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Adding hail coverage

STEVE JOHNSON Updated: 06/28/2011 @ 2:44pm Farm Management Specialist with ISU Extension housed in Polk County, Iowa. Areas of expertise include crop marketing, grain contracts, government farm programs, crop insurance, farmland leasing and other crop risk management strategies. Reach Steve by e-mail at sdjohns@iastate.edu.

In the U.S., over 50% of hail storms occur from March to May. However, the largest crop losses to corn from hail occur from June to September.

That’s because early in the growing season, losses are typically limited to leaf defoliation and reduced stand counts.

According to agronomic research, hail losses increase rapidly after the V6 growth stage when the growing point breaks the soil surface. The degree of hail loss depends on the crop growth stage.  Yield losses due to defoliation during this vegetative stage can be estimated, but the stalks may need to be split to determine if the plants are alive.

However, when hail losses occur during the reproductive stage, direct damage to the ear will also need to be considered.  Total corn yield loss from hail is estimated by combining the expected yield loss from stand reduction, direct damage and defoliation.

Hail is a covered peril under federal crop insurance policies. Primary farm-level products for 2011 are Revenue Protection (RP) and Yield Protection (YP).  If a hail loss occurs, an indemnity payment is not triggered until the loss exceeds the deductible under that policy.

In 2011 the corn crop is likely one of the most valuable crops you’ve produced, with current cash prices for fall delivery around $6 per bushel.  Should a mid-season hail storm strike, do you have adequate crop insurance coverage?

Adding Hail Insurance Coverage

Watch the latest For the Farm Manager featuring ISU Extension Farm Management Specialist Steve Johnson.


3 reasons to consider adding hail coverage

First, you’ve accepted a large deductible by limiting coverage to only a federal crop insurance policy that provides multi-peril coverage. Should hail damage occur, the 15% to 35% deductible you’ve accepted (electing a 65% to 85% policy) has never represented more dollars per acre at risk. Net returns to a harvested crop are at extremely high levels in 2011. With profit margins 2 to 3 times above normal, it could be devastating to the operator’s long term future to lose a large portion of this year’s crop.

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