WEATHERCREATING DJ VU SITUATION FOR
PRODUCERSAND CROP INSURANCE PROVIDERS

Friday, June 8, 2007                                  By Shawn Wade

      Recent volatile weather hascombined with the 2007 growing season's wet and cool start to complicatecropping decisions for cotton producers and crop insurance providers.

      Recent thunderstorms whichbrought locally heavy rainfall, hail and high winds have damaged a significantnumber of cotton acres on the eve of their federal crop insurance finalplanting dates.

      For many growers the impactof recent weather is very similar to the situation they found themselves induring the 2005 growing season and brings on a strong feeling of dj vu.

      As happened in 2005 multiplestorms have crisscrossed the area practically on top of the crop insurancefinal planting dates in the effected areas. Just like 2005 the currentsituation makes growers unsure of their options going forward and leaves cropinsurance providers responsible for making decisions about how they will dealwith damaged acres.

      To help answer some of thequestions involved, Lubbock-based Plains Cotton Growers contacted the USDA RiskManagement Agency to revisit the rules governing the decision-making process anapproved insurance provider (AIP) will go through to determine when it ispractical to replant damaged stands and when acreage will be released toalternate uses.

      As in 2005, RMA officialsnote the "practical to replant" determination is the responsibility of theapproved insurance provider and that current insurance program rules do notspecifically require, or create an expectation that, a producer replant damagedstands beyond the final planting date for their county.

      This year AIP's seemsimilarly challenged to determine when it is not practical to replant a damagedstand, even though much of this year's uncertainty is being fueled by the sameconcerns that triggered consultations on the issue between RMA and AIP's in2005. AIP's should be able to utilize the knowledge they gained in 2005 to moveforward with the process of evaluating and releasing damaged stands this yearsince many of the same conditions exist.

      Based on the feedback PCG hasreceived from RMA, AIP's should be making replant determinations on acase-by-case basis and can take into account a variety of circumstancesincluding the amount of growing season remaining until average frost/freezedates and field conditions to make these decisions just as they have in thepast.

      By and large the same rulesand definitions that concerned AIP's in 2005 are still in force. One changethat has come to light, however, is a requirement that documentation supportingthe AIP's determination that it is not practical for a producer to replant beincluded in the producers file when acreage is released to other uses and a lossclaim is processed.

      In an attempt to provideExtension personnel, cotton producers and AIP's with information detailing thecurrent crop situation and prospects for late planted cotton based on long-termaverage weather patterns, PCG consulted with Texas Cooperative Extension andExperiment Station personnel at the Lubbock Research and Extension Center anddeveloped a situational overview of the 2007 growing season.

      Cotton growers, Extensionpersonnel and AIP representatives interested in obtaining a copy of thissituation report can download a portable document format (PDF) version from thePCG website (www.plainscotton.org). Just click the "2007 Crop Situation Report" link to viewor download the document.

      RMA reminds growers that whencrop damage occurs before the applicable final planting date they do have anobligation under the crop insurance policy to try to plant and/or replant cropsuntil the final planting date whenever possible.

      For growers that decide toreplant stands before the final planting date or during the late plantingperiod it is critical that they obtain permission from their AIP to destroywhat remains of the original stand and replant those acres to the same crop.Failure to obtain an AIP's approval could result in a loss of coverage forthose acres.

      For growers that incur damagefrom hail or other causes it is appropriate that they contact their insuranceprovider to notify them of the loss and to schedule an evaluation of the damageby a loss adjuster. Such appraisals, especially those triggered by a hailevent, are typically delayed at least 7 days from the date of loss so that amore accurate evaluation of the crops potential to recover or survive can bemade.

 

NEW2005-2006 DISASTER PROGRAM CALCULATOR
AVAILABLEFOR DOWNLOAD FROM PCG WEBSITE

Friday, June 8, 2007                                  By Shawn Wade

      Growers wondering how therecently passed 2005/2006 agriculture disaster assistance package will impacttheir operations can now download an updated version of the popular TexasCooperative Extension/Plains Cotton Growers, Inc. Multi-farm/Multi-cropDisaster Calculator.

      The updated DisasterCalculator is available for download from the PCG website (www.plainscotton.org) and from the Texas CooperativeExtension South Plains Farm Assist website (tceblogs.tamu.edu/mt/spcu).

      Producers are advised to usethe new calculator as an estimation tool only and to check the Farm Assistwebsite or the PCG Home Page regularly for updated versions once a betterknowledge of the rules is available.

      The calculator can providegrowers a clear picture of which farms or units will qualify for the CDP,estimate how much benefit they are likely to receive and help identify recordsneeded to complete an application should the FSA database be incomplete.

      Like past CDP programs, muchof the information producers need should available to FSA personnelelectronically, but it is always a good idea to have back-up copies ofinsurance and production information just in case there is a hole in the dataFSA received.

      By taking the time to runthrough their information before getting to the FSA office, growers can quicklyidentify and fix incorrect information and verify that no eligible farms arebeing inadvertently left out due to incomplete information.

      Texas Cooperative ExtensionRisk Management Specialist Jay Yates of Lubbock provided this year's update.Jay has updated the highly popular disaster program calculator originallydeveloped in collaboration with Plains Cotton Growers, with statewide countyaverage yields and the prices that will be used by FSA to calculate 2005/2006CDP benefits.

      The Multi-farm/Multi-cropcalculator will allow losses from cotton, corn, sorghum, wheat and peanuts tobe put in by crop insurance unit and then estimate total CDP benefits acrossmultiple units.

      Due to the wide variety ofbusiness structures out there, the new calculator does not attempt to quantifythe effects of the $80,000 payment limitation that is part of the 2005/2006 CDPprogram, although it will estimate the effects of the 95 percent benefit cap.

      To use the calculator agrower should first determine the loss year for which they want to estimatebenefits. Growers can then input what crop was produced, the county where thecrop was grown, whether the unit was irrigated or dryland, verify if the cropwas insured or not and if it was carried to harvest.

      In addition to theinformation outlined above, growers will also need to have the followinginformation to estimate CDP benefits: Actual Production History (APH) yieldused to determine the insurance guarantee for each qualifying unit; Harvestedproduction or amount of cotton counted against the insurance guarantee in theyear of loss; Planted acres for each qualifying unit; Share of production(percent); Gross insurance indemnity for each qualifying unit; and, the Cropinsurance premium paid on each qualifying unit.

UPLANDCOTTON AVERAGE PRICE RECEIVED
BY GROWERSTHROUGH APRIL 2007

Friday, June 8, 2007                                  By Shawn Wade

      CumulativeUpland cotton marketings through April 2007 total 11.856 million balesaccording to information released May 31 by the USDA National AgriculturalStatistics Service.

      Accordingto USDA estimates, April 2007 cotton marketings totaled 1.155 million baleswith an average selling price of 47.3 cents per pound. So far the 2006 UplandCotton Weighted Average Price calculated through April 2007 stands at 47.73cents per pound, slightly below the 47.77 cent weighted average price calculatedthrough the first eight months of the marketing year.

      Thefollowing table shows the average price received each month by farmers and theassociated weighted average price based on prices and cumulative marketingsfrom August 1, 2006 through April 30, 2007.

 

Average Price Received for2006-crop Upland Cotton

(Weighted by Marketings)

 

 

Marketings

Prices

 

(000's of Running bales)

(cents/Lb.)

 

Monthly

Cum.

Monthly

Weighted

August

1,970

1,970

45.80

45.80

September

182

2,152

47.30

45.93

October

994

3,146

46.10

45.98

November

1,117

4,263

47.60

46.41

December

2,062

6,325

49.30

47.35

January

1,557

7,882

49.70

47.81

February

1,253

9,135

48.00

47.84

March

1,566

10,701

47.40

47.77

April

1,155

11,856

47.30

47.73

May

na

na

45.20*

na

Source: National AgriculturalStatistics Service; * = preliminary

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