“One of the main reason crop insurance became important was that it would enable you to pay back your operating lines of credit since we all borrow so much money,” he said, and added that the difference between crop insurance then and now was like “night and day.”

“Most farmers now are taking it out because it’s not only working very well, the coverage is sufficient to save the farm if you have a bad year,” he added. Mauch also noted that today’s successful farmers have become much more adept businessmen and understand the importance of marketing their crops to hedge their risks. “The ability of farmers to buy to up 75 percent or more helps them forward contract,” he said.

“And with the revenue products, a farmer who has forward contracted a crop will know that his bases are covered even if his crops are wiped out and the prices of commodities he holds contracts for shoot through the roof,” he said. “The fact that the buy up increases with the crop prices allows you to keep your bases covered,” an option that allows many farmers to sleep at night.

Mauch says that while farming is a business, it is a unique undertaking, because of the scale and risk involved, as well as what is at stake in the long run, which is the security, availability and affordability of a healthy, wholesome food supply. These factors necessitate some degree of continued federal involvement in agriculture.

“The government’s main role is to provide a floor for farmers should a disaster occur, which it does each and every year, someplace in the U.S.,” he said.

CROP INSURANCE IN ACTION: Patrick Solon, Streator, Illinois

Patrick Solon’s 1,500 acre farm in north central Illinois will celebrate its 165th year in the Solon family on May 23, 2013. The farm, located about 85 miles southwest of Chicago, has been a source of livelihood for six generations of the Solon family, growing corn and soybeans on some of the best, blackest soil in the country.

Solon, who has been farming for 25 years, works alongside his brothers and nephew in the family business, and has seen many good years and a couple of not-so-good ones. That’s why Solon always buys crop insurance. “I started buying crop insurance about 11 years ago,” he said. “The input prices for farming are so high that you need some way of protecting your investment when you put a crop in the field,” he said.

Patrick editedThankfully, Solon had purchased crop insurance when a horrific hailstorm struck his farm in 2004. “The damage was unbelievable,” he said, noting that he had a 92 percent loss on 150 acres of corn and a 75 percent loss on 115 acres of soybeans.

But you can’t talk about natural disasters in Illinois without mentioning the drought of 2012. Solon said that the year started off fine, and by the first week in May, his crops looked great. “Memorial Day weekend, we had a nice weekend with a shower,” he said. “But then, the spigot just shut off.”

Over the course of the next few months, the temperatures were consistently above 100 degrees and the rain was very, very scarce. As Solon scanned at his fields and those of his neighbors, he became more and more pessimistic that he’d be pulling any corn or soybeans at all out of his fields.

But sometimes, it might be a ‘best practice’ to manage your expectations, because as Solon entered his fields in the fall on his combine, “I found a lot more than I expected,” he said. Solon says that thanks to the deep planting of his seeds, his no-till planting of his soybeans — which helps conserve water — a few scattered showers late in the summer and his farm’s rich, black soil that held water in the worst of times, he ended up with “a pretty good crop, given the drought we went through.

“I really lucked out this year,” he said. “Where this farm is, the soil it sits on and the luck of the draw in getting a few rain showers here and there made all the difference in the world.”

Unbeknownst to Solon, his little corner of Illinois was practically an oasis. Professional agriculture surveyors who had travelled through southern Indiana, and southern Illinois and then made their way to his part of the state, told him that “you’re in the garden spot of the state,” pointing out that nearly every other county in the state was in incredibly bad shape. “Almost all of the rest of the farms in the state are done,” they said, in terms of their potential to be able to pull anything out of the fields.

“It made me feel good that this farm, with all its history of drought, had done very well in this one,” said Solon.

Solon, whose crop insurance premiums exceed $20,000 annually, says he collects an indemnity only about once every eight years. And while he didn’t have a claim this year, he worries that cuts being discussed in Congress will make crop insurance less affordable to the very farmers who need it to make it through years just like this one.

“If farmers don’t get help from the government underwriting the cost of crop insurance, then crop costs and food costs are going to go up,” he said. Solon noted that on his farm, it takes an investment of about $850 per acre to put in a corn crop, counting the costs of all inputs. “That’s a big investment, and farmers can’t afford to lose it all without some back-up plan,” he said.

“There are areas where the government sees fit to help underwrite insurance: crop insurance is one, flood insurance is the other,” he said. “And when disaster strikes, it costs the government less money because those policies are in place.”

Solon said that it defies good business sense that some farmers — about 14 percent of planted farmland in the U.S. is not covered by crop insurance — don’t buy crop insurance. He says that while they might have deep pockets, it just doesn’t make sense to take such a big risk unnecessarily, when risk in farming is always right around the corner. “Who would build a million-dollar house and pay cash for it, and not take out insurance on it?” he asked.

“I sleep a heck of a lot better at night because I know I have crop insurance coverage,” he said. “I might not make anything, but the fact that I have enough insurance to pay off my operating loan means that I have another year to farm.”

Crop Insurance by the Numbers

Crop insurance provides peace of mind

CROP INSURANCE IN ACTION: Keith Miller, Great Bend, Kansas

Wheat CropGreat Bend, Kansas, farmer Keith Miller looks at the big picture. Crop insurance, he declared, is not just an agricultural safety net for the farming community. It is an economic imperative.

“I do feel that the general public doesn’t understand that 95 percent of all farmers are trying to do the right thing,” he said. “If we didn’t have crop insurance in some form, the cost of food would go up considerably.”

“Crop insurance was a significant part of our operation,” he said, “even before the drought.”

Kansas, the biggest wheat-producing state in the country, has been ravaged by the worst drought to hit the Great Plains in a quarter century. All 105 counties experienced drought conditions, according to Gov. Sam Brownback as he appealed to residents to conserve water. Loss from the long-running arid condition beginning in 2011 was estimated at more than $2 billion.

Crop insurance has allowed the farmer to survive and get to the next planting season. Said Miller, “For the most part every farmer tries his best to raise a crop so we can feed the hungry people around the U.S. and the world.”

A third-generation farmer, Miller began with 400 acres of wheat farms in the 1970s. Today, he is farming land equivalent to acreage being farmed for a dozen of his father’s neighbors, the survival and expansion made possible by his hardy farming smarts, the grace of the Lord, and his insurance coverage.

“When I started, a tractor was $20,000 new and today they are $300,000 plus,” he said. “Today I am farming land that 12 of my dad’s neighbors were farming.”

His insurance coverage was able to cushion the blow, so to speak, when he experienced a “100 percent loss” from a major late freeze on his wheat crops.

“It froze when the wheat was pollinating and killed the plants,” he explained. He added that he was also covered for hail “and other disasters.”

The Farm Bill is extremely important to preserve a constant supply of safe food for the economy of the U.S., Miller said, echoing what almost every farmer acknowledges as a personal creed.

“If we were to lose the Farm Bill, the family farmer would start going by the wayside because they would not be able to stand all of the risks incurred in the farming industry,” he warned. “It would be the beginning of the end as we know [it for] the family farmers.”

CROP INSURANCE IN ACTION: Bing Von Bergen, Moccasin, Montana

Bing Von Bergen is not only the president and acting CEO of the National Association of Wheat Growers, he’s a third-generation Montana wheat farmer who has seen all kinds of weather over the years. “Last year, parts of the nation had the worst drought since the ‘Dirty 30s,” he said, recalling the name given the Dust Bowl years.

Von Bergen farms about 4,700 acres near Moccasin, Montana, close to the heart of the state. Growing up in agriculture, he knows hard times can be just around the corner.

But a lot has changed since the Dust Bowl years, including the tools farmers have to manage risk. At the top of that list is crop insurance. “Crop insurance is our principal safety net,” he said. “And farmers are fighting to preserve it.”

Von Bergen says that in the 34 years that he’s been farming, crop insurance has gone from being a program that few could afford or would consider purchasing to being the most important risk management tool available to farmers today. “It has taken 30 years for crop insurance to develop from a program that offered little protection into a program with real protection,” he said.

“The farmer’s cost of purchasing crop insurance has gone up substantially, but it works,” he noted. The statistics bare out the fact that farmers everywhere think crop insurance is worth spending their money on. Last year, roughly 1.2 million crop insurance policies were purchased by farmers, protecting 86 percent of planted cropland and covering 128 different crops.

Von Bergen says that despite facing the greatest drought in decades last year, farmers who had purchased crop insurance bounced back and were ready to plant again this spring. “It wasn’t long ago that farmers were on Capitol Hill every year after a big natural disaster asking for aid,” he pointed out.

“Nowadays, with the vast majority of farmers purchasing crop insurance, that’s no longer the case. That means that taxpayers are no longer stuck footing the bill for large-scale natural disasters through ad hoc disaster payments.”

Von Bergen recalled stories he had heard while growing up about the collapse of the farm economy during the Dust Bowl years and how farmers left their land in droves and fled to the cities.

“If we didn’t have federal crop insurance, some farmers would have failed and many others would have suffered crippling losses like in the 30s,” he said. “The federal government stepped in because they realized that if we couldn’t keep people on the farms, we couldn’t feed the nation,” he noted. “This is about national security.”

One of the biggest obstacles farmers will face in the upcoming years are potential changes to the crop insurance system, despite the fact that it has proven that it works well as constructed, Von Bergen said. For example, there are groups pushing the idea of means testing, which could force some of the largest and most successful farmers to pay higher premiums for the same crop insurance coverage.

“We have a system that works well, and we don’t know where the tipping point is,” he noted. “It’s not by chance that we have this system that works; it has been through years of tweaking and now it’s a system that works,” he said. “If you use means testing, crop insurance might no longer be viable, affordable or workable.”

Von Bergen said that crop insurance is basically like any other form of insurance. It takes a large swath of the population and pools their combined risk together to get a premium that is affordable. “But if you take the best drivers out of the pool, the cost goes up for everyone,” he noted.

Von Bergen explained that as a Montana wheat producer, he knows that he lives in a part of the country that is inherently at higher risk of drought than other parts of the nation.

“If they do means testing, you’re definitely going to alter the mix of those who purchase crop insurance and skew it against those of us who are in the high risk areas,” he said. “We fear premiums in Montana, and through out the rest of wheat country, will go up.”

But Von Bergen is confident that farmers will stand together and push for a strong crop insurance policy in the upcoming farm bill. “Every major commodity group believes that preserving federal crop insurance is a top priority issue for them,” he said.

CROP INSURANCE IN ACTION: Marvin Jensen, Kensington, Minnesota

Local legend has it that a group of Vikings happened upon this part of west-central Minnesota in 1362 and left runic inscriptions on a piece of stone. Hundreds of years later, a local farmer found the stone, and the discovery has forever added an air of mystique to the town on Kensington, Minnesota, and the fabled Kensington runestone.

marv jensen pic.JPGMarvin Jensen grew up on a farm near Kensington, and has heard discussions of the runestone his entire life. Jensen, a second-generation farmer who cultivates about 1,900 acres of corn and soybeans, says that like the runestone, the local weather is an ongoing mystery that is sometimes impossible to plan for.

Jensen lives in a part of the state that was not as heavily damaged by the drought of 2012. But his farm wasn’t entirely unaffected.

“I’m not really in the bad part of the state that got really hurt,” he says. “I have some light soil that dried out because we didn’t get all that much rain, but much of the rest of my soil is heavier and it held what little moisture we received better,” he said. Jensen says that the corn in his lighter soils averaged about 60 bushels to the acre, with the heavier soils yielding around 208 bushels. “And that’s considered a pretty good yield for this area,” he said.

“We really didn’t have much rain at all, but it just came at the right time,” said Jensen, who added that getting his seed in the ground early also helped the success rate of his crop. He noted that while his farm obviously didn’t experience the worst of the drought, there were many farmers in the southern part of the state who did, and lost nearly everything.

And that kind of extreme variability — which can leave one farmer’s fields wilted while leaving those of another farmer just a county away in relatively good shape — is why Jensen purchases crop insurance every year.

Jensen said that he’s been purchasing crop insurance since the mid 1990s, when the federal government stepped in to encourage greater participation in the program and began to partially discount the farmers’ premiums. “ Before that, a guy really couldn’t afford it,” he said.

Jensen recalled a major disaster he faced in 1980, before most farmers could afford to purchase crop insurance. “A big storm came through with hail stones, some of which were about the size of cannonballs,” he said. “The hail was so big it punched holes in my aluminum roof,” he explained. “It wiped out my whole crop, and I didn’t have any crop insurance, or any hail insurance.”

Jensen says that when it hit, he was lucky because most of his land was already paid for and he was able to use that land as collateral to borrow on for his next year’s production costs. “So that’s what kept me in business,” he said.

Jensen said that handling natural disasters through the crop insurance program is much preferred to the past, when farmers couldn’t or didn’t purchase crop insurance and then found themselves relying on federal disaster assistance when calamity struck. “By the time a disaster bill got through Congress and the money arrived, it was two, three years late,” he said. “And a bank isn’t going to make a production loan based on a promise from the federal government that can take years to deliver,” he added.

Jensen is happy that the new emphasis is on the public-private partnership of crop insurance. “A crop insurance claim is much quicker, and you get your money in a month or two.”

CROP INSURANCE IN ACTION: Bill Bridgeforth, Tanner, Alabama

“In a typical year, with five different crops in the ground, it seems like we farm all the time,” said Bill Bridgeforth, a fourth generation farmer from Tanner, Alabama, in the state’s northeast corner. Bridgeforth farms 10,000 acres of cotton, corn, soybeans and canola with his brother Gregory and their sons.

“I’ve always wanted to farm,” he said, adding “I always enjoyed working with my father and brothers.” Bridgeport explained that being a farmer in the Deep South could be a mixed blessing. On the positive side is the region’s extended growing period, which allows double cropping.

“Typically, we start planting our corn on March 10, plant soybeans on April 10, and cotton on April 25,” he explained. “By May 25, we harvest our canola, and then plant soybeans behind the canola,” he said. “And then we harvest wheat on June 5 and plant soybeans behind that wheat,” he added.

But the negative side of the extended growing season is the extreme weather swings, like powerful thunderstorms, tornadoes and hurricanes that can also plague the region. “There’s just so much variability in the weather here in the south,” he said.

That’s why Bridgeforth buys crop insurance every year. In fact, he’s purchased crop insurance policies for the last 35 years in a row. “I can’t even think about farming without crop insurance,” he said.

“We buy crop insurance because the cost of production is so high, you’d have to be crazy to not purchase crop insurance every year,” he said. Bridgeforth explained that with input costs rising every year, it costs more and more to put all of his crops into the ground. “We have to have crop insurance in case we have a bad year, or a bad crop, and we need to have some help making ends meet,” he said.

The cost of farming on an operation the size of Bridgeforth’s would be staggering to those outside of agriculture, who are likely unfamiliar with the high cost of production faced by modern farmers. Crop insurance is no exception to that rule.

Bridgeforth says that they spend several hundred thousand dollars a year purchasing crop insurance, but that isn’t even their biggest cost of production, given the high input costs they face. “When I do our budget, I don’t think twice about buying crop insurance, it’s just like buying fuel, seed and fertilizer,” he said.

Although most years are good for Bridgeforth, having crop insurance as a line item in his budget paid off in 2012, as northeast Alabama, and much of the center of the country, found itself strangled by a historic drought.

The drought began with an extremely hot May and June, and produced the worst corn crop Bridgeforth had ever had. “It was so bad, that while we would ordinarily start harvesting our corn on the 20th of August, we started picking it on the 15th of July,” he said. “Because there really wasn’t much there in the field and it made better sense to get it picked,” he said.

In addition to his busy schedule farming, Bridgeforth is also the Chairman and a charter member of the National Black Growers Council, which was founded three years ago and serves as a network for black men and women who are involved in agriculture. “Our mission is to improve the viability and profitability of the black row crop farmers,” he said. “And we hope to develop black talent for the next generation of farmers.”

The advice he would give to all the growers he knows, says Bridgeforth, is to purchase crop insurance every year. “There are lots of challenges facing a farmer: the weather, the cost of production, the cost of labor, and of course a market that can fluctuate wildly,” he said. “Just a good crop is not enough. You need to have a good crop and a good price.”

CROP INSURANCE IN ACTION: Trent Patterson, Lake County, Tennessee

For Trent Patterson, 2012 was a very dry year.

Drought parched much of Tennessee, where he farms about 4,500 acres planted to cotton, corn, soybeans and wheat. The drought forced farmers like Patterson to switch crops from the flagship cotton to soybeans, which requires less agricultural inputs. With crop insurance as part of most farmers’ backup plans, many of them were able to get by.

“The drought of 2012 caused hardship from planting to harvest,” said Patterson of Lake County in northwest Tennessee. “We planted, replanted, spot planted and in some fields abandoned the cotton crop and planted beans only to plant and replant those and get half a stand.”

Corn yields took the biggest hit during the year-long drought. “We were unable to fill our contracts,” he said.

Tennessee is a major producer of cattle and is a key grower of crops like cotton and soybeans. The farm sector alone is responsible for nearly $3 billion in farm gate receipts, according to the Tennessee Department of Agriculture. About half of the state’s land area, or some 11 million acres, is comprised of farms. The western portion where Patterson farms is prime land fed by the flood plains of the Mississippi River. This area is largely devoted to soybeans, wheat, corn, cotton and sorghum.

Crop insurance has been a much-needed lifeline for Patterson and other farmers like him. Crop insurance has allowed them to survive drought, floods and other disasters that form part of the natural landscape farmers must contend with on a yearly basis in much of the U.S.

For farmers in Texas, 2011 was the worst drought in a century. For farmers in Louisiana, the program was critical in 2005 when they endured the double-barreled disaster brought on by hurricanes Katrina and Rita. For farmers in Tennessee and in much of the Midwest, the drought of 2012 was the worst in 25 years. And while crop insurance only covers a percentage of the loss in most cases, the money provides the much-needed infusion to help farmers survive until the next season.

Said Patterson, “Without crop insurance as a risk management tool, a disaster as we have had in 2012 is not survivable to many farming operations.”

Each year is a “make or break situation” for most farms, he explained. For his part, he has filed the paperwork to receive insurance claims for cotton crops that had to be switched to beans. The insurance adjuster has visited his farmlands and reviewed his paperwork, which includes a history of his yield production.

Patterson says that crop insurance is a key component of the farm safety net and a major feature in ongoing Farm Bill discussions. If the country’s goal is to keep U.S. food and fiber industries viable, then the farm bill must include crop insurance to help American farmers manage their risks. These comments reflect the sentiment of many farmers and lawmakers from across the country who have strenuously argued that a viable crop insurance program is essential for the future of U.S. farming.

Patterson says that crop insurance is either a subsidy or an investment, but either way, it’s especially critical to a chancy, “risky business” like farming. He underscored the “wisdom” of protecting the American farmer and the industry.

“I don’t want to have to go hungry and naked because I didn’t help my neighbor with his garden if I was eating out of it,” he said. “(So) is it a subsidy or an investment?”


CROP INSURANCE IN ACTION: Paul Penner, Hillsboro, Kansas

In 2012, the drought in Kansas was in its second year, and wheat, corn and soybean farmer Paul Penner was just trying to survive to the next season.

Crop insurance has been Penner’s lifeline for the last two years and the years before that. It has given him and his wife, Deborah, the means and security to plan ahead and prepare for another year should the drought persist. “Without it, many farmers, including us, would face financial uncertainty as revenue would be insufficient to cover production expenses,” said Penner, 60, of Hillsboro, which is about 45 miles north of Wichita.

In 2012, the Penners had a 75 percent insurance coverage plan for wheat crops and 70 percent coverage for fall crops, such as corn, soybeans and sorghum. Just like car insurance, his goal is to “never have to use it.”

Penner has been covered by crop insurance policy for more than 25 years now. If not for this federal safety net, he said, “I wouldn’t be in farming today.”

The insurance helps him recover part of his losses. “It pays for a little bit of your crops or production if we had a bad year like the last two to three years’ drought. The insurance pays me a certain percentage of the revenue I have lost. They don’t pay all of it,” he explained. “They will never pay you 100 percent.”

But he said he’s OK with not recovering 100 percent because even in a bad year, he said a farmer does not really lose a 100 percent of his production. “At least you’re given enough so you can pay your bills,” he said.

Insurance estimates are based on actuarial history of crop yield and the price of the commodity, among other parameters. Premiums could be higher for one crop per acre than the other. In Penner’s case, corn has a higher premium cost than wheat and soybeans.

Filing is straightforward process. A farmer reports his losses to the crop insurance agent, and the insurance company will then send an adjuster to verify the claims based on established guidelines. The farmer and the adjuster will work through production data sheets. Once approved, help is on the way.

His agent is a local, family-owned company with businesses around the Midwest. It’s the third insurance company Penner has contracted over the years, as many have folded up and sold their business.

The premium varies year to year. Penner said he has paid anywhere from $8,000 to $20,000 over the years he has been using crop insurance. The federal government picks up part of the premium – about 60 percent – as the cost to the farmer would be “prohibitive.”

With the current mood in Congress to cut the national debt, there are some who would like to see the entire crop insurance bill “disappear,” he said. He asserted not all so-called “subsidies” should be painted with the same brush, and it’s his view that ad hoc disaster legislation “is a thing of the past.”

Like many in Kansas, Penner was born to farm. Kansas ranks sixth in farm exports. Beef, grain sorghum, and wheat – introduced to the state by the early Russian Mennonite settlers – are the major products. Hillsboro, where Penner Farms is located, has a population of about 3,000.

“Farming is a risky business as weather is the biggest uncontrollable factor,” Penner said. “Without an adequate risk management tool like crop insurance, a farmer cannot make marketing plans with the reasonable certainty he will be successful.”

Penner says that he can’t fathom managing all the risks of farming without crop insurance. “Crop insurance is absolutely necessary, period,” he said. He says that what crop insurance helps this country do is to ensure food security — the country’s ability to provide a reliable and safe food supply for its people, and not be forced with “going to China and Brazil to purchase our food.”

CROP INSURANCE IN ACTION: Tom & Mike Audet, Orwell, Vermont

Ledge Haven Farm might be one of those Vermont farms that would be most likely to end up on a postcard. The place is just about everything you would think of when you put the words Vermont and agriculture together. The 550-acre farm, owned by brothers Tom and Mike Audet, is a family-run dairy and maple sugaring operation located near the idyllic shores of Lake Champlain, just down the road from historic Mount Independence in Orwell, Vermont.

The Audet brothers have been in business together since 1972, having been raised on a farm just down the road that is still operated by yet another Audet brother. “We have been making pure Vermont Maple Syrup for over 40 years right here on our farm,” says Tom Audet. “It is an Audet family tradition with three generations of our family pitching in to make the final product,” he says.

The brothers manage their risk using one of the gold medal standard rules of modern agriculture: Diversify. The brothers milk 270 dairy cows, attend to another 280 young stock and breeding stock, manage 450 acres of corn, hay and alfalfa, as well as tapping hundreds of maple trees on the 50 wooded acres of the property. “Diversifying is our first line of defense in managing risk, and crop insurance is the second,” said Audet.

Audet explains that in addition to raising a diversity of products, they also rotate their crops, hoping to further hedge their risk. “But we wouldn’t think of planting this many acres of corn without mitigating our risk with crop insurance,” he adds.

2011 would turn out to be one of those years when Audet would thank his lucky stars for writing that crop insurance premium check and purchasing the small peace of mind that comes with coverage.

The spring of 2011 was very wet, and very cold, and the brothers had a lot of prevented planting as a result. Despite the setback from the wet spring, the brothers reseeded some of their lost acres and kept their fingers crossed for a nice settled weather pattern over the course of the summer and a bountiful fall harvest. And then came Irene.

Tropical Storm Irene, which came ashore in North Carolina as a major hurricane and had devastated the state’s tobacco industry, continued moving north, and slammed into the hilly New England farmland with high winds and prodigious amounts of rain. “Irene hit us in late August and drenched us with 7 inches of water in two days,” he said. “You throw all of that water on these clay soils late in the season, and they just don’t dry out.”

Irene so thoroughly saturated Ledge Haven Farm that it made it impossible to get the corn out of the fields. In fact, the fields were so saturated that even professional harvesters were rebuffed on two separate occasions. “We’ve never in our lives seen a corn harvester that couldn’t make it out of the fields, but this time, they didn’t fail to get the harvest out once, but twice,” he said. “That’s how wet Irene left us.”

In addition to not being able to get the vast majority of their corn out of the fields, the yields on the corn that they were able to harvest were poor. “Our yields were the worst they’ve ever been,” noted Audet. “That’s the beauty of crop insurance, it not only protects you from risks you have no control over, but the record keeping of the agent and the system helps you keep track of what you did this year and what you’ve done in the past,” said Audet.

After the multiple attempts to harvest the corn had failed, accompanied by the realization that the hay quality was sub-par and overall yields were well below where they should have been, the brothers contacted their crop insurance agent. “We were reassured that we were covered from what Irene had thrown against our farm and the adjusters would come out soon,” he said.

Audet noted that the year had been so plagued with issues for the brothers that they had already established a good working relationship with their crop insurance agent prior to Irene making her dreaded appearance. “I got to know him quite well because we had several phone calls that year, starting with the calls in the spring and ending with Irene.”

The crop insurance adjuster came out to the farm, tallied the losses and told the Audets that their indemnity check to help defray the losses they had experienced would be on its way quickly. “I was quite surprised by how quickly we had an indemnity in hand,” said Audet. “Our losses were quite substantial and the check was here in about three weeks,” he explained. “Pretty timely, particularly since I knew they were dealing with a lot of folks like us with major losses.”

While crop insurance doesn’t fully compensate farmers for what they would have realized with a full harvest, it does help them put together the pieces and get back on their feet. “Yes, it’s 2012 and off we go again,” says Audet, who is a bit concerned about the weather patterns and progress thus far this year but remaining optimistic about the possibilities.

“It’s sure nice to know that we have crop insurance, and that it’s affordable —because of the subsidy — so that small farmers like me can get the coverage we need and survive to plant and harvest yet another day.”

CROP INSURANCE IN ACTION: Jimmy Miller, Interlachen, Florida

For centuries, blueberries were gathered from the dense forests and bogs by Northeastern U.S. Native Americans, and are one of the only fruits we consume that are native to North America. So when most of us hear about blueberry farms, we conjure up images of cool, damp climates and cold winters.

Except on Jimmy Miller’s blueberry farm, which is located in Interlachen, Florida. Miller has operated the farm, which is the oldest existing blueberry farm in the state, since 1979. Miller, along with his two daughters and son-in-law, operates the 124 acre operation using a variety of blueberry developed by the University of Florida that tolerates the summer heat and mild winters.

One of the main issues for blueberry growers in Florida, Miller explains, is that they must have at least 200 hours every winter where the temperature goes below 45 degrees in order for the bushes to flower, and fruit, later that spring. Lack of enough cool days can mean very low fruit production the following year.

The Millers sell their blueberries, which are among the first in the nation to ripen each year, to both national and international fresh fruit markets. While they are relative newcomers to the blueberry market, they have been dealt quite the lucky hand by Mother Nature. That is, until early spring, 2012.

“We never had a real loss until this year,” said Miller, who explained that their primary risk is a freeze or hail. “And the way we manage freeze is with overhead water protection,” he explains, which protects the bushes by allowing a layer of ice to form on the plants and the berries, keeping the plants warmer than the outside air.

Florida, like much of the rest of the country, had a very early spring in 2012, which resulted in the bushes pushing out new growth and eventually blossoming several weeks earlier than usual. “The plants become vulnerable in late January or early February, and then the berries start to form,” Miller noted.

“It was an early spring, and then all of the sudden, we had a front blow through that dropped our temperature to 24 degrees,” he explained. That usually wouldn’t be a huge problem, given the sprinkler system, but this freeze was accompanied by 15 to18 mile per hour wind gusts, which made the water evaporate as quickly as you spray it.

“When water evaporates, it cools the plants, and we were trying to warm them,” he said. “We had plants that were vulnerable because they were in full growth, and then we had the wind,” he added. “The second night, the temperature actually got down to 18 degrees, but we were fine because we didn’t have the wind.”

The next day, the Miller clan was hopeful that it would be ok, “but we also knew that it could be catastrophic,” he said. Miller explained that one of the risk management strategies they have employed is the use of different varieties of plants that have different cold tolerances and will go into bloom at slightly different times.

The problem was, the bushes that should have fared well with the cold snap didn’t fruit fully that year because the mild winter had not met the requisite number of cool days. “And the plants that did put out a good amount of flowers were severely damaged by the freeze and accompanying winds,” he said.

Thankfully, for Miller, he always purchases crop insurance, and if the blueberries didn’t look better in a few weeks, this could be his first crop insurance claim. After the cold snap ended, Miller called his crop insurance agent who came out for an initial assessment.

“When you feel like it looks pretty bad, you need to give your agent notice,” said Miller. As the agent came out to inspect the bushes, Miller noted that “initially, as the plants came out of the cold snap, we were all hopeful.”

But hope wasn’t enough. As the season progressed, it became apparent that the losses would be staggering. “Without crop insurance, it would have been bad, real bad,” said Miller. In the end, the blueberry farm suffered a seventy percent loss.

“I would have been forced to borrow money just to get through the next year,” said Williams, explaining that without crop insurance, he would have to go to a bank and ask for a loan just for operating capital for the year. “And then two bad years in a row, and you are really out on the ledge,” he said.

“This is a tool, a necessary tool,” he said of crop insurance. “You can’t absorb this kind of loss, so you need to have a tool in place to transfer some of the risk to a private company.”

Luckily, the blueberry bushes appear to be recovering in the warm Florida sunshine and Miller is optimistic about his family’s and his farm’s future. “I feel like we’re going to be fine,” he said.

CROP INSURANCE IN ACTION: Andy Bell, Climax, Georgia

On the first Saturday after Thanksgiving, you can chase a greased pig in the southwestern Georgia town of Climax as it celebrates its Swine Time Festival, which normally draws up to 30,000 people in an area where only 300 people live.

There is also corn shucking and a squeal-off. Climax is the highest point on the railroad line between Savannah and the Chattahoochee River. After its founding in the 1880s, the town served as a rail junction and an agricultural community. It was incorporated in 1905.

The weather for a farmer in Climax can be tricky. The town is located only a few dozen miles from the Gulf of Mexico which can bring in hurricanes as powerful as Katrina, which struck New Orleans with devastating fury in 2005. But this corner of southern Georgia has also been hit by a drought that rivals the one which hit this year in the U.S. Midwest, shriveling the cotton and peanuts that farmers grow in the area.

“We’re 90 miles from the Gulf of Mexico. We had a tropical storm come through in [20]09. We’re so close to the coast that we have to have some type of insurance,” said Andy Bell, who farms about 2,000 acres outside of town. On the other hand, “2007 was a terrible, dry year.”

“We buy crop insurance every year,” said Bell. “We typically buy 70 percent [of coverage]. You’re not going to make any money but it will prevent you from losing the farm.”

His main crops are peanuts, cotton and corn. Some 700 acres are sown to peanuts, about 1,100 acres to cotton and about 200 acres to corn. There is also a small herd of about 200 beef cattle.

Bell said there were some anxious moments before Hurricane Isaac veered away from their area a few months ago and headed for New Orleans. The storm season, which does not end until November 30, remains a threat, but the end to hurricane season is not far off.

For once, Bell is looking forward to harvest season as it looks like the weather is going to cooperate. “I think the peanut crop is going to be good this year. We dodged a bullet when the storm went the other way,” said Bell, who began farming in 1982.

The average yield for peanut farms would run around 1 to 3 tons per acre.

But just as Bell suspected, this year yields will be at record highs. USDA forecasts it at a record 3,714 pounds per acre, which would be 400 + pounds higher than last year.

Bell’s cotton crop is also in pretty good shape, with the Georgia farmer saying they may approach the yields of a few years ago when the harvest stood at 1,300 to 1,400 lbs an acre. That is pretty good considering the national average is about 800 pounds an acre.

His main problem though is the price of cotton. Since scaling a record high at $2.27 a pound in March 2011, cotton prices have shriveled and are now trading around $.75 a pound. “We have (had) a price collapse,” he said.

In good years and bad, Bell said crop insurance is indispensable simply because the weather in his area is so unpredictable. “It can rain here and then five miles down the road, you get no rain,” he said. Bell noted that crop insurance is ”not a fix-all,” but it gives farmers a chance to come back after a bad year.

For him, removing crop insurance is unthinkable. Banks and other lending institutions would not extend any credit to farmers if there is no safety net like crop insurance to give them some assurance that they will get part of their money back.

“I think it would be catastrophic,” Bell declared. “He [the American farmer] would be out of business. We’ve got to have some form of insurance.”


CROP INSURANCE IN ACTION: Bob and Mike Buntin, Thompsonville, Illinois

The choices Illinois farmers faced in the past when drought struck the Midwest were unpleasant all around. They could borrow money from family, drain their hard-earned savings or go under.

In the last decade, crop insurance has made it possible for brothers Robert (Bob) and Michael Buntin, owners of Buntin Bros., Inc. in Thompsonville, to avoid any of that even as this summer’s severe drought hit the state. For those without such a buffer, said Bob, 72, “It’s like losing a job. You get by the best you can.”

Thompsonville, with a population of nearly 600, is bordered on the south by Kentucky and on the east by Indiana.

This past summer, the entire state of Illinois experienced varying degrees of drought — worsened by excessive heat — causing crops to shrivel and die from the blistering temperatures.

The Buntins operate a 5,000-acre family farm, planted to corn, soybeans and wheat. This drought has been the worst since 1988, said Bob, and their yield this year is projected to be a little lower than ever before. From 147 bushels of corn per acre, 60 bushels of wheat and 45 bushels of soybeans, he sees production this year slowing to an average of 15 bushels each for soybeans and corn and “above average” for wheat.

“We’re tired of the dry weather,” he said. “This is the worst this year.”

This year, the brothers wrote a crop insurance premium check for more than a $100,000; “You don’t pay monthly like most insurance companies,” said Bob. “You just write one check.”

And like a regular car insurance policy, they make sure they are covered for one year at a time. “You never know when your car is going to break down. You reapply every year so you can change your options.”

Bob says the process of purchasing crop insurance and filing for a claim is uncomplicated with very little paperwork. “If you keep your records straight, what kind of yield you get and report all these to government offices, it makes it easier,” he said.

“We’re going to be all right this year,” he noted. Such confidence comes from part wisdom, part history: A lower crop production traditionally results in higher prices. The Buntins are buoyed by current market prices at sky-high levels, which, Bob said, “should cover my losses this year.”

The brothers recalled past years when their farm faced weather-related crises. “It was dry here last year, dry here in 1983 and dry here in 1988, and you go back to the 1930s and the ‘50s.”

The U.S. has been experiencing extreme weather over the last few years, with 2012 now judged as the hottest year on record. The number of disasters that have run up costs into the billions of dollars have multiplied sharply since the beginning of the century.

In 2011, the worst drought in a hundred years crippled Texas, the biggest producer of cotton in the U.S. The next year, the drought moved to the Heartland.

But in addition to worrying about the weather, there are some ideas being floated in Congress that are causing some concerns as well. “I don’t think there should be a cap on insurance policy,” Bob mused, arguing how a farmer with 500 acres or 5,000 acres should be allowed to take out a policy based on his own needs.

“You got all the expenses; the big guy’s got more expenses than the little guy, but he’s got expenses, too,” he said. For a farmer who is just getting started, the banks will strongly insist that he get insurance for his own protection “at least to some degree.”

“Even the big, more established farms can’t afford to take a hit three or four years in a row,” said Bob, who has been farming since he was a young man in his teens. And the family tradition of farming will continue as one of Bob’s sons two grandsons have joined him and their uncle in meeting the upcoming challenges to feed a hungry world.

CROP INSURANCE IN ACTION: Jerry McReynolds, Woodston, Kansas

On land where wheat stalks heavy with grain would normally wave on a breeze in the late summer, the searing drought of 2012 zapped nearly every inch of land across the Kansas plains, leaving it burnt and lifeless.

There was no way to hide from the drought in the Grain Belt. Just one year after the worst dry spell in a century devastated farmers in Texas, it spread like a virulent disease into the Midwest — the breadbasket for much of the world’s corn, soybeans and, of course, wheat.

The United States is a major wheat-producing country, with output typically exceeded only by China, the European Union and India, according to the U.S. Department of Agriculture (USDA) Economic Research Service.

The drought struck especially hard in Kansas, one of the biggest wheat producing states in the country. Jerry McReynolds, a well-known wheat producer in the northern part of the state, said the dry spell is “one of the most serious droughts we have ever encountered in my farming career.”

Each year, McReynolds plants 2,300 acres of winter wheat, 400 acres of corn, 250 acres of soybeans, 800 to 1,000 acres of grain sorghum and 150 acres of forage sorghum. He also runs his own cattle operation. His farm is located outside Woodston, Kansas, a place just 136 people call home; where “Main Street” is all of eight corners tucked away near Highway 24.

Like many American farms, it is a joint operation by the McReynolds family. He said his three children have always helped him and his wife, Diane, in running the farm.

“Our son is a part of the operation. Our married daughters return whenever possible for harvest or other times. One daughter owns some of the land we operate. Another daughter and [her] husband would like to return to the farm, if possible,” McReynolds said.

McReynolds has taken an active role in two decades of farming. He has held several leadership positions at the Kansas Association of Wheat Growers (KAWG) and, as its president, he helped start the Kansas Farm Bill Coalition. He was also involved in the process that culminated in Kansas Wheat, the cooperative agreement between KAWG and the Kansas Wheat Commission.

In 1998, he was elected to the Kansas Farm Bureau Board of Directors representing the sixth district in the area.

But for all his years in the business, McReynolds says he has never encountered a litany of problems quite like those in 2012.

“All spring planted crops really suffered. Germination was a problem. The weather was extremely hot for a very long period of time, without moisture. We encountered temps to 115 degrees,” he said.

“We cut half of our corn acres for silage. I chose not to plant soybeans this spring because of the extreme dryness. Our grain sorghum and forage sorghum really suffered. Yields will be less than half of last year,” he said, adding however, that “wheat yields were surprisingly good, considering the hot, dry weather.”

Crop insurance has been vital for the continued operation of the farm, especially in the midst of the worst drought this nation has seen in a quarter century.

“Crop insurance is critical to our operation. I had a 70 percent level of coverage. However, that only provides around 60 to 65 percent coverage,” he explained.

McReynolds said he has already turned in the papers for “losses on the corn that was cut for silage,” a process of fodder being compacted and stored without being dried so it can be used as animal feed in the winter.

Other losses will be determined after the fall harvest by the insurance companies, but there’s no doubt the impact of the drought on his farm has been severe.

The fallout will extend into 2013 as farmers approach the fall planting season for winter wheat.

“Moisture is critical to get wheat up this fall, as well as germination of any volunteer wheat that must be destroyed before wheat planting,” he said. “Recovery after a drought is very slow. It takes years to get things back to normal. Drought causes revenue losses, emotional issues, cowherd reductions and a lot of uncertainty.”

Without crop insurance it would have been tough to stay in business, the long-time Kansas wheat farmer said. The way the system works, crop insurance payments are paid close to the time frame when loss occurs — before harvest time in case of prevented planting and replant payments, or shortly after harvest in case of yield or revenue shortfall. Most crop insurance claims are paid within 30 days after settlement – a vast improvement from the days of big, ad hoc disaster bills.

Crop insurance is not a government handout that depends on the taxpayers to pay when disaster strikes. Farmers must contribute financially in order to receive crop insurance and will invest more than $4 billion in 1.2 million crop insurance policies this year. These contributions help hold down the cost to the taxpayer and encourage people taking part to exercise financial discipline going forward.

Still another outstanding feature of the U.S. crop insurance program is that it allows farmers to customize their plans and coverage to accurately reflect individual losses and unique yields or risk.

“The input costs are so great, and our margins are so close, that without crop insurance many growers would be out of business,” McReynolds said.

Like everyone else, he is hopeful 2013 will bring better conditions. “Hardship causes us to improve our management practices, but it is a lot more fun when we get rain,” he added.


Todd and Ty Williams grew up on their family’s farm near Gruver, Texas, a town of about 1,100 people in the panhandle region. Todd Williams says he’s been driving a tractor since he was about seven years old, so it was just the natural course of events that he and his brother Ty would end up on the farm together as adults.

The brothers have been farming together since 1984. Williams notes that the main driver behind his desire to farm is his love for the work and the land, “because the money certainly isn’t in there,” he says. But above all else, he adds “there’s no better place on earth to raise your kids.”

The Williams brothers farm about 1,800 acres of wheat, corn, cotton and milo. Todd says that when he looks back at 2011, he remembers a year of unbelievable extremes. “Some people were flooded out in other parts of the country while we couldn’t buy a drop of water to save our lives.”

But farming and risk go hand in hand, and that’s why Williams purchases a crop insurance policy every year. “Wheat farming is so risky that using forward contracting as your only risk management tool is nearly impossible,” he says. That’s because if Mother Nature strikes and a crop is forward contracted without crop insurance, a farmer can end up owing a huge sum of money to fulfill the contract, on top of not having anything to harvest to provide income for the rest of the year.

Williams says he learned that lesson the hard way. He explained that a few years ago, he had a bumper wheat crop that was ready to harvest, so he worked through the day and on into the night, harvesting as much wheat as he could. He finally quit around 10 pm, with lots of wheat left standing in the field but exhausted from the long day’s work. Later that night, a large hailstorm blew through, crushing the remaining wheat. “One day it was ready to harvest, the next morning there was nothing taller that two inches in the whole field,” he said.

“Playing futures is risky, but contracting your wheat is an even bigger risk,” he notes.

Texas is a state that is not unfamiliar with droughts, heat waves, tornadoes and other weather anomalies. And because of that kind of weather, many Texas farmers are prepared to lose some of their crop on most years; but never all of it.

The drought of 2011 was so widespread and so extreme that even irrigated crops could hardly be saved. “It was so hot and dry, our irrigation pumps just wouldn’t cut it and our crops dried up,” Williams said.

Williams explained that he and other farmers were pulling so much water out of the local aquifer that they had to continually lower their pumps to keep the water coming.

The Williams brothers were running five irrigation wells and still couldn’t keep up with the heat and the lack of rain. “The crops just withered despite the irrigation,” Williams noted. “It was 110-112 degrees, the wind was blowing and the rain was nowhere to be found.”

Average rainfall for that part of the Texas panhandle is usually about 18-20 inches annually. In 2011, they received less than six inches for the whole year. Williams explained that when all was said and done, they were able to save a tiny portion of their crop by focusing irrigation on certain areas, but for the most part, “almost the entire crop was lost.”

Luckily his crop insurance agent, who Williams describes as “a super guy,” had touched base with the brothers throughout the year and knew that some degree of loss was inevitable. After months of fighting the drought and watching their crops wither despite their efforts, the Williams brothers came to the difficult decision that their fields were simply lost.

“The loss of a crop is crushing, even when you have crop insurance, because the insurance doesn’t really make you whole, it only helps you to recover to a small degree,” said Williams. He explained that like other farmers, he always looks forward to harvest, because it not only means the infusion of money, it’s the accomplishment of a year’s work. “I’d much rather have a harvest than an indemnity check,” he said.

But when disaster strikes and you lose some – or all – of your crop, farmers hope that the indemnity payment from their crop insurance policy is quick to arrive. Williams said that for him, that has always been the case. “Usually, the indemnity arrives in a week to 10 days,” he noted.

“If we didn’t have federal crop insurance last year, I’d be working at Wal-Mart or somewhere else today,” Williams said. “There is not a chance in the world I’d be farming today.” Williams said that because of his crop insurance policy, he and his brother are back farming today, and although it’s a bit dry, it’s a huge improvement over last year.

“Without federal crop insurance we’d be toast.”


CROP INSURANCE IN ACTION: Whitney Blodgett, Shoreham, Vermont

Whitney Blodgett has been farming in the family’s Vermont apple orchard, commercially known as “Sentinel Pine Orchard,” his whole life. Blodgett says that the family purchased the orchard in 1964, and have since grown, adding the abandoned dairy farm next door.

Sentinel Pine Orchard, is comprised of 220 acres of apple trees, mostly planted in the Macintosh variety. When harvest time comes, Blodgett along with his wife and farm hands, store, pack and ship fresh fruit to market. “That is our niche market because we can grow those apples very well in this climate,” he says.

Blodgett explains that because of the nature of the business – there aren’t a lot of ways to protect an orchard from the whims of Mother Nature – his chief risk management tool is crop insurance. “We had crop insurance claims in 2004, 2007 and 2011,” he explains. “And all of them were because of hail.”

Hail has always been dreaded in the orchard industry because it hits later in the summer, with the coming of the severe summer thunderstorms, and can damage the apples to the point that they’re no longer marketable as fresh fruit. But 2011 was a very different story.

The hail hit in the early spring, just as the blossoms had fallen from the fruit and the small apples were beginning to form. “There’s nothing we can do against hail because we can’t build a roof over the whole orchard,” he said.

“It was very odd in 2011, the hail hit early in the development of the apples and deformed them,” said Blodgett. “We had to wait and see how they developed and then decided if they would be able to be sold as fresh fruit,” he explains. The other option, if the fruit formed but wasn’t marketable as fresh, was to sell the apples for cider.

Blodgett says they held their breath and said their prayers for months as the apples slowly developed, keeping their fingers crossed that the hailstorm didn’t alter the apples beyond the point of marketability. But in the end, with the apples looking dented and battered, they were forced into the cider market.

“So we reluctantly decided to put the apples into cider,” he explained, which in financial terms, is a six-fold reduction in the value of the year’s harvest.

Luckily for Blodgett, he had purchased a “fresh apple” crop insurance policy that had a 50 percent coverage level. Blodgett explains that immediately after the hail incident, he had contacted his crop insurance agent who sent an adjuster out to the orchard within days. “The adjuster did a preliminary determination, but there would not be a final determination until final harvest,” he explained. “It’s a nail biter right to the very end, since you don’t know how bad things are going to be right away.”

But this wasn’t the first time he had looked to his crop insurance policy for a lifeline.

Blodgett explained that he took over the business from his father shortly after they had a large fire in their storage facility, which was full of apples. “The facility burned down, and that was the start of some very lean years,” he said. And although his father had always shied away from crop insurance, Blodgett decided that he needed the risk protection it afforded.

“I purchased a crop insurance policy in 2004, when things were pretty lean and we couldn’t withstand a lot of loss,” he said. “We were stretched very thin at that time.”

Coincidentally, that also happened to be the first year they experienced a large hailstorm, which stole their harvest and would have left them in very desperate times. “Without a doubt, when that first hail storm hit in 2004, we would have been knocked out of business for good,” he said.

“My father had never purchased crop insurance but thankfully I had decided to,” he said.

“Without crop insurance, I wouldn’t own an apple orchard right now,” he says. Blodgett explains that while crop insurance has kept his family in business, it has also had a positive “trickle down” effect on many of the areas businesses, where he buys his crop protectants, fertilizers and equipment. “If we went out of business, it would impact a lot of people,” he said.

Blodgett notes that crop insurance is essential for his business because even if you get a damaging storm at the beginning of a season – and your lose your entire crop – you still have to spend the money to take care of the trees and manage the orchard in preparation of next spring’s crop. “Even when we lose the crop early in the year, as we have done in the past, we still have to maintain the orchard for the rest of the year,” he said. “Otherwise, your orchard will be a mess the following year.”

And despite the disappointment of sending his whole 2011 crop into the cider market, Blodgett is still farming this year, hoping that what started off as an “iffy” year with a late freeze will still produce a respectable, and marketable, crop.

“Things are looking up, although we have some damage and loss, “ he says. “But this year, we will have a fresh crop of apples to sell.”

“It could be better, it could be worse.”

CROP INSURANCE IN ACTION: Mike Garavaglia, Vero Beach, Florida

Florida accounts for roughly 70 percent of the U.S. annual production of citrus, of which the vast majority goes into processing, mostly for orange juice. Citrus is big business in the Sunshine State, and Mike Garavaglia is one of Florida’s many citrus growers who make their living putting fresh citrus on the tables of America’s families.

Mike and his family own and operate 4,000 acres of citrus groves, which have been in the Rogers family for four generations. The family’s business, known as “The Packers of Indian River,” specializes primarily in fresh citrus for consumption – producing oranges, tangerines and grapefruit.

The family’s groves are geographically diverse, spanning three counties on both the east and west coasts of the state, but geographic diversity doesn’t always protect you from the whims of Mother Nature. “We have manageable and unmanageable risks,” says Garavaglia. “We try to eliminate as many of the preventable issues as possible, which include insect damage, bacterial and fungal diseases that attack the tree and crops.”

But what they can’t manage are large weather events like hard freezes, hurricanes and floods. Garavaglia has seen his share of natural disasters, with three hurricanes hitting the groves in 2004 and 2005 — at a time when the groves are especially vulnerable. “By the time August rolls around, you’ve invested about 90 percent of your care taking in the crop, and you are keeping your fingers crossed and hoping for a good harvest,” he said.

But nothing can really protect a grove, or the fruit on the trees, from a hurricane. “The fruit is too immature to harvest, and it’s very susceptible to high winds,” he adds. That’s where crop insurance comes into play. Garavaglia purchases the maximum buy-up of multi-peril insurance, “because over the years, that’s what has proven to work the best for us,” he says.

When a hurricane blows a good portion of the ripening crop onto the ground, “the fruit is shot,” he says. “And if the winds are high enough, it can take the trees years to recover from the damage.”

Another major threat to Florida’s premier citrus industry, and one that made its presence known in 2011, is a “hard freeze” – periods when temperatures go below 28 degrees for four or more hours. This can not only rob a grower of their harvest – which is their income for the year – but can kill the grove as well, if the freeze is long and hard enough.


“You can do everything humanly possible to mitigate the damage during a freeze, but you certainly can’t stop it,” he said. Garavaglia says that in the winter of 2010 and 2011, his groves endured three nights of temperatures that were as low as 22 degrees.

“When a freeze is on the way, growers spend a significant amount of money to prevent damage by flooding their groves and installing micro-jet irrigation to mist the trees,” he says. “But when it gets so cold for so long, as it did in 2011, you just know that there is going to be some major damage to the crop, or the trees, or both,” he said.

Unlike other weather events, it’s really impossible to assess the extent of the damage of a hard freeze for weeks, or even months. That’s because when those long, cold nights are finally over, it can take several weeks before the fruit starts to drop. “Initially, we lost about 20 percent of the crop on the ground,” he said. “Done.”

And then over the rest of the season, every box that is brought in has to be specially inspected with samples removed to ensure that parts of the fruit were not dried out from the freeze. ”Even if it stays on the tree, half of what’s remaining can be completely dried out and not marketable,” he notes.

Garavaglia explained that crop insurance is different with citrus than with row crops in the Midwest because it can take months to fully assess the damage.

“Within several weeks of a deep freeze, an adjuster will visit the grove, and he can spend weeks there going through the damage,” said Garavaglia.

“Fruit can continue to drop for two to three months, which means the adjusting can take months before it is complete,” he explains. But even then, the adjuster is often tasked with checking back after harvest to see if any more fruit was lost during inspection. “Because of the length of time it takes to assess the damage, claims can take months to finalize,” he said.

Garavaglia recounted a crop insurance vignette from a decade ago that demonstrated the critical role crop insurance plays in helping growers bounce back from adversity. The family had purchased another grove and had closed on the deal in August. In late December/early January, they were hit with a hard freeze and lost nearly 60 percent of the crop immediately. “You put your whole life savings into a crop every year, and to completely lose a return on an investment, it could wipe you out,” he said.

“If we didn’t have crop insurance, we would have lost the grove.”

Garavaglia says that while crop insurance doesn’t replace a harvest, it’s a critical tool for growers to mitigate some of their biggest risks. “Crop insurance pays for about 65 percent of what it takes to get a crop to market,” he says. “Nobody is making a profit on crop insurance, but it’s a great way to provide some risk mitigation on things we can’t control,” he added.

CROP INSURANCE IN ACTION: Cash Ruane, North Clarendon, Vermont

It’s perhaps no great coincidence that Ben and Jerry’s Ice Cream was founded in Burlington, Vermont, given that dairy is the Green Mountain State’s largest agriculture industry. Cash Ruane, from North Clarendon, Vermont, is one of those Vermont dairy farmers.

Cash has been farming his whole life, starting his own farming business with his beloved wife and business partner Karen in 1992. Together, the Ruanes milk a herd of 75 dairy cows with an additional 90 calves and breeding stock. In addition, and primarily to keep the cattle fed, the Ruanes raise about 160 acres of corn, used mostly for silage, as well as hay, used for feed.

On a good year, the Ruanes can raise enough corn to make all of the silage they will need for the year, plus sell some to neighbors. Ruane says that 2011 was looking like a great year. “My corn crop was doing super, and I already had two cuttings of hay,” he explains, adding that he usually gets four. The promising corn crop and adequate hay supply would mean that the Ruanes would not only have enough feed for their farm for the year, but some to sell to the neighbors as well.

The Ruanes had never experienced any major natural disasters. The main source of adversity and risk on their farm was milk prices, which “fluctuated too much and too often” for most farmers’ taste.

But 2011 was going to prove to be quite the unusual year for the duo, when the arrival of Tropical Storm Irene, turned Otter Creek, which runs right through their farm, into a destructive and wild torrent.

When Hurricane Irene was downgraded to a tropical storm, many in New England thought they had dodged a bullet and would get by with some wind and a few showers. But Irene was big a storm that moved very slowly, dumping record amounts of rainfall in a very short period of time on a very rugged part of the country.

Hours after the rain began, Ruane looked out the window of his house to check his cornfields. “All I could see were the tassels of the corn,” he said, as a wall of water rushing down the mountains had swallowed the entire field.

Sometimes flashfloods do not spell doom for corn crops, if they are short in duration and not too deep. But in this case, water came, it came deep and then it refused to leave. “The water did not recede for four and ahalf days,” said Ruane. At one point, the rising water was approaching a barn full of cows, which required immediate rescue. “Luckily, we got the cows out in time,” he said.

When the water finally left, the couple realized that in addition to losing their entire corn crop for the year, they probably would not be able to cut hay for quite some time, due to the silt and debris left in their hayfields. “We lost about 35 to 40 percent of both our third and fourth cutting of hay,” said Ruane. “Which we knew was going to leave us short on feed for the dairy cows for the approaching winter.”

And while there was actually corn left standing despite the rapids that cut through the field, it was soaked to the point that it was ruined. “As time went on, some of the corn just molded and rotted right on the stalk,” he said. Adding, “surprisingly, some of the corn was so waterlogged that it actually sprouted, right on the cob, standing there in the field.” The crop was a complete loss.

Thankfully, Ruane had purchased crop insurance, as he always does, and immediately called his agent when the angry waters left his property. The crop insurance adjuster quickly assessed the damage and the payment soon followed. “I had my indemnity payment within 10 days to two weeks,” he said. “I was impressed, because I was expecting two to three months,” he said.

Unfortunately for the Ruanes, while a crop insurance indemnity can help a farmer get back on his or her feet, it doesn’t replace the income that you would have gained had you sold a bountiful harvest in a good market. “I lost so much feed, I had to borrow money and corn throughout the winter to feed the dairy cows,” he said.

“This was the first time I ever had a claim,” he said. Ruane used his crop insurance indemnity to pay off his 2011 lines of credit, which allowed him to borrow for his next year’s input costsand plant again in 2012. The indemnity, along with help from local charities for farmers and townsfolk who had lost so much in the flooding, helped the Ruanes weather the storm and come back again this year to farm.

“I was really impressed with the generosity of the public, even people I didn’t know and will likely never meet, who extended us a helping hand,” he said. “And my crop insurance indemnity, which allowed us to keep our dairy running for yet another year.”


NCIS Adjuster Schools in Action

2011 Midwest Flood Disaster

Crop Insurance 101

Tom Zacharias, President of NCIS, explains the basics of crop insurance.

Financial Safety Net for Farmers

Weather Woes in North Dakota

Challenges of Life in Farming

Insurance for Input Costs

Advance Marketing Pays Off