Deadline Approaching for Grain Quality Crop Insurance Claims

December 23, 2009 at 7:18 pm

The following article was written by Mike Gastier and appeared in the December 22, 2009 edition of the newsletter.

Corn growers who utilize crop insurance coverage and have a significant portion of their 2009 crop in private storage have a very powerful risk management tool at their disposal if they act quickly. December 25, 2009 is the deadline to initiate a grain quality crop insurance claim for the 2009 corn crop according to Bill Lund, Crop Insurance Agent and partner in Lund and Smith Insurance Services of Huron County, Ohio. Once the deadline passes, producers assume the risk of inferior grain quality even if they purchased crop insurance.

In most marketing years producers have some peace of mind that the grain stored in their bins will maintain reasonable quality under good management. This is not a forgone conclusion this year, because in many cases producers didn’t know the quality of the grain that they placed into storage. Lund suggests that by initiating a grain quality claim prior to December 25, 2009 an insured producer can take up to 60 days to complete the claim. The next 60 days may prove very important in telling how the entire vomitoxin issue plays out during this marketing year.

Here is a scenario that is not so far fetched. A corn producer in Ohio had a record corn crop in 2009. He sold 40% of his crop right out of the field to a terminal that was not testing for vomitoxin when he delivered his corn before Thanksgiving. After New Years Day, that same producer loads his truck to begin filling January contracts. Upon arrival at the terminal, the producer realizes that the buyer is now testing for vomitoxin. His load proves to be above the terminal’s acceptable levels and hence is rejected. Short of finding another buyer, this producer is without good options because he no longer has any grain quality coverage through crop insurance since he had not opened a claim prior to the deadline.

This situation can be avoided. If there is any doubt about the quality of the grain stored on your farm, contact your crop insurance agent immediately and initiate a grain quality claim. Should your grain prove to be of good quality you can release the claim without a detrimental effect to your crop history. This strategy keeps your options as a seller open as long as possible.

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