The crop insurance deadline for corn and soybeans is March 15th. If you fail to pay for those spring crops’ insurance policies by the sale closing date, your insurance provider will report your ineligibility to the USDA Risk Management Agency (RMA). Once your SSN or EIN is listed in the RMA’s Ineligible Tracking System, you (as well as any Substantial Beneficial Interest parties you may have) will become ineligible to purchase crop insurance for at least one crop year.
To put it more directly: If you don’t pay for crop insurance by March 15th, the federal crop insurance system will not compensate you in the event that adverse weather or another disaster causes partial or total loss of your crops!
Why Do You Need Crop Insurance?
An agricultural producer’s livelihood depends on the viability of relatively fragile plants. However carefully you may tend to your crops, a single unpredictable weather event may flatten all of your hard work in a matter of moments.
Iowan farmers are no strangers to weather that kills crops. The Hawkeye State ranks eighth in the country for hail damage and seventh for number of tornadoes, and has a high incidence of derechos as well. For example, consider the tornados and severe storms which racked 10 counties throughout the lower half of Iowa in March, 2022. The USDA made technical and financial assistance available to farmers and livestock producers – but only parties which had active crop insurance policies were eligible to receive them. It’s little wonder why 90% of corn grown in Iowa is insured.
Which Crops Does Crop Insurance Cover?
We mentioned corn and soybeans at the beginning of this article because they are Iowa’s two largest cash crops. Almost two thirds of the land in Iowa is solely dedicated to growing those two crops. But crop insurance is available for over 100 different crops including apples and potatoes, as well as livestock such as hogs.
Crop insurance is not available for some crops in certain geographic areas. For example, if you attempt to grow coffee in Iowa, the federal government will not condone your foolishness by insuring your coffee trees.
What Types of Crop Insurance Are There?
Multiple peril crop insurance (MPCI) is the most popular type of crop insurance. Over 90% of American agricultural producers have an MPCI policy which protects them against loss resulting from natural disasters such as hail, frost, wind, drought, fire, flooding, blight and insect swarms.
Agricultural producers who operate in areas where hail poses a significant threat to crops may additionally purchase crop-hail insurance. While MPCI does cover for hail, crop-hail insurance’s better protection against opportunity loss means that it offers a better way to manage the risk of profit loss.
Crop revenue insurance may also be purchased in addition to MCPI. Instead of an adverse weather event, a crop revenue insurance policy goes into effect when the producer has a poor yield or the market price for their crop is abnormally low. The producer’s previous annual earnings are used to determine the appropriate amount for reimbursement.
How Fast Does Crop Insurance Pay Out?
The federal government’s interest in providing crop insurance is straightforward: preventing American agricultural producers from going out of business. That is the primary reason why crop insurance pays out more quickly than usual. A policyholder can expect to receive their indemnity check within 30 days of loss verification, which gives them the capital they need to repay loans and operate their farm until they can sow their fields again.
But if a farmer misses the March 15th deadline, they may miss out on the vital infusion of funding they would require to stay afloat in the wake of a natural disaster, act of vandalism or market upset. That’s why we encourage all agricultural producers throughout the state of Iowa to contact the Hoffman Agency today. Whether you have a small family farm or a large commercial operation, our fully certified farm insurance agents are standing by to ensure that nothing can put you out of business.