Understanding Crop InsuranceIntroductionWhat’s happening – Steve Johnson ARC-PLC Update RECAP FROM EPISODE #11 Reminder that Steve Johnson is a Farm Management Specialist with Iowa State University Extension and Outreach. Has his Ph.D., Vocational Education, Colorado State University, M.S., Agricultural Education/Economics ,B.S., Agricultural Education, Iowa State University and the resident expert on all things Farm Bill.  I’d say maybe 20% to 30% of farmers have figured out ARC/PLC Decisions and are heading to the FSA office. About 50% will do what their neighbors are doing. I think the other 20% to 30% will wait until the deadline (March 2020) and see if it’s extended or just default into whatever they signed up the past 5 years (ARC-CO).Steve’s observations:Always start the ARC/PLC decision with the effective reference prices of $3.70/bu corn and $8.40/bu soybeans.  Will the MYA national cash price for the 2019 and 2020 crop years be below those prices?Use WASDE for 2019 and FAPRI for 2020 MYA national cash prices (see spreadsheet). Please link this Farm Bill Information where we’ve placed the ARC/PLC Payment Estimator, PLC Yield Update Tool and 4 videos if you missed the 80+ public meetings.   I attached a Marshall County farm for a couple crop insurance agents on Friday, Jan. 17th. If a farmer would plug in their own numbers, they can see the interaction of national cash price and county yields.Steve’s assumptions: Thus the low corn prices in 2020 will pull more farmers to the 2-year PLC election, assuming normal county yields. Expect USDA to increase 2020 corn planted acres 2 to 4 million acres at the Feb. 20th Ag Outlook Conference which should lower the 2020 cash price projection below $3.70/bu.Since there likely won't be any PLC payments for soybeans in 2019 and 2020, ARC-CO is the overwhelming choice. Farmers will chose ARC-CO on most all soybean base acres because the projected cash price was not below $8.40/bushel I 2019 or 2020.Since most Iowa farmers will take PLC on corn base acres, they might be interested in pricing Supplemental Coverage Option (SCO) for 2020. To buy SCO, the crop on that farm needs to have elected and enrolled in PLC.  SCO is a county-based revenue product can be added on to the traditional Revenue Protection product. It’s subsidized at 65% federal subsidy that make a relative “inexpensive way” to buy up to 86% total coverage.  There are some drawbacks on SCO:No indemnity payment until June following harvest.You might have yield losses on your farm, but not the county.No prevented planting benefits with SCO.SCO could fit well on seed corn acres since farmers typically buy low levels of coverage.Using Crop Insurance to where it is more than just an expense to your farm.  It doesn’t have to be “just what we have always done……”Guest Blair Brody, Sales Executive for HUB International Limited in Mason City, Iowa.Blair please share with our listeners your background, experience, and a little about HUB International Limited.Could you layout a few of the basic differences in the types of crop insurance available? The basic crop insurance product is government regulated, so what makes each provider different?Are there added coverages?  Could you explain the buy up options?Other products available?What area do you service clients in?For most of your clients (depicted area) what have you been suggesting their product mix look like?What are you most successful clients doing differently than others? With insurance choices….On their farm in general…For the listener out there who has just always doing the same thing or is early on in their farming careers what pieces of advice would you have for them?What would you share with the listener who believes insurance is just a waste of money, throwing premium down the drain?What is your take on achieving self-insurance? What does it take to get there?What are some questions our listeners should be asking