How will the New Farm Bill Affect Crop Insurance Coverage?

By Nichole Gouldie, Communications Specialist

After two years, the 2014 Farm Bill became a law on February 7. Also known as the Agricultural Act of 2014, the law is wide ranging but a common question on many farmers’ minds is how the new Farm Bill will affect their crop insurance coverage.

Recently, Team Marketing Alliance (TMA) hosted informational meetings for producers about how the farm bill actually affects the farm. With guest speaker, Kane Adams, regional marketing manager for Diversified Crop Insurance Services, TMA shared how they have the tools to help producers make an educated decision related to crop insurance included in the 2014 Farm Bill.

“Like TMA always does, they will work from your farm's history to determine your crop insurance needs,” Adams said. “It isn’t a one-size fits all approach.”

Effective for 2014, direct payments, the counter-cyclical payment program, ACRE program and the Sure Crop Disaster program will be eliminated.

“The 2014 Farm Bill’s commodity title requires producers to make an important decision related to crop insurance, whether to sign-up for one of two versions of the Agriculture Risk Coverage (ARC) program or the Price Loss Coverage (PLC) program,” Adams said.

The decision is made for each farm enrolled with the Farm Service Agency. The choice of program is a one-time decision to be made by a deadline not set currently. Adams estimates this sign-up not to be until late fall-winter or early 2015.  “The decision cannot be changed during the five-year life of the 2014 Farm Bill”, Adams said. “This is why it is very important for all TMA customers to work with their crop insurance specialist to make an educated decision about the two programs that is best for their operation.”

For producers just now learning about these crop insurance coverage options, TMA Crop Insurance Specialist Danny Flynn says the positive is you don’t have to make a decision today about the programs. “We have some time to make the decision and TMA has the tools and knowledge to help you make this decision.”

To learn specifically about the ARC and PLC programs, click here.

Kane noted while federal crop insurance saw an increase in the budget of $6 billion, most areas of the farm bill were cut in dollars. The budget was reduced by $23 billion total with cuts of $9 billion in the Supplemental Nutrition Assistance Program, commodity programs reduced by $14 billion and conservation lost $4 billion. He also commented food stamps and nutrition are nearly 80 percent of the 2014 budget.

Josh Roe, economist with the Kansas Department of Agriculture, has shared an overview of the 2014 Farm Bill and some of the impacts the bill will have. Click here for a fact sheet about the 2014 Farm Bill and here for a summary and impact of the bill put together by Josh Roe.

To learn more about crop insurance coverage or the 2014 Farm Bill, contact a TMA crop insurance specialist today.

Helping Farmers Manage Risk

By Nichole Gouldie, Communications Specialist

Risk is an unavoidable element in the business of agriculture. Production can vary widely year to year due to unforeseen weather and market conditions, causing wide swings in commodity prices. But risk, while inevitable, is often manageable.

Following a storm this past June, McPherson area farmer Dennis Friesen saw green snap damage like he had never seen before. After the area received 80-90 mph winds, he soon discovered the risk management decisions he had made with TMA and MKC were bound to improve his return on his investment.

After looking over his fields following the storm, Friesen immediately called his TMA Crop Insurance Specialist, Danny Flynn. Within three days, the totaled corn field was chopped and a short-season corn was planted. “Very quickly Dennis was able to collect insurance, protect his revenue and pursue another crop,” Flynn said.

Once he received word the corn crop was 70 to 80 percent damaged, Friesen worked with Dusty Campbell, TMA grain marketing specialist, to make sure he would be okay on his marketing strategy.

Danny Flynn, crop insurance specialist for TMA, discusses

risk management strategies for 2014 with Dennis Friesen.

TMA provides producers with a multitude of risk management offerings that can be customized to fit their operations. The array of risk management strategies available to producers allows the opportunity to place their attention on making buying and selling decisions based off timing and profitability instead of price.

“There are a number of tools available and widely used to manage the economic, structural and environmental risks of farming,” said Devin Schierling, TMA grain marketing manager.

Schierling says the local cooperative plays an integral role in assisting customers manage their crop input risk, just as the TMA specialist focuses on maximizing revenue through grain marketing and crop insurance decisions.  “This approach allows our producers to focus on the timing of their marketing decisions,” he said.

“Depending upon their needs, producers will have the ability to manage their farm’s risk in multiple crop years by using traditional forward cash contracts, option based contracts, and over-the-counter contracts,” Schierling said. “TMA provides producers with a multitude of risk management offerings that can be customized to fit their operations and grain contracts as the vehicle to help them maximize their revenue potential.”

Although farms vary widely with respect to crop mix, financial situation and other business, timing and looking at trends is the most important part of creating a successful risk management plan. Schierling encourages producers to focus on their farm as an enterprise to allow them to make decisions based off revenue and not from an individual price perspective.

While producers often take the steps necessary to manage their risk, there are times when it certainly pays off and the producer learns first-hand just how important managing risk is to their operation.

Friesen stated it was reassuring to have the specialists there to help make sure he was taking the appropriate steps to make the insurance claim correctly.

“Dusty and Danny worked together, and we worked with Jared Jones right away to check availability of seed,” Friesen said. “I won’t find this type of customer service with other companies.”

While crop insurance is the most ubiquitous risk management tool used by farmers - 86 percent of total planted acres in 2012 were insured – there are other tools many farmers use as well.

“Agricultural practices, marketing and financial strategies are all critical in helping producers manage their risk,” said Jared Jones, MKC field marketer. “The TMA and MKC relationship provides numerous avenues for producers to manage their risk.”

The risk management services at MKC include programs such as MKC’s risk 12-month forward contracting on fuel, crop protection and nutrient products, and the double-crop soybean revenue program.

Friesen says he regularly works with TMA and MKC specialists to manage risk.

According to Jones, the moment a producer decides to plant, the risk management cycle begins. TMA and MKC work together to determine inputs, crop insurance and the ability to market grain.

Friesen stated risk management is a continuous cycle working with his insurance specialist, grain marketing specialist and field marketer. “It all works really well together,” he stated.

 “Every one of our producer’s definition of a successful risk management plan is different,” Flynn said. “Plans will change depending upon the customer’s operation but the focus is always on maximizing our producer’s revenue potential.”

Team Marketing Wins Awards for Excellence

Congratulations to our partners at Team Marketing Alliance (TMA) of Moundridge. TMA was honored for dedication to excellence in customer service at the recent Seventh Annual Diversified Crop Insurance Services Spring Training event.

TMA partners with Diversified Crop Insurance Services to provide risk management tools and opportunities for farmers and farm owners. During this meeting, DCIS recognizes those who have provided outstanding leadership and administration of the Federal Crop Insurance program by presenting awards for excellence.

Team Marketing Alliance and DCIS have worked diligently to ensure that farmers are provided with the most up-to-date information to make the most informed decisions for their operations.

During the three-day conference, attendees networked with other crop insurance professionals from across the nation. They also participated in additional training that will enable them to even better assist their customers.

TMA's Crop Insurance Specialists earning recognition include David Yenni, Lindsey Wilson, Mardee Hollenbeck, Nick Levine, Steve Hughbanks and Danny Flynn. 

Team Marketing Alliance, located in Moundridge, is an independent agency for Diversified Crop Insurance Services. The agency phone number is (620) 345-3560.

MKC's internship program provides value in careers

By Cassie Wandersee, Staff Writer

Internships are an integral part in attracting the best and brightest individuals, and their ideas, to MKC and their partner in business, TMA, in order to better serve their customers.
 

“I think one of the benefits for producers is the talent and raw knowledge that an intern can bring to the table,” said Jeremy Peterson who completed an internship in the summer of 2010. During his internship Peterson was able to work in several different areas of the company including agronomy and grain.

 

Now looking back on his experience, Peterson recognizes the value it offered to him as well. "As a student going into the workforce it makes a huge difference having real world experience," stated Peterson.  "A structured intern program such as MKC's gives people a chance to 'try before you buy' when making those career path decisions."

MKC and CHS to build grain shuttle loader in Canton, Kan

 By Kerry Watson, Communications Specialist

The boards of Mid Kansas Cooperative (MKC), a full-service cooperative founded in 1965, and CHS Inc., an energy grains and foods company and the nation's leading farmer-owned cooperative, have approved an agreement to form a limited liability company (LLC) to build and operate a high-speed shuttle loading facility in Canton, Kan.

Construction on property currently owned by MKC is expected to begin spring 2013 and be completed in about 12 months.  Located on the Union Pacific rail line, the grain shuttle will load 110-car trains bound for export facilities in the Pacific Northwest and the Gulf Coast and Mexico.  Upon completion, on-site storage will be in excess of 3 million bushels.

Return of funds in MF Global bankruptcy to be priority

Producers and business people from across the United States submitted testimony this past week before the Senate Committee on Agriculture, Nutrition and Forestry about the effects of MF Global’s bankruptcy filing.   CJ Blew, Castleton-area producer and MKC’s Board Chairman, was asked by Senator Pat Roberts to participate in those hearings on Tuesday.

Blew testified that although he did not personally have assets tied up in the MF Global bankruptcy, he was impacted.  “I rely upon my cooperative to manage my risk by forward pricing grain and my cooperative is impacted by the bankruptcy.” 

Blew further testified about the amount of time both MKC and Team Marketing Alliance (TMA) spent in the days following the bankruptcy filing trying to understand how and why various adjustments to account balances took place.