Making Farm Program and Crop Insurance Decisions for 2021 (March 1, 2021 Webinar)
With: Brad Lubben, extension policy specialist, UNL; Cory Walters, extension grain marketing specialist, UNL; and Jessica Groskopf, agricultural systems economist, UNL.
The webinar will focus on the role of farm programs, crop insurance (including the new Enhanced Coverage Option (ECO) and marketing for the 2021 crop production year. We will discuss newly finalized crop insurance price information for 2021, as well as marketing strategies and the factors that may impact ARC and PLC programs in the coming year.
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[00:00:35.160]Jessica Groskopf: Well, good afternoon to everybody in the East and good morning to everybody in the West, we still have some attendees rolling in, but I want to thank you for joining our webinar today.
[00:00:45.840]Jessica Groskopf: i'm JESSICA gross cough and nebraska extension educator and regional economist for the pain handle district.
[00:00:52.170]Jessica Groskopf: This is a special session of our extension farm and ranch management teams weekly webinar series, you can find a complete schedule.
[00:01:00.900]Jessica Groskopf: Of upcoming webinars and past recordings at firstname.lastname@example.org we'd like to point out that the rule response hotline remains a great resource for ag professionals across the state, providing mental health counseling.
[00:01:15.000]Jessica Groskopf: information regarding legal assistance financial clinics mediation and more the hotlines toll free number is 1-800-464-0258, we will also have a wealth of resources related to stress and wellness at rule wellness.eu and l.edu.
[00:01:33.960]Jessica Groskopf: Crop producers are facing many decisions about the upcoming production year right now today's webinar will focus on the roles of foreign programs marketing and crop insurance, including the new enhanced coverage option.
[00:01:47.670]Jessica Groskopf: will be discussing the newly finalized crop insurance pricing and address factors that may impact Arc and PLC programs in 2021.
[00:01:58.350]Jessica Groskopf: joining me today are two colleagues of mine in extension.
[00:02:02.010]Jessica Groskopf: brad lubin and corey walters Dr lubin is an associate professor and policy specialist Dr walters is an associate professor and grain economist both work in the university's department of agricultural economics welcome brad and Cory.
[00:02:22.170]Jessica Groskopf: Cory do you want to go ahead and get us kicked off.
[00:02:31.770]Jessica Groskopf: you're on mute.
[00:02:37.800]Cory Walters: There we go.
[00:02:39.840]Cory Walters: Can you see that.
[00:02:43.680]Jessica Groskopf: Yes, do you want to go ahead and switch or start your presentation.
[00:02:47.730]Cory Walters: Yes, we moved around.
[00:02:52.950]Cory Walters: All right, thank you JESSICA for the introduction.
[00:02:56.640]Cory Walters: My name is corey walters we're going to talk about crop insurance here a little bit and some prices so i'm going to start off with the price side and i'm going to switch over to.
[00:03:04.950]Cory Walters: brad and then i'll come back after that and talk about insurance options there, so this year is a particularly interesting year compared to most recent history where we're starting off with with higher the new crop prices and with those higher prices also come a higher implied volatility.
[00:03:24.630]Cory Walters: With this year so.
[00:03:27.450]Cory Walters: This this is going to make everything adjust a little bit substantially compared to what we see so we're going into 458 on corn with an implied volatility, point two, three.
[00:03:37.710]Cory Walters: Last year was like point one five so it means is 1187 and again the volatilities up a little bit so as we go through, as we start this year going forward.
[00:03:48.930]Cory Walters: It is unknown how market prices will evolve throughout the growing season, we have it, we have a lot of.
[00:03:54.570]Cory Walters: reports that come through, particularly the perspective plantings report color was DS and whatever else can can get our market that we can't see coming.
[00:04:05.250]Cory Walters: But we still can say something about where prices may end up this fall.
[00:04:09.210]Cory Walters: So we're going to view prices do the probability lens and this this is going to allow us to put some weight on rare financially devastating events.
[00:04:17.400]Cory Walters: And while we may not like to think about these sort of re or financially devastating events.
[00:04:22.350]Cory Walters: remind you what you were doing, let me remind you what you're doing last year at this time and what we've witnessed with coven impacting us there's there's things can and will happen, we just don't know when.
[00:04:37.560]Cory Walters: This presentation is about you, you have to filter everything to where to where you're located.
[00:04:44.190]Cory Walters: And what you have here is the non irrigated corn insurance based premium rates across nebraska.
[00:04:50.850]Cory Walters: And this is the essentially the base county rate, so the idea here is the smaller than number, the lower the risk or the dark blue would be the lowest risk counties in the in the dark red or the highest risk counties.
[00:05:04.710]Cory Walters: So what if, however you're thinking about decision making, be cognizant of what you're reading and the conditions that those people that are writing that face.
[00:05:13.560]Cory Walters: For example, if I if I was out by were Austin or three lives over here I wouldn't talk very much about it austin's one of our.
[00:05:21.870]Cory Walters: graduate students here in the department, a master student I wouldn't I wouldn't.
[00:05:25.890]Cory Walters: be talking to someone over here, and these counties because of the risk rates are just that much more higher where he's at Okay, the same time, maybe he wouldn't go out West and visit with them about risks, either because they.
[00:05:37.050]Cory Walters: They are different than they should be perceived differently than, then the one I can't get here is your financial risk aware that that okay that's up to you, so everything's got to be filtered by you.
[00:05:48.210]Cory Walters: Okay.
[00:05:50.010]Cory Walters: I said I was going to view this through the probability lens so let's do that so let's take a look at we're a corn futures price exposure.
[00:05:56.550]Cory Walters: So i'm going to take those two numbers are projected price and implied volatility we're going to characterize where prices could end up this fall.
[00:06:02.940]Cory Walters: And then we can identify essentially what your coverage level gives you for price protection and throughout my presentation i'm going to focus typically on price and i'm going to leave yields up to you.
[00:06:14.970]Cory Walters: But, but at least this way can get can get you an idea of what type of price coverage, you have and help unlock maybe what what you protection, you do have a central.
[00:06:25.170]Cory Walters: Okay, so the idea here is, we have we have prices over here on the X axis okay So these are dollars per bushel and here's your projected price of 458.
[00:06:35.010]Cory Walters: And then we have a map in here this red line and that just maps into probabilities so out of this then.
[00:06:41.010]Cory Walters: I can go over here to 85% coverage level and that's that's $3 and 89 cents so essentially take take for 58 multiply it by point eight five so we're holding yield that they're a pH.
[00:06:53.640]Cory Walters: And you have essentially protection of prices dropping below 380 $3 and 89 cents by this fall.
[00:07:01.200]Cory Walters: And the probability of that occurring that event occurring, the price is below is 23% so if we went over here to 389 find that you go up till you hit the red and then go over to be somewhere around 23%.
[00:07:14.280]Cory Walters: probability of that and, as you drop down those coverage levels those keep keep dropping I put a star here by this one that's the one i'm.
[00:07:21.570]Cory Walters: Showing right here okay it's a 75% coverage level, so a lot of variability in prices and there's there are events down here that can trigger or events that could trigger low prices to occur, this fall.
[00:07:34.830]Cory Walters: Just on the price side now higher fall yield so you'll still matter higher fall yields lower the price required for payments to start and then lower yield increase the.
[00:07:45.780]Cory Walters: price for payments to start okay.
[00:07:49.050]Cory Walters: So there's your price distribution also knows there is some upon the upside here there's a there is a less than 1% chance you could be up here in the the 910 dollar range i'm not concerned about that in any sense.
[00:08:00.960]Cory Walters: Because farm survival exists surviving these events down here this up here is a the pay no taxes marketing plan type place we end up here and we've done a lot of for contract.
[00:08:14.100]Cory Walters: let's go to the soybean side similar picture, but, but it is the shape is a little different so let's walk through that that same thing.
[00:08:21.690]Cory Walters: So we're sitting here around 1187 on the projected price, and we have this distribution behind it and we have some low events out here that can that can cause us financial harm.
[00:08:32.040]Cory Walters: And for sent here to 75% coverage level there's there's about an 8% chance of prices could end up below $8 and 90 cents okay.
[00:08:43.620]Cory Walters: brad back to you.
[00:08:48.270]Brad Lubben: corey Thank you and good day to everyone, joining us i'm going to break into korea's discussion or prices, so that we can talk briefly about farm program decisions that producers face and then return it to corey for some relevant discussion of crop insurance decisions as well.
[00:09:08.280]Brad Lubben: So I want to talk about farm program decisions and and remind producers of the upcoming decisions we time this.
[00:09:15.780]Brad Lubben: This webinar today, so that we can address both farm program decisions and crop insurance decisions that are coming up on march 15 deadline here.
[00:09:24.960]Brad Lubben: Remember that for 2021, this is a new farm program decision it's the same Arc versus PLC program decision but it's a new one and it's a one year decision, so we have the opportunity to at least revisit where we're at now and consider what are our best choices are going forward.
[00:09:43.350]Brad Lubben: There are lots of things related to this decision, however, if you choose Arc then that limits your ability and you're unable to purchase seo the supplemental coverage option.
[00:09:55.740]Brad Lubben: However, there, there are still issues relating to the new enhanced coverage option that is available on the top end and so that's available to everyone, regardless.
[00:10:07.200]Brad Lubben: The important thing is we're going to have foreign program decisions and they will in fact couple with sometimes substitute for sometimes compliment crop insurance and marketing decisions as well.
[00:10:19.590]Brad Lubben: Now the challenge with this decision going forward.
[00:10:22.860]Brad Lubben: compared to the previous years that we've we've done this in 2014 That was the last Farm Bill when arkin PLC were first implemented and producers had a one time decision.
[00:10:34.020]Brad Lubben: Between Arc at the county level Arc at the farm level the individual coverage or plc.
[00:10:40.710]Brad Lubben: And overwhelmingly in 2014 producers chose Arc at the county level for corn and soybeans for grain sorghum and wheat, it was much more of a mix between art county and plc.
[00:10:51.780]Brad Lubben: But, fundamentally, there was a much stronger sort of support for for the arc election in 2014 for a decision was was stuck one decision for 2014 to 2018 or 2018.
[00:11:05.430]Brad Lubben: In 20 1900 the new Farm Bill producers had a new decision and, ultimately, it was in the spring of 2020 before we made that decision.
[00:11:13.770]Brad Lubben: And so it was a decision about the 2019 and 2020 crops, we knew how the results in ended up production wise and you saw a jump, particularly in Arc individual coverage.
[00:11:26.250]Brad Lubben: Because we had issues of flooding wet conditions prevent plant accordingly where R ky C made an important role.
[00:11:34.740]Brad Lubben: But we also saw a large shift toward PLC because lower prices over time and meant that the relative supportive arcade gone downhill.
[00:11:44.130]Brad Lubben: I can show that, on the graph here just looking at corn soybeans and wheat prices, the first decision was in 2014.
[00:11:52.980]Brad Lubben: We were coming off of record high prices and those record high prices, meant that the Olympic average was high, which meant that the relative support in the arc county program was was strong.
[00:12:05.130]Brad Lubben: And there was a lot of support, at least in corn and soybeans overwhelmingly to go into Arc in 2019 we had a new decision, but we were under.
[00:12:16.050]Brad Lubben: Multiple years of lower prices and the relative support in our county versus the relative support of the PLC program at the reference price.
[00:12:25.650]Brad Lubben: meant the PLC was stronger and more likely to pay and more likely to support downside risk and less we saw a big shift and corn.
[00:12:34.470]Brad Lubben: somewhat of a shift in soybeans a shift in wheat and grain sorghum as well toward PLC now it's 2021 and we have new price projections.
[00:12:45.690]Brad Lubben: I can't vouch for you were prices went up will try and put Korea on the spot here later, maybe to to peg prices but price projections are starting much stronger and if they're strong enough maybe neither program fundamentally pays.
[00:13:00.630]Brad Lubben: That doesn't mean that neither program or either programs were zero, but let me first give a comparison.
[00:13:07.200]Brad Lubben: The effective reference price that's the that's the reference price for purposes of the PLC Program.
[00:13:13.200]Brad Lubben: Those numbers are consistent there, there is a formula that says those could go up we've not been at high enough prices long enough.
[00:13:20.940]Brad Lubben: to trigger that formula So those are the same reference prices we've had since the Farm Bill passed.
[00:13:26.940]Brad Lubben: The Ark benchmark price is a five year Olympic average, but that is 2013 2015 three 2019 so it's two years wide so, even though we now have higher prices they're not yet ready to trigger into that that benchmark.
[00:13:43.110]Brad Lubben: We have a crop insurance price, it was just established at the end of last week corey said corners for 58 I would that be there, I lifted up wrong or miss type but i've got 459 so except a small discrepancy in our analysis there.
[00:13:59.490]Brad Lubben: And then i've looked at where projected prices could be and i'm going to talk prices so that I can compare our company llc sort of on an equal footing.
[00:14:07.890]Brad Lubben: Remembering that you'll component of Arc is quite critical as well for projected prices, if you have that today's futures bids.
[00:14:16.650]Brad Lubben: I looked at them earlier this morning obvious I can't even vouch that they're still current at this time, but current futures prices are even higher than the February average.
[00:14:27.630]Brad Lubben: If that's a fair estimate of where we go for the season our best current estimate of what harvest time futures prices will look like.
[00:14:37.560]Brad Lubben: And you accept my various sort of back of the envelope analysis that the typical difference between.
[00:14:44.160]Brad Lubben: harvest time future sprays, and the national marketing your average cash price is minus 60 pounds for corn I assume the same for sorghum plus one, Sam for soybeans etc.
[00:14:55.410]Brad Lubben: Then you see my projection of a national market your average price for analysis purposes here not again, not for any sort of predictive quality.
[00:15:05.760]Brad Lubben: I compare that, however, to usda is most recent projected prices for the 21 crop year they published projections during presentations at the usda ag outlook form.
[00:15:18.780]Brad Lubben: In the last couple of weeks, they are higher than they were when they published initial baseline estimates back in November they're not as high as what term futures prices would project, so we can debate about sort of the quality or the likelihood of either of those scenarios.
[00:15:36.420]Brad Lubben: But if you accept those two price scenarios for purposes of analysis it doesn't matter.
[00:15:42.570]Brad Lubben: Where we're at with current prices as long as we're as high as we are neither of those scenarios would envision us triggering PLC payments for the major commodities in nebraska.
[00:15:53.250]Brad Lubben: Even wheat which has been lagging for years with substantial PLC payment rates would be out of the money under the usda baseline exactly at the money Zeroing out.
[00:16:05.220]Brad Lubben: But if you look at the futures price projections substantially other money to trigger a PLC payment under current price expectations might take a 20% price loss on corn and 11% loss and sorghum at 31% price awesome soybeans that's the kind of.
[00:16:25.020]Brad Lubben: Essentially deductible built into the farm program price protection.
[00:16:31.230]Brad Lubben: Yes, there's a benchmark price yes it's constant it offers us continual support if we're treading water below those those references, but given where we're at now there's a substantial deductible before it kicks in.
[00:16:45.510]Brad Lubben: I compare that to Arc and I use the same price projections, and I make assumptions about.
[00:16:52.560]Brad Lubben: Given price level changes relative to the benchmark So if I use usda is number for corn at 420 that's 14% above the 370 benchmarking, if I use the futures price projection and my calculation for 63 that's 25% above the benchmark.
[00:17:12.600]Brad Lubben: If I accept that those price projections are our best estimate what can happen, then, how do I trigger an Arc payment, I have a benchmark price times a benchmark yield times at 6%.
[00:17:25.680]Brad Lubben: It would take an even bigger loss to trigger an Arc payment in fact if corn prices really are 25% above the benchmark.
[00:17:34.560]Brad Lubben: Then it would take a 31% revenue loss from this point going forward price time price yield some combination of weed effective after having better than 30% loss from current expectations.
[00:17:47.910]Brad Lubben: In order to trigger an art painting a 37% revenue loss below current expectations or trigger saving opinion, those are much bigger inherent deductibles them for the PLC program and so you get the sense that PLC deductible was not as big but it's a price only protection program remember.
[00:18:10.770]Brad Lubben: So I try and do a little bit more comparison and maybe this sets the stage to go back to crop insurance here in a bit under the PLC Program.
[00:18:19.530]Brad Lubben: You have your you have no yo protection, you have just a specific fixed payment you, you have hundred percent protection on price sauce is below the reference price.
[00:18:30.750]Brad Lubben: That reference price is 370 that's effectively like having a put option on all of your payment yield at 370 at a national average price of 370 the art program as a benchmark yield times the benchmark price times at six if you're at benchmark yields.
[00:18:49.590]Brad Lubben: Current yield expectations 86% of that benchmark price for corn is 86% of 370 which is 318.
[00:18:58.620]Brad Lubben: that's effectively essentially saying you have a put at 318 far out of the money compared to where we are.
[00:19:05.100]Brad Lubben: Again that's a yield adjusted safety net, so if yields go down it doesn't take as bigger price loss to trigger a payment if yields go up.
[00:19:13.920]Brad Lubben: It would take an even bigger price sauce so you can begin to sort of understand or conceptualize how big that deductible really is.
[00:19:22.380]Brad Lubben: I compare that to the crop insurance choices here, and you know if you're choosing rp at 85% coverage I think corey show that number and that's where it kicks him closer to for an hour corn and.
[00:19:37.380]Brad Lubben: seo, you have the potential coverage above 85% 86 at ECU you have coverage X 90 or 95% all of them offer effectively much stronger price protection assuming.
[00:19:54.060]Brad Lubben: yield expectations, all of them, offer a better a better protection level for price expectations and then do that the farm programs.
[00:20:05.370]Brad Lubben: So you compare those tools for this year, neither Arc nor PLC really as expected to pay.
[00:20:10.680]Brad Lubben: The best budget scenario would would project them in the case for zero dollars each.
[00:20:18.120]Brad Lubben: PLC will tend to pay more and pay more often under any sort of probabilistic analysis, but neither of us expected to pay.
[00:20:27.090]Brad Lubben: Ark would provide more protection against yield losses our county would do so against county level you losses.
[00:20:35.970]Brad Lubben: If you come into this year with particular concerns about drought and and potential your risk.
[00:20:43.050]Brad Lubben: Drought that is reflected in County level results may be covered very effectively by our candy if your farm is particularly more.
[00:20:51.810]Brad Lubben: Drought pro or is just generally riskier than the county as a whole, then maybe archive see becomes much more relevant as well archive see grew in enrollment in 2019, but that was large and 2020, but that was largely a function of known losses in 2019 as well as maybe some already.
[00:21:12.180]Brad Lubben: Concerning expectations for 2020 now it's 2021 you have to make a decision before planting season arrives.
[00:21:20.400]Brad Lubben: Maybe there's not as much likelihood to project those same losses for our Casey unless you're already in a scenario where you know the drought concerns are significant.
[00:21:30.090]Brad Lubben: Or, frankly, if in wheat country you already have some knowledge of growing conditions and expectations for you, that might make RC archive see irrelevant calculation.
[00:21:42.630]Brad Lubben: Now that's why you might choose our county for that additional yield protection it's also possible that, given the scenario between PLC and Arc.
[00:21:52.530]Brad Lubben: And, given the reality that the farm, the crop insurance has much higher in better protection levels than the farm program does.
[00:22:01.020]Brad Lubben: Then, maybe the bigger choices, what kind of crop insurance decision should I make and should I buy a under underlying protection level on the farm and should I add seo or a CEO to that enrollment.
[00:22:15.090]Brad Lubben: And, remembering that seo is limited, if you are in our current you cannot choose seo but seo does provide protection to both.
[00:22:26.580]Brad Lubben: Now i've done some analysis on online on the online decision tools, I want to point you to them if you go to the FSA homepage.
[00:22:34.680]Brad Lubben: And you under programs and services, you choose the art PLC program link that will take you to that page with with the Web link there.
[00:22:42.990]Brad Lubben: On that page for our can PLC program details scroll down and you'll find a box to resources if you click on that box it opens up the dialog underneath it.
[00:22:53.280]Brad Lubben: that's the links to the convenient web tools there's a web tool produced that and running at the Texas a&m university and one at the University of Illinois.
[00:23:03.240]Brad Lubben: I don't have an answer about which tool is the most accurate, in fact, my sort of glib answer is they're both wrong.
[00:23:11.820]Brad Lubben: Because they both have to make assumptions about price and you'll distributions and we realize that we can debate their assumptions, we can debate what the distribution looks like, but in the end we're going to have one pole or one draw for the entire year as opposed to 500 or 1000.
[00:23:30.300]Brad Lubben: If I look at the a&m tool quickly I plugged in my 463 corn price projection and it tells me that, even though I expect for 63 corn i'm still getting a projected PLC payment.
[00:23:43.440]Brad Lubben: And that always sort of confuses the the user or the analyst, because how can I possibly get a PLC payment with prices at high.
[00:23:53.160]Brad Lubben: But it's remembering that I expect for 63 I don't just plug it into an equation encapsulated otherwise it'd be zero I expected and I also draw.
[00:24:03.360]Brad Lubben: 500 or 1000 possible scenarios around that and some of those scenarios fall below 370.
[00:24:10.110]Brad Lubben: And that's there are some scenarios with the PLC payment, and when you average that out across all of the scenarios, you still get an average expected payment.
[00:24:19.710]Brad Lubben: In this case, it's a $17 payment, but if you scroll through those details at the 75th percentile the number zero which says, at least 75% of the draws are nothing.
[00:24:30.660]Brad Lubben: So there's a less than 25% chance that PLC triggers that makes some sense to us at the 98th percentile says the payment rate is 70 bucks which is rather large.
[00:24:40.650]Brad Lubben: But that suggests that at least 10% of the time there's a fairly big price loss projected in their distribution I can't vouch for the mechanics or the exact.
[00:24:53.250]Brad Lubben: metrics of that, but we have to recognize those downside tales do exist, this is the am model, it shows a big advantage of PLC over Ark Yes, our provides more protection by protecting.
[00:25:09.630]Brad Lubben: yield, as well as price, but it also has a much bigger deductible given where we are today and that's it takes a much longer time before it actually triggers something less than 10% of the time before it actually triggers.
[00:25:24.090]Brad Lubben: Compare that to the Illinois model I plug in the same information in all the way, unfortunately I can't draw my own price scenario i'm stuck using their.
[00:25:35.550]Brad Lubben: Their limited choices and so i'm not comparing for 63 and comparing a $4 corn price as the highest one that they drew maybe that'll get updated to more recent numbers but regardless, even if I only assume $4 I still see an advantage to plc.
[00:25:56.400]Brad Lubben: The payment rate between the two programs doesn't interest me as much in fact that both programs effectively show PLC triggers more often and PLC averages a bigger expected pain and yet we know what the scenario we have we don't expect payments under either program today.
[00:26:16.620]Brad Lubben: So that leaves me looking at analysis and knowing that any of the analysis is going to favor PLC at this point, it seemed.
[00:26:24.780]Brad Lubben: And that's true certainly true on corn that's generally true across all of our commodities soybeans is a little closer actually much closer between the two.
[00:26:34.470]Brad Lubben: But the straight up analysis is generally going to show an advantage to PLC unless you also know and have concerns about significant downside to risk.
[00:26:45.780]Brad Lubben: So that leaves you with the decisions for this year we've got that art versus PLC decision.
[00:26:50.910]Brad Lubben: Given the projected payments on the 2021 crop frankly backing up and given projected payments on the 2020 crop they're doing or this year we don't expect much safety net support, or at least payments in the coming year and the coming two years now.
[00:27:07.920]Brad Lubben: That leaves us remembering that there are other risk management decisions, I would argue this year, where the crop insurance decision is pending, and while it's still important.
[00:27:17.430]Brad Lubben: A good crop insurance there's gonna be why the farm program decisions, pending a good crop insurance decision and a good marketing decision is even more important.
[00:27:26.340]Brad Lubben: The new crop insurance tools may help with that, but fundamentally it's important that we understand how to manage that that broader complex safety net for farm income.
[00:27:37.350]Brad Lubben: that's a setup to talk about farm programs, and hopefully it's a setup to say frankly crop insurance is the bigger decision this year, and let me turn it back to Korea for that discussion.
[00:27:47.820]Jessica Groskopf: Before we turn it over to corey I do have a question in the chat box brad that it is important for you to go over the question is, what are the mechanics that were used around setting the base rate of 374 corn, and what is the likelihood.
[00:28:02.340]Jessica Groskopf: That it could be meaningfully revisited for 2021 or also for years after 2021 So do you want to talk about that, before.
[00:28:10.200]yeah let me, let me talk briefly.
[00:28:13.080]Brad Lubben: The the base rate the reference rate of 374 corners set specifically in legislation that was said in the 2014 Farm Bill it stays the same here and 2018 in the 2018 farm building, there is a formula that says it can go up if.
[00:28:31.320]Brad Lubben: market prices move higher.
[00:28:34.170]Brad Lubben: Then you take a five year Olympic average.
[00:28:37.590]Brad Lubben: And if that five year Olympic average times at 5% exceeds the 370 we would actually raise the reference range.
[00:28:48.120]Brad Lubben: But we're on a leg.
[00:28:52.290]Brad Lubben: The last year, this farm bill.
[00:28:55.530]Brad Lubben: The data will count for 2023 but it's an Olympic average you throughout one year anyway.
[00:29:02.850]Brad Lubben: So the 2020 data is also looking like it may finish very strong it's possible we'll get a calculation that goes up, but the likelihood that it goes up high enough to move that reference rate under this Farm Bill is essentially non existent.
[00:29:21.060]Brad Lubben: We could see that discussed.
[00:29:23.670]Brad Lubben: As the next Farm Bill comes due in 2023 but for practical purposes for the major crops were sort of stuck with the existing reference ranges.
[00:29:36.840]Jessica Groskopf: Thank you so much Cory do you want to take us off on crop insurance decisions.
[00:29:42.240]Cory Walters: You bet.
[00:29:48.060]Cory Walters: All right, thank you brad.
[00:29:50.550]Jessica Groskopf: Your cameras still off the camera is still on.
[00:29:56.700]Cory Walters: Let me turn, that on.
[00:30:04.770]Cory Walters: There we go.
[00:30:11.730]Cory Walters: Alright, so before we dive into the crop insurance the hopper how i'm going to characterize this year's decision now let's have a quick quick review of your different options.
[00:30:21.360]Cory Walters: You have multiple multi parent crop insurance is your traditional one this is bringing your revenue protection yield production server stuff.
[00:30:28.020]Cory Walters: You get a coverage level this essentially is your determine your determining your liability and you get to select that in 50 to 8485 58 5% in 5% increments.
[00:30:39.450]Cory Walters: You also get to select your policy type is influences how payments are made are those mechanics do you want to.
[00:30:46.950]Cory Walters: While you're ensuring yields, do you want to then include a price insurance in there.
[00:30:51.780]Cory Walters: Then you also get your unit type and that that determines how your acreage is divided into separate insurance policies and there's there's four of those they're optional basic enterprise and whole farm going more expensive expensive to cheaper from left to right.
[00:31:08.700]Cory Walters: Okay sitting around this crop insurance stuff is these other options and one of them is the seo is supplemental coverage option.
[00:31:17.400]Cory Walters: And this is this effectively is designed to is your part of your farm level your your multi peril deductible and ensures between your coverage level up to 86%.
[00:31:28.020]Cory Walters: So if you had a 75% coverage level you get that 11% between there and also this graphically here and a couple slides really characterize this and the next one i'll talk about subsidized at 65% it must participate in PLC and to purchase, so I think Brett said that.
[00:31:46.770]Cory Walters: And if we golf our probability distributions I was talking about earlier at that 80% 86% coverage level as a $3 and 94 per bushel so you got a 28% chance prices this fall will end up below $3 and 94 cents.
[00:32:05.100]Cory Walters: This is the new one for this year, enhanced coverage option.
[00:32:08.610]Cory Walters: is similar to seo and it's also available for rp and wifey but also operates at the county level with the yields.
[00:32:15.510]Cory Walters: county yields and then, of course, those same prices, you can select a 90 or 95% coverage level and you get a premium subsidy i'll be a little bit smaller than the seo of 44% for rp 51% for whitey.
[00:32:28.350]Cory Walters: And that 95% coverage level of the higher one there, it gives you a price of $4 and 35 cents and there's around a 42% chance prices, the small could end up below this.
[00:32:41.880]Cory Walters: Okay, so let's characterize how to how to how to think about these these programs So what we have here is just revenue down here on the X axis.
[00:32:51.720]Cory Walters: And probabilities going up here and and and and we started off the year knowing dis expected revenue, this is that a pH times that.
[00:32:59.820]Cory Walters: projected price, but what we don't know, though, is where we'll end up this fall and so what i've done is i've drawn a distribution that may represent.
[00:33:08.370]Cory Walters: Where we could end up this fall with with maybe low revenues, or even even higher revenues i'm probably did a little disservice here right kink this tail out over a year and get you a little bit higher revenues for a chance, but nevertheless i'm worried about these guys down here.
[00:33:24.330]Cory Walters: So the first thing that we do is we layer in insurance and listen, so we buy crop insurance and crop insurance then provides essentially from an I selected a 75% coverage level, so any any outcomes down here in this area.
[00:33:40.740]Cory Walters: You you'll get a little grain let's say there's a little yield and then your shorts and bushels because you had this insurance contract and then.
[00:33:48.480]Cory Walters: You know the crop insurance company pays you for the difference and when you're when you're participating in this program you have to have a deductible.
[00:33:56.670]Cory Walters: And that's that that difference between one and 75% so in this case the producer deductible is 25% you have to lose 25% of your expected revenue before insurance will will start paying so essentially you're participating in the loss okay.
[00:34:13.980]Cory Walters: Now let's get to the fun stuff let's layer in seo and he co on both of these things so like said earlier seo will jump you from from that 75% up to 86 at 16% yeah and then that that seo now goes goes to the next level and 9% gap gets you up to 95% so now we're really talking.
[00:34:37.440]Cory Walters: Almost 200 rolls to 100% so almost ensuring ensuring ourselves through different mechanisms perfectly So what does this mean what do we do with this do we buy seo seo or not.
[00:34:51.840]Cory Walters: i'll give you my hint to that it's very much dependent upon your your goals and objectives.
[00:34:59.730]Cory Walters: One thing going for both of these things this year we're starting off in an extremely higher price than we've seen in the past in fact of price, it appears to be very, very profitable, however.
[00:35:11.310]Cory Walters: Given that For those of you that are here that have priced seo you might get a little sticker shock.
[00:35:19.320]Cory Walters: seo is going to be very costly, because the probabilities of claims are very high you're you're you're walking up this curve right here.
[00:35:27.390]Cory Walters: And you have to account for all of these things in here and that's a lot more than hanging down in this area over here and your individual coverage so easy oh can be very costly.
[00:35:38.280]Cory Walters: Okay, so that takes away, maybe some of the lower to it, however we're still starting off at high prices so so things can draw pretty quickly so.
[00:35:48.480]Cory Walters: Why else would we want to ensure or by EC over seo when I when I layer in expected cost production, and I use the URL crop legends from Glenys.
[00:36:00.390]Cory Walters: I see between irrigated and on irrigated crop of production costs running between $2 and 90 cents in $3 and 80 cents over here in this range.
[00:36:10.890]Cory Walters: So prices that are have to drop may be dropping and you start getting claims from EC Oh well before you're actually out of.
[00:36:18.330]Cory Walters: Out of any any money, so it makes me or before you're losing money so essentially you're in a positive profit place so that's that's kind of intriguing do we do we then spend the money for this, or do we turn around and put that money, money somewhere else.
[00:36:33.810]Cory Walters: Okay um one thing i've glossed over a little bit is that.
[00:36:40.380]Cory Walters: Your 2021 crop insurance deductible may not be as it seems the rise in the desert futures through the month of february's causing your deductible to grow so let's take a look here at a producer.
[00:36:54.510]Cory Walters: Is a 235 bushel a pH will say there irrigated producer are projected price came into.
[00:37:01.620]Cory Walters: And you have a coverage level of 80% and we go over here now we're sitting today I think we're just a couple pennies below this but, nevertheless, the idea still exists, your 475 now on December futures, and so it actually gives you a 77%.
[00:37:19.470]Cory Walters: coverage level, so your three percentage points off here so as this thing keeps growing you got to lose more.
[00:37:26.850]Cory Walters: of revenue before you can start you can start claiming okay so keep it give a thought on that is your is your buying insurance issue.
[00:37:36.390]Cory Walters: Okay, oh so to wrap this up when layering in seo or the CEO and your individual coverage your your devotees are generated from two sources.
[00:37:46.110]Cory Walters: First, you get the county that's your seo seo at your your.
[00:37:50.850]Cory Walters: On the county side now of course you have your your individual So what can happen is a lots of odd outcomes can and will occur.
[00:37:57.780]Cory Walters: don't don't let this stop you though thinking about a strategy of how you could use both of these things, because there is similarities between them.
[00:38:05.940]Cory Walters: And price is the similarity so it's a it's effectively working off of a pricing strategy and as brad said, if there is a drought that's that's a pool risk of you typically hits counties fairly large that just doesn't work as well in your counties, really, really big.
[00:38:22.770]Cory Walters: And you know I remember if you're receiving an indemnity from individual coverage do the price than likely the seo and easy or paint painting as well.
[00:38:32.430]Cory Walters: Your individual yield and county yields will still be your your source of discrepancy and payments just be aware of how that works and, of course, as further as prices dropped further from spring to fall, then higher higher fall yields must go must must occur to revenue out of an adaptive.
[00:38:52.020]Cory Walters: Okay.
[00:38:53.760]Cory Walters: So what is ECU he co and to some extent this seo supposed to do, supposed to supposed to represent.
[00:39:00.240]Cory Walters: Okay, we know that the seo harvest price triggers $4 and 35 cents there's a 42% chance chance prices end up below that's pretty good odds.
[00:39:10.200]Cory Walters: The seo premium range i've seen a first step, between 25 and $30 an acre of course past your agent for those those exact numbers is it's going to be costly because of this 42% and then.
[00:39:23.310]Cory Walters: You can pick up this 9% of liability by by taking to 35 times $4 and 50 cents times point nine I did not put that in here that's where you get your your $97 so you essentially be paying 25 to $30 to get potentially $97 and recall it's still 42% chance of that happening so.
[00:39:46.920]Cory Walters: On one hand, it ensures a range of profitable prices, so why buy something so expensive maybe put that premium to use somewhere else, on the other hand, given that projected prices are so high.
[00:40:01.410]Cory Walters: And we grow in normal size crop could prices dropped him at journey dramatically between now and fall and give you a Max payment Okay, and of course it's costly to participate.
[00:40:13.410]Cory Walters: And if prices were to drop would there be, then any any government payment because we keep layering in we keep layering in these these alternative products.
[00:40:25.320]Cory Walters: That part I do not know.
[00:40:27.660]Cory Walters: So with that we can open it up to questions.
[00:40:33.270]Cory Walters: just go you got questions.
[00:40:34.560]Cory Walters: or you'll handle questions.
[00:40:35.940]Jessica Groskopf: yeah so again, if you have questions for our panelists Please go ahead and either use the Q amp a feature.
[00:40:43.470]Jessica Groskopf: Or the chat feature, and we will draw questions from there, and the first question is related to drought and the Ark individual program so brad.
[00:40:53.010]Jessica Groskopf: i'm going to have you kind of go over that so we talked a lot about Arc county but can you dive just a little bit deeper into Arc individual as a potential option for 2021.
[00:41:06.030]Brad Lubben: Yes, JESSICA thanks and certainly there's a question about whether Arc individual coverage would would provide more protection than our county.
[00:41:15.120]Brad Lubben: Given potential drought expectations, if we really thought the only peril was drought and we expect the droughts, a widespread.
[00:41:22.950]Brad Lubben: event, then we expected that would show up and county level numbers, but if the farm has any sort of variance and risk that maybe is more risky or not, as you know, the county's not as representative the farm then certainly archive see has a role.
[00:41:40.860]Brad Lubben: The the challenge in any sort of analysis is that archive see mechanics and our CEO mechanics clip similar.
[00:41:49.020]Brad Lubben: But then, at the archive see program you pool all of the crops on the farm on the farm program crops so it's kind of like choosing enterprise coverage for crop insurance.
[00:41:59.160]Brad Lubben: You don't just ensure each individual unit you bundle them together and so you've pulled across those those crops on the farm.
[00:42:08.850]Brad Lubben: And then you make this calculation and then, if there's a payment Arc ic pays on 65% of the base acres Arc county pays on 85% of base acres.
[00:42:21.030]Brad Lubben: Now there's a logic for that you expect the farm to have more variability than the county so you expect the farm would trigger more often than the county.
[00:42:31.200]Brad Lubben: So it triggers more often, but it pays on a smaller percentage budget wise that sort of smooth out the differences when they originally pass this legislation back in 2014.
[00:42:43.800]Brad Lubben: that's why archive see always sort of has a difficult.
[00:42:47.550]Brad Lubben: comparison to our county, but if you have information on the farm that says.
[00:42:56.370]Brad Lubben: i'm riskier or I already have expectations about this year that are that are on the downside, then that big deductible for Arc and maybe, particularly for Casey starts to disappear already and we're already closer to to where it would trigger.
[00:43:14.190]Brad Lubben: The mechanics are long and complicated it's not easy to it's easy to choose archive see it's not easy to enroll in the terms of all the all the numbers, you need, but if you're really concerned about farm level risk that archive see certainly becomes more relatable.
[00:43:32.250]Jessica Groskopf: Thank you for that answer all right corey are you ready for some seo seo questions.
[00:43:40.110]Jessica Groskopf: yep you're on mute but here's the first one, if the harvest price is higher does seo and seo coverage adjust like the harvest price on multi Apparel and then do any of the tools extend to include the impacts of seo and a CEO.
[00:43:58.950]Cory Walters: So under under revenue protection and, yes, you get you do get the price adjustment as well, it worked the same just at the county level what was the second part of that.
[00:44:07.560]Brad Lubben: Let me jump in on that question because it relates to the online form program decision tools.
[00:44:13.290]Brad Lubben: I will, I will offer my editorial comment, which is i'm disappointed that neither of the tools really helps you answer that question.
[00:44:21.660]Brad Lubben: Both of the tools only study the probability and the size of potential farm program payments, not even farm revenue.
[00:44:31.140]Brad Lubben: So, so you get this comparison of how often the programs might pay and what the average expected payment is you don't get an analysis of what that really means to your bottom line.
[00:44:43.200]Brad Lubben: And you don't get an analysis of how does that farm program payment compliment a crop insurance decision as well, so it's an incomplete tool at that.
[00:44:56.190]Brad Lubben: To build a full complete sort of tool of the for the whole portfolio, maybe as a dream project it's also a very sort of expensive and challenging project.
[00:45:06.930]Brad Lubben: But but know take take it with you know take it with the limits that it comes with those online tools really only talk about expected payments not not ultimately farm revenue or crop insurance support.
[00:45:24.570]Jessica Groskopf: Alright, our next question is he co pays before seo does it make sense to select seo without a CEO.
[00:45:35.040]Cory Walters: that's definitely one of the contract combinations so it's up to the user.
[00:45:40.680]Cory Walters: Absolutely, the seo premiums sorry the seo premiums are going to rate rise dramatically because you're walking up that that distribution to more and more likely outcomes occurring.
[00:45:53.430]Brad Lubben: corey if I if i'd asked your judgment to when you see seo that kicks in at 86%, so this is assuming someone not an Arc they're looking at seo seo kicks in at 86% down to whatever farm coverage they buy, they can buy farm coverage anywhere up to 85.
[00:46:11.880]Brad Lubben: Would you see a reason to trade off lower farm coverage, so that you can replace it with seo or is there or is there generally the, the benefits are to go as high on farm coverage, as you can and then decide whether seo fills in the other camp.
[00:46:27.570]Cory Walters: it's i'm hard pressed to let go that yield guarantee that you're picking up on the farm on on any of those things, because that that plays into the marketing side of everything else.
[00:46:46.920]Jessica Groskopf: Alright, so our next it's more of a comment in the in the chat boxes that.
[00:46:52.560]Jessica Groskopf: We should reiterate the seo and seo and devaney's are not known until June of the next crop year, this may affect some cash flow decisions.
[00:47:03.420]Jessica Groskopf: Absolutely.
[00:47:04.380]Cory Walters: Good yeah that's that's how it works, they have to get through those those county yields and they won't be posted until till always out yeah afterwards.
[00:47:17.340]Jessica Groskopf: here's a fun one for you Cory How does hail insurance integrate into these components.
[00:47:29.550]Cory Walters: So I didn't know very much what policy, you have, for your whole day parallel with optional units or enterprise units what's your hail rates looking like.
[00:47:41.580]Cory Walters: yeah your sales and non pooled rasta could hit you individually, the seo seo yield stuff gets you on a county level so it's a more of a drought protector, so you let them go there.
[00:47:55.440]Cory Walters: isn't going to hail and there's a drought.
[00:47:58.830]Cory Walters: yeah that it gets ugly at the end you need to have a solid understanding or building to protect yourself from multiple barrels and it's hard to give up the protection on those those ones that are really protecting your yields.
[00:48:13.230]Jessica Groskopf: So I would like to follow up with that I really encourage you to go to your crop insurance agent and have them quote these various combinations and look at the difference in the coverage and the types of coverage, as well as the premiums The other thing is.
[00:48:30.420]Jessica Groskopf: A little bit more than brad I like the Ark individual program as an additional kind of hail policy for some of those farms and there's some.
[00:48:39.450]Jessica Groskopf: there's some innuendos to that like you said it's it's a discounted payment rate.
[00:48:44.280]Jessica Groskopf: But if you're in a severe weather area, the farther from the Center of the corn belt we get that Arc individual program might be something that you think of in terms of severe weather and i'll give you our example.
[00:48:57.810]Jessica Groskopf: From our personal operation was that, and it was hard because we already knew, but in 2019 we got kicked in the teeth by hail.
[00:49:05.910]Jessica Groskopf: And so we knew what farms, we could put into the Ark individual program to trigger a payment and we're actually considering looking forward doing those same firms that have a higher likelihood of hail so Arc individual could be an interesting option.
[00:49:22.980]Jessica Groskopf: In that severe storm situation.
[00:49:26.190]Brad Lubben: radish I might, I might add to that a bit to say I I concur that the.
[00:49:30.630]Brad Lubben: More you, the more you have farm level risk, the better archive seed looks remembering the limitation archive see just like our county.
[00:49:40.290]Brad Lubben: Only pays 10% of the last below the benchmark it starts at 86% of the benchmark it caps out at 76% of the benchmarking so so don't believe that Arc I see is.
[00:49:54.960]Brad Lubben: Your full hail insurance policy or your full crop insurance policy it's only it's only a 10% band it's the shallow loss, maybe that helps you buy down lower coverage level that that costs less premium but remember that it's not a 100% substitute.
[00:50:17.040]Jessica Groskopf: And also it's based off your base acres then that's something we also get twisted in our minds is these payments are not made on actual planted acres they're made on base acres and the farther you go West.
[00:50:29.730]Jessica Groskopf: Usually, like in scotts bluff county that's usually traditionally half or a third of your total planted acres.
[00:50:36.570]Jessica Groskopf: equals base acres so that's something we really have to make sure that we're we're not confusing that this is not a planted acre program when we're talking about Farm Bill, where these crop insurance products do do cover planted a bridges.
[00:50:52.980]Jessica Groskopf: Another question coming from the chat which is better to use a CEO or to buy a put what are the advantages and disadvantages of each.
[00:51:03.600]Cory Walters: So this is a great question I like this, so.
[00:51:07.350]Cory Walters: When when you're buying that he co if you're going to use that as a substitute for a book, you have to walk through all the rigmarole of that insurance product and there's there's numerous things there that you like or don't like.
[00:51:19.740]Cory Walters: It What about flexibility if you buy the put, then you can you can trade that thing anytime between now and exploration on the.
[00:51:28.470]Cory Walters: seo side you're stuck with that thing through the end and then get it add in that yield variability into that thing so either one is good i've not looked at.
[00:51:38.490]Cory Walters: You know, a price of a foot, with a similar strike price and what he CEOs giving you a low, although the so that trigger price on the CEO is.
[00:51:47.790]Cory Walters: Around that for 35 that's really not where you start actually making any money, you have to pay for that premium.
[00:51:54.180]Cory Walters: which might run you about 12 or 13 cents so then you're down down a little more on that thing which is saying we go for it, but you have to you have to pay for that thing as well, but.
[00:52:05.310]Cory Walters: At the CEO subsidized, so it should overtime return you a little more.
[00:52:12.330]Cory Walters: But you don't get the flexibility as you would have to put it prices keep keep rising you can you can exit out that thing with still some some time value left in that so.
[00:52:23.580]Jessica Groskopf: Alright, our next one is we are usually at 70 or 75% coverage levels would seo or a CEO make any sense.
[00:52:35.220]Cory Walters: So again, if I if you're if you're.
[00:52:38.910]Cory Walters: One hand or the other, if you're you're looking at protecting your farm revenue and you can do that, this year, protect your your your costs.
[00:52:47.940]Cory Walters: Where you don't have any financial exposure.
[00:52:51.300]Cory Walters: I you get to put you have the choice to put that money somewhere else or continue buying insurance where you're already insured you above your your cost production.
[00:53:03.450]Cory Walters: On the other hand, prices are high and if farmers are responding.
[00:53:09.870]Cory Walters: to higher prices we're we're doing this before planting man, the pressures of lower prices, come fall within a reasonable yields.
[00:53:21.720]Cory Walters: exist so so you that's more of a financial.
[00:53:29.220]Cory Walters: Strategy it's not a fan it's a strategy just based on on just making some money, even though your farms really not exposed to it, because you you've already insured yourself, maybe a small profit and you're just adding this on the top of it so it's user preference user preference.
[00:53:47.460]Jessica Groskopf: All right, we have someone who has their hand raised so janine i'm going to go ahead and allow you to talk, if you would like to ask her question.
[00:54:12.480]Jessica Groskopf: Go ahead janine.
[00:54:22.290]Jessica Groskopf: Alright looks like we are unable to hear from janine.
[00:54:26.760]Jessica Groskopf: janine if you want to type your question into the.
[00:54:32.190]Jessica Groskopf: into the chat we'd be happy to allow you to get that question answered again we have a few minutes left So if you have questions, please go ahead and enter them into the chat.
[00:54:44.550]Jessica Groskopf: Or the Q amp a section, so our next question brad is for you, it says, our CEO for corn in our county has a benchmark yield of two or three.
[00:54:55.980]Jessica Groskopf: And a price of 370, how is the guaranteed figured for the county yield due to drought or ratio that would give the county yield 140 if the price goes in fall to say 550 do they still use the 370 price times the 144 the benchmark revenue right.
[00:55:17.190]Brad Lubben: Great question bunch of mechanics or mathematics here.
[00:55:21.960]Brad Lubben: Yes, if you have a benchmark deal with two or three and we know the benchmark price is 370, then I did some calculations here, where I was waiting that gives me a.
[00:55:33.330]Brad Lubben: benchmark make sure I did the right calculation.
[00:55:38.040]Brad Lubben: two to three times 370 gives me a benchmark revenue of 751 10.
[00:55:45.210]Brad Lubben: Now my guarantee is 86% of that so it's a 645 95 guarantee.
[00:55:53.520]Brad Lubben: Any combination of yields and prices for the county that ultimately fall below that 645 95 would trigger an Arc payment now, that is the actual county yield per acre and so you gave a hypothetical.
[00:56:11.610]Brad Lubben: It is also the national marketing your average price So if you had a 140 county yield, given the guarantee I just calculated.
[00:56:22.740]Brad Lubben: There would be a payment.
[00:56:25.230]Brad Lubben: As long as the national marketing or average price was for 61 or less so that's one of the realities with pricing meal.
[00:56:35.940]Brad Lubben: distributions and correlations if we really suffer widespread drought.
[00:56:42.270]Brad Lubben: You know, frankly to to if we suffer drought in a few counties it's it's a bad situation there, but it's not enough to move the country as a whole.
[00:56:50.970]Brad Lubben: If we really suffered enough widespread drought or really widespread storm losses, you can envision yields going down and prices going up.
[00:57:00.180]Brad Lubben: And you could still end up with a scenario yeah we had lower yields, but we had higher prices and thus the revenue is still sufficient to exceed our guarantee, so it really.
[00:57:12.510]Brad Lubben: there's a reason why further east and the corn belt they see less and less sort of relevance for this revenue protection because because prices and yields are nice and in Bruce be correlated and.
[00:57:27.360]Brad Lubben: They sort of have their own natural hedge already in place.
[00:57:31.320]Brad Lubben: yield protection is more relevant, the further West you go and but recognize that it would still.
[00:57:38.670]Brad Lubben: It would still take a fairly substantial.
[00:57:41.730]Brad Lubben: loss to trigger underarm.
[00:57:49.650]Jessica Groskopf: Thank you for that brad i'm going to give a last call for questions if you have any questions, please go ahead and put them in the chat or the Q amp a.
[00:57:58.530]Jessica Groskopf: i'm going to give our panelists one more opportunity to make some some final comments so corey we'll start with you as we wrap up today, what are your final thoughts.
[00:58:10.800]Cory Walters: This is an awesome year have fun don't don't get too overly bullish about this thing that we're all sudden heading so some miracle price.
[00:58:22.380]Cory Walters: it's you know make some money survive don't forget about even the following year.
[00:58:29.250]Cory Walters: Looking out that far because we're there's producers we're going to produce this thing back down to production costs, one way or the other.
[00:58:40.380]Cory Walters: it's it's coming and and i'd be happy to answer any questions over email or, if you have any thoughts or anything about anything I said i'd be happy to discuss anything within with anyone.
[00:58:53.700]Jessica Groskopf: Thank you corey brad any final thoughts.
[00:58:57.030]Brad Lubben: You know I appreciate chorus said it's it's hard to get bullish about a rally at a time period where we can still substantially influenced production.
[00:59:08.130]Brad Lubben: it's it's great to have a rally right now, if you're a crop producer but, but the question is, do you take advantage of it or What do you do with it.
[00:59:16.650]Brad Lubben: The farm program decision is coming up with a deadline on the 15th and, as I noted I don't think that's the most significant decision is here.
[00:59:25.620]Brad Lubben: What you do with crop insurance and what you do with the marketing plan, and it has a much bigger impact on will have a much bigger impact on your bottom line.
[00:59:35.280]Brad Lubben: We don't expect much really much cash flow or support from farm programs either this calendar year based on the 2020 crop or in the next calendar year based on the.
[00:59:47.100]Brad Lubben: crowd so all these decisions are important but don't expect them to buy themselves to be a big part of a big part of your bottom line look at all the other risk management tools and decisions to go along with.
[01:00:02.790]Jessica Groskopf: I would reflect both their comments and one of the best things that you can do.
[01:00:06.810]Jessica Groskopf: You know, in this time period before we get into the tractor is to sit down and think through each of these decisions they're not three separate decisions.
[01:00:15.930]Jessica Groskopf: They are decisions that are all integrated together so make sure that you're looking at what program Am I enrolling in what crop insurance and my purchasing.
[01:00:25.200]Jessica Groskopf: And what am I doing on the marketing side and how they interact together and spend some time before you get too busy.
[01:00:32.040]Jessica Groskopf: To do that, so again this presentation has been recorded, it will be posted online at farm you know.edu along with the slides that our panelists had today.
[01:00:43.140]Jessica Groskopf: Thank you everyone for joining us next our next webinar will be this Thursday at noon central time, it is the second webinar in a two part series on succession and estate planning.
[01:00:55.440]Jessica Groskopf: As a reminder, you will be receiving a short survey in your email that we would really appreciate your feedback on not only on today's webinar but your input for future sessions Thank you again for joining us.
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