Minding Ag's Business
Marcia Zarley Taylor DTN Executive Editor

Monday 05/19/14

Contrarians Counter Ag's Doomsday Decade
Official government forecasts understate the potential for commodity markets to reignite, contrarians at the Global AgInvesting conference argued.[Read Full Blog Post]
Posted at 4:03PM CDT 05/19/14 by Marcia Zarley Taylor | Post a Comment
Comments (10)
Crop Insurance = Welfare for the wealthy. As long as the taxpayer is asleep at the wheel big ag will roll. Thank U President O!
Posted by Unknown at 8:15PM CDT 05/19/14
"Growers recognized the benefit of insurance"? Government mandates in the banking industry might be a more correct statement.
Posted by Bonnie Dukowitz at 5:16AM CDT 05/20/14
Good for your Bonnie Dukowitz. I concur completely!!
Posted by Kent Wilke5 at 6:49AM CDT 05/20/14
Posted by Unknown at 8:34PM CDT 05/22/14
Concur with what?
Posted by Don Thompson at 1:09PM CDT 05/23/14
Take a look, Don, at who or what, has much interest of title ownership of the insurance companies. Then expand the analytical thought process a bit.
Posted by Bonnie Dukowitz at 9:53PM CDT 05/23/14
Again, huh?
Posted by Unknown at 8:19PM CDT 05/26/14
One thing you all over look is that in 2012 corn was 7.00 so crop insurance payed big. But what happens when corn is sub 4.00.85% of 4.00 corn protection will not cut it.Even 200 bu. corn at 3.40 won't even cover cost let alone the insurance premium on top of inputs
Posted by Raymond Simpkins at 9:08PM CDT 05/26/14
You are correct Raymond. In many situations the covered amount might be almost enough to pay the bank. The bank might also be the owner of the insurance company. Kind of a win-win deal for them. I wonder if anyone obtains a crop operating loan w/o crop insurance. There is much more to the Agriculture Act than crop ins.
Posted by Bonnie Dukowitz at 5:59AM CDT 05/27/14
Ray, spring price set the floor for the year, but your point still stands. There is little protection for grain farmers this year. The biggest driver of survival going forward will be land costs, either owned or rented. Think about the PP acres and how bad that would be for the bottom lines, 60% of the guaranty. Bonnie, the only bank that I know that owns an insurance company is Wells Fargo. They own RCIS through a subsidiary, but there could be others. As far as getting an operating LOC without crop insurance, well I suppose that it is possible, but with margins so tight, I don't know many bankers who would do it. There is too much at risk. How many farmers could stomach a complete crop failure? With the high input costs, machinery, building, and land debt or rental prices, you might be able to stomach 1 year of loss. 2 years and you would be out of business. Even with a CAT policy it wouldn't be pretty. For as cheap as crop insurance is priced, to not take it out, you are not balancing the risk/reward very well.
Posted by Pedro Sanchez at 9:45AM CDT 05/28/14
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