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.

Staying the course

By Devin Schierling, Grain Marketing Coordinator for TMA

 

Chaos at every corner! Webster's Dictionary describes chaos as, "A state of utter confusion or disorder; a total lack of organization or order".  This sums up the feelings of a vast majority of producers throughout the United States.

Producers are feeling psychological, environmental and emotional pressures that have the potential to unleash total chaos on their farms.  Whether it's the einvironmental pressures of rainfall and temperature, the psychological impact of making purchasing/selling decisions or the emotional effect of the past year's growing season, producers are looking for ways to eliminate the chaos in their life.

In times of chaos, people look for a magic solution that will cure whatever ails their operation.  The solution comes in multiple forms.  Some people will pay a marketing consultant that guarantees them their grain will be sold at the high of the market while others will choose to buy private insurance to insure against a specific peril.  These products, by themselves, have very litte impact on the bottom line of a farming operation.  However, when used in conjunction with a profit/revenue based marketing approach they can greatly improve the operation's profitablity.

It's important to remember to stay the course and not attempt to manage individual events that are out of your control.  Stay focused on the overall profitability of your farming operation.  By being mindful of your crop input expenses, using crop insurance to insure potential revenue and grain marketing programs to maximize profitability, you can stay the course and insure the profitability of your operation regardless of the chaos that is around the corner.

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.

Returning to the farm

By Kathy Hanks, Freelance Writer for MKC

The statistics can be grim. There are fewer farmers every year as young people pull up their rural roots for a future anywhere but on the farm.  Even current USDA statistics show that more than a third of U.S farmers are 65 years old or older, and half of the current farmers expect to retire in the next decade. Across the U.S. only five percent of principal farm operators are under the age of 35.

But around central Kansas there are young, determined producers who believe their family farms are worth saving.  After college they headed back to the fields where they first learned to drive a tractor sitting on their mentor's lap. 

Growing food, raising livestock, living surrounded by nature on the land their descendents first owned, gives their life purpose. But, they also depend on family for their support and the modern technology provided by Mid Kansas Coop.

Local marketing

Jason Gaeddert wouldn’t describe his return to the family farm, near Buhler, as following a dream as much as sticking to a plan that has been part of his life.

Today, at 40, he farms with his father John, Uncle Leon, and his cousin, Phil Burckhart. Some of the ground was the original farm first planted by Jason’s great-grandfather.  Today Jason can stand on one spot of land and be in Harvey, Reno and McPherson County.

Jason was always riding along on the farm as a child, and by the time he was 10 he was driving a tractor.

“They would open the field for me and turn me loose, and then come back when they thought I would be done,” said Jason. “I enjoyed what I did, but was probably undecided about farming up through high school.”

Growing up he recalls his grandfather and father hauling their crops to MKC elevators. He’d ride along, but never gave the coop much thought. 

But even back then he began to understand the marketing side of ag, selling sweet corn at stands around the area.  “It was a little extra summer income,” Jason said. Working with his cousins, the sweet corn venture has grown over the years.

After graduating from Kansas State University with a graduate degree in agronomy, Jason headed to western Kansas where he worked for Monsanto.

“I wanted a chance to experience something else before I made farming a life-long career,” Jason said.

 

Things moved quickly and by 2000 when he returned to the farm, technology was rapidly advancing in agriculture.

  

Now, a decade later he is relying on the expertise and services of MKC to help him be more successful in his operation. 

He feels it’s important to stay current on the latest advances in agriculture.  During the winter months when things slow down on the farm, he will attend meetings and seminars, some sponsored by MKC. He also looks to his elders for advice, especially during the current season.

 

 “This is my first bad drought,” Jason said. “My dad remembers the 1980s and some of the older farmers remember the 1950s.”

   

He is learning that it’s cyclical, and he is learning the importance of knowing how to manage in good times and bad. What has been beneficial is utilizing risk management tools, including locking in a profit and ensuring there is crop insurance.

MKC’s President and CEO, Dave Christiansen, noted that the utilization of risk management tools is much more widely accepted by the younger generation. 

“This group generally doesn’t have the equity to put at risk like they will when they’ve been at it a while,” stated Christiansen.  “Our efforts to develop new tools that can help all growers manage risk are another major way the coop has evolved to serve the needs of the grower.”

Younger generations of farmers are utilizing the lessons learned from their elders and implementing them into their current operation. Gaeddert has also learned an invaluable lesson, farmers are optimistic about the future.

“Or you wouldn’t want to stay in it,” he said.

Making it happen

Moundridge farmer Gary Regier has two dreams.

The first is that one of his two sons, Josh or Nick, would return to his farm near Moundridge some day and work alongside him.

The second dream may take several decades to materialize. Gary dreams of farming with one of his grandsons. Currently, Gentry (4), Lantry (5 months), and Mason (1 month old), are all too young to enjoy anything that has to do with agriculture except perhaps a brief ride in the tractor.

Gary’s first dream is becoming a reality as Josh, 30, has returned to the farm. While the first dream is becoming a reality Gary and Josh will tell you they aren’t 100 percent there yet, there isn’t enough ground for Josh to farm full time. So, the Kansas State University agronomist works full time as a crop consultant with CropQuest and helps his dad on evenings and weekends.

 “He’s working into it, acquiring ground,” Gary said.

But for now he must have the full time job. Gary says the work Josh does as a crop consultant compliments their farm, Gary says.

“It works out beautifully with what he is doing as crop consultant,” says Gary. “Josh has brought our farm into a new era with a fresh start and new ideas. I benefit a lot from it.”

However, Gary jokes, wondering if there are times the farm is a guinea pig for Josh’s ideas. But his son has educated ideas.

“I am willing to do this because I have seen him turn ground into highly productive crops,” Gary says.

Josh grew up on the family farm where his great-great grandfather arrived from Russia in 1874 bringing red turkey seed wheat and settling on a section of ground that is still in the family. Farming is Josh’s link to family and his past. Some of his earliest memories were spending time with his dad and grandfather Albert Regier.

Gary still does most the work planting and harvesting wheat, corn, soybeans, and milo. Josh helps in his spare time, often bringing Gentry out to the field with him.

Like his dad and his grandfather, Josh is a member of Mid Kansas Coop. While the name is the same as when Albert Regier was a member back in the 1960s, MKC has evolved just like the ground they continue to farm.

Josh appreciates the ownership he has in the coop.

“It’s good to know when you’re paying bills, a portion is going back to you,” Josh said. “We use the coop for most of our crop inputs, fertilizer, fuel and crop protection products. As well as helping with the marketing of grain.”

Josh says people have to love farming to make it one’s life occupation.

“I can’t imagine doing it only for the money,” Josh said.

Earning his stripes

Four miles south of Abilene Todd Kohman farms his family’s land where he is the fourth generation to live in the same 100 year-old farmhouse.

Todd’s first lesson on the farm came when he was four. His granddad, Henry Kohman, was feeding hay bales to the cattle and told Todd he needed to drive the truck alongside the bunks, while Grandpa stood in the truck bed tossing the bales.

“He told me if I hit the bunk, to just turn the wheel right, and when I got to the end just turn the key off,” Todd said. “I thought it was pretty neat.”

Todd successfully mastered his first farm task, now at 34, the lessons keep coming.

All his life, the farm has been a laboratory for learning, with his dad and granddad serving as the instructors. His father, Leon Kohman, encouraged him to get training off the farm so he would always have something to fall back on if there were a few bad years farming. So Todd attended Kansas State Vocational Training School in Salina and learned auto body work. It’s a trade he still works at during the slow winter months on the farm.

In today’s world, Todd knows he’s lucky.

“I love to farm and this is what I want to do,” he said. “There is no way I could go out and start a farm on my own.” He appreciates the opportunity to work with his father growing alfalfa, wheat, corn, soybeans, and raising feeder cattle.

While there are lessons to be learned, Todd said his dad will “ride him pretty hard.”

“He doesn’t want me to fail,” Todd said, and he respects what his father is teaching.

He also appreciates the knowledge he gains working with employees at MKC.

“I like the way they come up with new programs,” Todd said. He appreciates that the people he works directly with at MKC are close to his age and they can relate to each other.

He’s concerned with farmers who are stuck in their ways, “The ones who say I’ve done it this way for 200 years, and I am going to keep doing it this way,” he said.

Farmers need to adapt and move forward with change and he appreciates that thinking at MKC. He also appreciates that they travel out to the farm, ride along in the fields and talk shop about how he can make certain changes that would help increase his yield and increase their bottom line.

The Kohman’s take advantage of MKC’s soil and tissue sampling and appreciate knowing when they need to up the nutrient levels.

Kohman (at left) meets with Justin Jenkins, Grain Marketer for TMA.

Justin Jenkins, Grain Marketer for Team Marketing Alliance, comes out when Todd is busy and doesn’t just stand around, he helps fill the drills. Then the farmer and grain marketer hop in the tractor and as Todd plants the 2013 wheat crop, Jenkins suggests better ways to market his grains. It’s the same when Jared Miller, his Field Marketer, comes out to take soil and tissue samples.

“They do an excellent job and they are both my age,” Todd said. He likes that there is a mutual respect for each other, despite the fact that they are new to the field.

The kind of service Todd Kohman is coming to expect (or becoming accustomed to) has become the company’s standard operating platform, according to Christiansen.

“We have highly skilled people in every division of the company that call on our producers every day,” Christiansen said. “The primary responsibility of this group is to call specifically on the growers farming so many acres that they don’t have the time like they use to or are less inclined to come into the coop to get answers.  We make it easier for the producer by going to them.”

Christiansen commented that each person will generally have responsibility for 25 to 40 accounts.  “Many companies are doing this today,” stated Christiansen. It’s not really that unusual, but to separate ourselves we have to have the best of the best in these positions and then back them up with superior execution.”