gulfso":2lm9mq3u said:
Update. For those who are in the right areas (Alabama for one) it looks like the pasture insurance is going to be about $2 per acre. That covers a period of about 6 months from February 1, until July 31. Supposed to have a final quote today. This would be for up to a 90% coverage (extreme drought) on the pasture. Payout at that level could be about $28-$30 per acre.
Any ideas on if this is good or would it be just as good to go to the Casino and play slots. Would at least go broke quicker.
Well I haven't had the pasture insurance and don't plan to, but I have had some experience with crop insurance and from my point of view it's not worth the paper it's written on.
First year we had crop insurance on our cotton (when it became mandatory to either have buyup insurance or CAT (same as NAP but for insured crops--$100/crop/county/year) we got 85% buyup coverage on our cotton. We got about 5/6 of the crop harvested and then we got about 6 inches of rain in about three hours-- whole field had about a foot of water standing on it, and it rained again about 3 inches a few days later, and then rained an inch or two a few days later, and then another inch or two a few days later AGAIN, and the seed sprouted in the cotton bolls. (I had NEVER seen that, though Grandma said she had seen it once as a kid). Of course the cotton was ruined and I called the insurance agent and he asked how far along we were, and when I told him we were about 5/6 done he said,"Oh well, I'm sure you're over your minimum, so they won't pay you for that last 15% anyway, even though it was a total loss. They figure it 85% of your acreage, times 85% of the historical yield (not the actual yield which was pretty good so that was a LOT of cotton lost compared to the 'official historical county numbers') times 50% of the price, so basically had they paid anything at all it would have been a pittance. It cost us $860 in premiums for the farm, and the gov't pays another $860 and we got zilch out of it.
I dropped to 65% coverage (2 steps above CAT) and paid like $250 for the coverage, and we had a BAD drought and nearly lost everything, and I got about $300 or so out of it in the end. My agent told me that if I'd had 85% coverage he'd have paid me something like $10,000. Yeah right talk is cheap. Our agent was a really nice guy but he always said 'well if you'd have bought "X" (more expensive policy) I'd have paid you big $$$ but you got "Y" so you don't get hardly anything (no matter how good or bad a policy I bought, it was always the same story).
I dropped to CAT coverage ($100/crop/county/year) at the FSA office and got $600 out of it one year. Fairly decent ROI.
We planted grain sorghum and costs were going sky high on fertilizer/seed/chems/fuel so I got insurance again. Got 65% coverage since grain sorghum isn't as valuable a crop and the insurance doesn't pay off as well as cotton at the higher coverage rates, but the prices are about on par with cotton, so it's wasted money to go too high on the coverage. We had a Gulf Storm come in when the sorghum was starting to boot and it leaned it all over at about a 60% angle. It had been bone dry and the grain never really exerted from the leaves, (the grain heads were down in the leaves instead of up above like they should be) and then it rained a lot and the grain couldn't dry out, and mold started to be a problem. My agent called and said that if I had any loads turn up with mold to stop cutting immediately and call them to come make a determination. Well, I was cutting and hauling to the egg farm between schoolbus routes (I drive morning and afternoon) and one day they were taking FOREVER to do the tests, and finally the little Mexican dude doing the test that didn't speak any English called one of the 'honcho's' (bosses) over and he told me I had aflatoxin B and Zearlinone fungus and they couldn't accept it; I'd have to take it to a regular elevator. I called my agent and he said 'well, go ahead and cut it and keep the weight tickets and we'll figure the dockage later and pay you the difference." So I went on harvesting (because of drought early/wet late it was pretty sorry) and when I finished I called him up to come figure it all out. They sent a company rep (there were SO many claims that year they imported guys from Iowa to do claims adjusting) and he got all my weight tickets and disposition slips and took them to his rental car and sat on the driveway for about 2 hours figuring. I went out a couple times and asked him to come inside (awful hot in TX in August) and he refused, and the inside of his car looked like the blueprints for the dashboard of a 747 with all the charts and graphs and stuff he had out, figuring like mad on a calculator. He came back to the door a couple hours later and informed me that I was going to get an indemnity payment-- for $477. Half yield because of lousy weather, ruined by aflatoxin so I only got half price, and all I get out of the insurance is a lousy $477. To top it all off, I got a bill for the policy about 2-3 weeks after I got the check-- the policy cost me $450. The gov't also pays the insurance company $450, so the company made $900 off me and my tax dollars and all I got back was $477, a whopping $22 more than I put in, after I made only about 1/4 for the year what I normally would...
After that, I swore off insurance for good. It's just a legalized Ponzi scheme, just like my great-grandfather always said, and it isn't worth the paper it's written on, as far as I'm concerned, especially if you're trying to be honest and actually grow a crop.
Around this part of the country, there is an increasing number of 'insurance farmers' that INTENTIONALLY screw up their crops after insuring them to the hilt to make a killing off the insurance payments, never intending to produce a good yielding harvestable crop. I've seen cotton planted a month or more behind all the surrounding fields, intentionally, knowing full well that all the bugs from those other fields are going to eat that one down to the ground and it won't produce enough cotton for a box of Q-tips, just to collect the insurance payments. These kinds of guys know how to work the system and they always seem to get paid big $$$ so they keep doing it. One of my neighbors was telling me their insurance agent, after looking at their fields which didn't have enough cotton to even pay the diesel to pick them, told them they had to pick it and they'd pay the difference. He opened the compressor sheets in the picker wide open and ran it as fast as it would go to pick as little cotton as possible while showing that the field had 'been picked' because whatever they harvested was deducted from their indemnity payment. He also told me how he dry planted just enough seed to show it 'as planted' and planted it so deep nothing would come up so he could claim 'failed acres' and take the payment. SO, if you want to be a crook insurance is a great deal, but for the honest person with a legitimate problem when you're doing your best to make it, it's not much use. I couldn't look at myself in the mirror doing that kind of stuff... Plenty of others can and do though... Shoot nobody here will even bother to harvest their cotton until October anymore. We used to start picking the end of the first week of August most years and be done by the end of August/first week of September. Now guys don't care-- it's insured and so they wait til every last boll is open and defoliate and pick it once and shred it down. We used to scrap at least once, maybe twice, and one good year or two we scrapped it three times (gas was cheap then and cotton was high). Not anymore. One of these days we'll get a Gulf Storm come in like they used to when I was a kid trying to pick and it'll put every last boll on the ground. But they don't care, shoot if a hurricane wipes it all out so much the better; they don't even have to bother getting out there to pick it. Take the insurance payment and run.
That's the way the system is set up nowdays, and an honest man can't make it playing by those rules. That's why I quit row crops (part of it anyway).
That's been my experience, FWIW. OL JR
