Is anybody else looking forward to putting 2023 in the rearview mirror? The recent farming year posed challenges for us and numerous other farmers in our region. We experienced a severe ongoing drought and summer storms that brought the “great white combine” of the sky – hail. In our area, numerous fields lack water for irrigation, making us dependent solely on rain. This reliance on precipitation makes it challenging for crops to grow and produce when there is a lack of rainfall. You might wonder what happens when it doesn’t rain or a storm comes through and wipes out our crop for the year; that’s where crop insurance comes in. Like choosing to carry homeowners insurance, many farmers purchase insurance policies for their crops and livestock.
The crop insurance program is a federally administered program that was started in the 1930s and expanded in the 1980s. Approved insurance providers sell and manage insurance programs for farmers and ranchers. Like homeowners insurance, farmers can “shop around” with different insurance providers to find one that fits their needs best or has the best rate. Farmers also must choose what level of coverage they want and any add-on options they want, like hail coverage. As with homeowners insurance, farmers pay a premium for their coverage and hope they don’t have to use it. This year, we were not so lucky and had to submit two different claims to our insurance company, one for hail and one for drought. After we turned in the respective claims, the company sent an adjuster to inspect our crops and assess the damage. The soybean field, impacted by hail, was evaluated to be 65% damaged but capable of producing a crop.
In contrast, the corn field struck by drought was deemed 100% damaged, with no opportunity to yield a harvest. As a result of the extensive damage, the crop insurance companies will compensate you up to the coverage level for which you paid. If a hailstorm came through and ruined your home’s roof, your homeowner’s insurance would cover a certain amount for your new roof. While the insurance coverage doesn’t cover all of our costs, it does cover sufficient expenses to sustain our farming operation for another year.
Investing in crop insurance may seem like a substantial expense in years when it goes unused, but it proves its worth when a major catastrophe occurs. We were grateful for the crop insurance program this year, but we look forward to a better 2024 growing season where, hopefully, its use won’t be necessary.