How Crop Insurance Works for Row Crop Farmers Explained

[00:00:00]all right folks I've had uh several people uh request this video for quite a while now and with the severe drought that we've experienced this summer uh I thought that this would be a an appropriate time to make this video uh just to tell you all about how crappie Insurance works [Applause] [Music] thank you now first of all I want to preface this by by saying a few things you know crop insurance is a tool that we use to minimize our risk when we experience adverse conditions or low yield it is not something that any Farmer worth its salt wants to make a profit on none of us want to be insurance Farmers but we have insurance to protect against the inevitable same reason you've got car insurance and and homeowners insurance and everything else because bad things can and do happen and it's in the same way in farming there's a lot of things that are unpredictable things that we can't control that can affect our income year in and year out and since we basically only get paid once a year any any loss of income can have long lasting effects on us and crop insurance is a good tool to minimize that risk you know most Farmers they always strive to make the best crops best yields uh best quality crops that they can but inevitably something's going to happen in a year where on something that we can't control and could cause us a crop loss also something else that people might not know is that crop insurance is federally subsidized and the level that is subsidized that just kind of depends on what level that you choose now I'll speak more of this later on in the video also uh crop insurance rates are set by the federal government so there's really no reason to shop around different companies that provide crop insurance because the rate that you're going to get quoted is going to be the same because it's set by the federal government when choosing when a farmer chooses crop insurance it's more important to choose a crop insurance company or agent that they trust that they know that will get any kind of claims turned in quickly that will work with them real closely to choose the best type of coverage that is best for their operation and their financial situation that's uh those are the main considerations that we choose when choosing a company because it doesn't pay to shop around because the rates are going to be the same now this video is going to deal with how crop insurance works on your major commodities corn cotton soybeans and wheat I can't speak about any other crops specialty crops or livestock or anything like that I'm sure that there's Insurance available for that but considering we're just a row crop Farmers I don't know how that works so I'm not going to talk talk about that so the purpose of this video we're talking about our major row crop Commodities before we get started into the Nitty Gritty there's basically four factors that come into play when determining whether a farmer is going to have a claim at the end of the year first you've got your production history what's your historical production has been on that farm kind of sets the level of what you can be insured at then you've also got the price of that commodity for that year because commodity prices are constantly changing going both up or down each year has its own commodity price that determines what the value of that commodity is the third thing is is what level that you decide you're going to get in sure that there's many different levels ranging from not as much coverage and having a lower premium to having a lot higher coverage but having a very high premium so which one of those levels you choose can determine whether you get paid out or not and then fourth of course uh do you have a lower yield for that year of year are you experiencing any kind of loss so it's those four things that come into play when determining whether you're actually going to draw any kind of a crop insurance money for the year let's start off with the first Factor your yield history on the farm your yield history is what it is used to determine what your Farms are capable of reducing for an average and then that's used to determine whether you've actually got a loss in a year or not now every year after harvest farmers were required to report their yields to to the crop insurance company so they can keep a database of the yield history on your farm and when calculating what you're guaranteed abilities for a farm crappie Insurance takes 10 years worth of previous crop history in order to build that average now normally I mean that sounds fine and above itself before we get into a problem with this is farmers who rotate you know say there are corn and soybean farmer well they only plant corn on their Farm every other year so to get 10 years worth of corn crop history on a farm you have to go 20 years back into the past now yields typically go up on a trend line every single year as varieties get better farming practices get better as we improve our soils and a lot of other things you know crops tend crops tend to gradually follow a trend line up so if you go back 20 years in the past corn yields soybean yields cotton yields were a lot lower 20 years ago but you've got yields from those years figuring into your average so while you might have a farm that say capable of producing 200 bushels per acre of corn right now you know that same Farm might have only been produced in say 150 to 160 bushels of corn 20 years ago so you got those averages figuring into your average yield and then you take you take the average of that 10 years it's going to be lower than what that farm is capable of producing now because of where we are with farming technology and advances in varieties and everything else so while your farm might be capable of producing 200 bushels breaker corn now that's not what you're going to be guaranteed and then anything below 200 bushels per acre you're going to be paid for that's not the way it works unfortunately now looking in my case that this Factor comes into play even more because we rotate our crops once every three years because we have cotton in the mix We Grow our rotation is corn cotton and then wheat and double crop soybeans so we only get corn or cotton or wheat or double crop soybeans planted on a farm once every three years so technically we could have production from 30 years ago figuring into our our average which will cause our average yields to be even lower now looking at this one farm right here you look right here you know we've got our 10 years worth of yield production this is a farm that we own and we've owned for a long time it's also a large farm with three tracks of land so typically we've got one of each crop growing on that farm number every single year so we might have cotton on one track to that Farm Number having one have corn on another track of that farm number and then wheat and double crop soybeans on the third tract at that farm number so so in order to get our 10 years worth of yield production history we only had to go back 10 years in the past you can see right here you know we've got our uh we got our crop ears that we produce cotton on this Farm we got the total production of each year for that farm we got the amount of Acres that we planted that year and then finally we've got our yield then all of this is used to calculate our average yield now crop insurance has come come up with a way to help mitigate these lower yields in the past it's trying to take the advances in genetics and crop in crop practices is trying to take those factors out and assume that every year is going to be equal and the tool that they use for doing that is what's called trendages first now this train adjust is another option we can choose on our crop insurance but it does come at a cost we have to pay extra for it so if you look right here uh cropier 2011 our farthest Year back in our yield history you know we actually yielded 785 pounds per acre you know not great but 785 pounds an acre was better 10 years ago than what we would consider it now now if you factor in the trend adjustment right here in this column you can see that brings our yield for that year from 785 pounds an acre up to 925 pounds per acre which is a lot more acceptable and then as we go down the yield gap between our actual yield and Trend adjustment yield goes down because we're getting closer to the Future and say uh when I look at last year production 2021 now we had a real bad year cotton last last year we came up with 619 pounds per acre on that farm but our Trend adjust yield only Rises it to 632 pounds per acre so if you got fairly consistent yields for the past 10 years the trend is just option might not really make that much sense to you but if you're steadily rising and yields the trend in like in our case the trend adjust option becomes a very valuable tool and I've and I found that it's worth the money so now your question might be I just picked up a farm I don't have any kind of yield history on it how do they determine what my uh approved yield is all right in this example right here this is a farm that we bought back in uh 2018 and had no we had of course we had no yield history on it and we first planted corn on it in 2020. in the a case of crop insurance you need a minimum of four years worth of History to have an approved yield but if you've never planted a crop on that farm of course you don't have any yield history so what crop insurance does is they take what they call a t yield and plug it in for four years worth of production and the T yield is the county average for that crop and in this case the T yield for Crockett county is 146 bushels per acre now if you look at this farm right here you know we had corn on it in 2020 and we had a production of 170 bushels per acre which is significantly above the county average and the majority of farmers that are good they're going for they're going to be producing yields that are higher than the county average and I understand that we got to plug something in to get some kind of idea of a yield average but when you're consistently producing above the county average and but you're using the county average for your average yield and approved yield then this comes to where it hurts you and crop insurance is not going to be near as beneficial for it now my crop insurance agent did tell me what crop entrance is supposed to do is they're supposed to either either plug in the T yield or plug in which your simple average is for that County now I haven't worked the numbers to find out if that's in fact the case the case or not but it doesn't appear to be that way on on this on this example right here it looks like that the T yield was used so that's something that I'm gonna have to bring up with my crop insurance agent uh before I have corn on this Farm again so you say we've got a farm that's uh capable of producing the 170 bushels per acre but our approved yield our yield average is only 152 bushels per acre now as we keep growing corn on this Farm in the years to come our approved yields should go up you know once you know as long as we're yielding above the county average our yield should go up now looking at this farm right here this is a farm that I don't plant cotton on because the landlord doesn't want cotton planted on it so you know we rotate uh every other year rather than every three years but right here you see we've got yields on for these full season soybeans going back all the way to 2002. we've got an average of yield of 47 bushels per acre now looking here at our actual yields you know 2002 2003 we were making 34 bushels an Acres 39 bushels an acre 41 bushels an acre in 2004 then if you look later on here as genetics have gotten better as I've gotten better as a farmer our yields have really gone up 55 bushels an acre and 13 51 bushels an acre and 16 71 bushels an acre in 2019. currently this ground is capable of producing a lot more but we've only got an average yield of 47 bushels per acre because we're going back you know 20 years in the past pulling up yield history however this is where the trend adjust option becomes a big benefit to us it raises our average yield from 47 bushels an acre up to 55 bushels and Acres still lower than what we're capable of producing now but still significantly better all right now that I've explained how yield history Works let's move on to the price of the crop for any given year now every year we have to sign up for a crappie insurance by March 15th we have to determine our election levels and uh all the other options and actually sign up by March 15th there's no more signing up after March 15th so one of the factors that we need to know is you know how much work Revenue we're going to be guaranteed of every year and a lot of this is determined by the price of that commodity for the crop now corn cotton and soybeans the prices of that commodity for that year is determined in the month of February crop insurance takes the daily price advice of that commodity all the way through the month of February and figures what the average price is and then that's the price that we're guaranteed on our crop insurance for instance this last year you know crop prices have increased significantly and we were guaranteed a corn price of 5.90 per bushel cotton of a dollar and three cents per pound uh soybeans 14.33 per bushel now that doesn't mean that we're guaranteed to sell our Commodities at that price you know we're still free to sell our Commodities at what at at whatever price that we want to these prices are just used to figure out what are per acre Revenue guarantee is is able to be that year it takes our approved yield at the election level that we choose multiply it times the multiply it times the price to give us our per acre guarantee now all crop insurance comes standard with what's called Revenue protection whereas if the price of the crop Falls from February until Harvest then there's also the potential for another another claim you're also you're not only protected against yield loss you can be protected against price loss so take corn for example uh come in in February at five dollars and ninety cents per bushel say the price of corn in this fall is four dollars and ninety cents per bushel you know you've got a dollar per bushel yield loss so we might have a just say we've got a yield guarantee of 150 bushels per acre at 5.90 per bushel but that fall that price comes in at the price of 4.90 per bushel we can technically make above 150 bushels per acre but still draw a claim because the CR because the price dropped now the fall price is figured for the daily average in the month of October for those three Commodities now if the fall price comes in higher than what the spring price is our per acre guarantee is also raised so let's say the fall price comes in at 6.50 per bushel so instead of having 150 bushels per acre guaranteed at five dollars and ninety cents per bushel if we have Revenue production we're guaranteed 150 bushels an acre at six dollars and fifty cents per bushel so it kind of plays both ways if you have a price loss for the year you are protected but if you have a yield loss and the price goes up you're also predicted if the price goes to the upper upside all right I've talked quite a bit about the a lot of this depends on the election level that a farmer uh wants to be insured at so let's just use that approved yield of 150 bushels per acre this random that I was throwing out there that that's your yield history on the farm now that doesn't mean that you're guaranteed to make 150 bushels per acre through crop insurance what it means is that the is that that's the yield base on where you choose your election at for Crappie insurance we can choose anywhere from 60 five percent up to 85 percent coverage which is 65 to 85 percent of that approved yield for the farm now looking at this right here for this farm right here we've got a 10-year history of 135 bushels per acre that's our approved yield so if we want to get by with as minimal cost as possible on crop insurance we would choose to be insured at the 65 percent level which that means our yield guarantee on that 135 bushels per acre comes out to 87.8 bushels per acre if we so if we elect the 65 level we're only guaranteed right at 88 bushels per acre and at the 5.90 price that we have so far but that gives us a per acre coverage guarantee of 518 dollars per acre now on the flip side if we want to spend some more money and lower our risk you know and increase our guarantee we can go down here to the 85 percent level in that case we still got the same 135 bushel per acre approved yield but insured at the 85 level we're then guaranteed uh a yield of a hundred right at 115 bushels per acre or 677 dollars per acre of Revenue and then of course in between that we've got 70 75 and 80 80 percent now if we elect for the trend adjust that raises our approved yield from 135 bushels per acre on this Farm up to 151 bushels per acre so on at the 65 level that increases our guarantee from 88 bushels per acre up to 98 bushels per acre you know that's over a 10 increase in our guarantee and our Revenue guaranteed it goes up from 518 bushels per acre up to almost 580 per acre and we go down here to the 85 percent 85 of 151 bushel spray acre gives us a yield guarantee of 128.4 bushels per acre you know 14 bushels 14 bushels higher than if we didn't take the the trend of just it also increases our Revenue guarantee from 677 dollars an acre up to 757 dollars per acre so uh just electing the trend option gets us 80 more dollars per acre guaranteed all right now that I talked about the different levels that a farmer can elect let's talk about what that crop insurance actually cost because each level has its own price now I mentioned at the beginning of the video that the federal crop insurance is subsidized by the federal government now that the amount that the crop insurance is subsidized at determines on the election level that that you choose it can range from uh 80 percent of the premium being subsidized by the federal government down to 38 percent of the premium being subsidized by the government the lower the level that you elect at more of the premium is subsidized by the government and then the higher levels are not subsidized as much by the government thus your insurance premium raises dramatically as you go up in election levels now all of my Farms are insured under What's called the Enterprise unit that means each Farm does not stand by itself and have its own yield guarantee what it means is that all of my Farms of one certain crop in one County are all lumped together and I have an average yield for that crop for that County based upon what my yield history is for all the farms in that county while one Farm in that county might have a yield history of 170 bushels per acre the second Farm might have a yield history of 150 bushels per acre my County average would be 160 bushels per acre and having all of my Farms insured under the Enterprise unit it serves to drastically reduce my crop insurance premiums that I pay because basically you're lowering the risk to the insurance company because of what happens on one Farm really needs to happen on all the farms in order to draw a payment now in my case this is extremely beneficial because we Farm uh in two counties in Tennessee we Farm in the foremost eastern part of Crockett County and then the far most western part of Madison County I'm not spread all the way through the county our Farms have a radius of about 10 miles and within one County our Farms might only have a radius of about five miles so generally what happens in this area of the county is going to affect all of my farms in the same way in Madison County now if I was spread all throughout Crockett County like a lot of other farmers are in this area you know what happens in the western part of Crockett County there's a good chance that the same thing's not going to happen in the eastern part of Crockett County but if I use all my farms in that one County to get an average yield there's a better chance of not drawing a claim if I've only got one or two Farms severely damaged on the other end of the county but then on this end of the county those Farms are yielding higher and bringing my County average up thus drawing me to not not have a claim now if I was to elect optional units where each Farm has its own yield history and it's judged solely on whether that farm specifically has a claim or not my chances of drawing crop insurance would generally be higher but it comes at a lot steeper cost from quotes that I've gotten in the past Enterprise units crop insurance is roughly about half as expensive as selecting optional units and considering this will only be the third year that I've grown crop insurance since I began farming myself in 2005 the amount of money I saved on crop insurance premiums has been significant because so far in my history I've paid out more in federal crop insurance premiums than I've ever collected I've only collected uh crop insurance twice one year I think it's 2012 I think I collected a little bit and then in 2007 I collected I think about forty thousand dollars in crop insurance payments whereas over the course of that 17 or 18 years you know I've paid out a lot more in crop insurance premiums but looking at this year because we're located in such a small area we had a really bad Trail now halfway over in the county they caught a couple rains that I missed and if I was under Enterprise units and had it had crops further on in the county there's a chance I wouldn't collect as much crappie insurance money because I would have higher yields on those Farms bringing my County average up but because we're in such a tight area you know pretty much what happened to all of my Farms here in Crockett County happened to all of them in the same way in in Madison County so the yields are going to be fairly comparable now all of these quotes are what's quoted for me for Enterprise units I don't have the quotes for optional units but like I said it the cost on offshore units is generally about twice the cost of Enterprise units but if you look at this one farm with a with an approved yield history of 135 bushels per acre at the 65 level comes up to a cost of about six dollars and 20 cents per acre now this 65 percent level is federally subsidized at 80 percent what the actual cost what the the amount of money that the insurance company actually gives for insuring a farmer at the 65 level on this one particular Farm comes up to 31 dollars per acre now out of that we're paying six dollars and 20 cents and the federal government is paying the rest now if we go on down to the 85 percent level right here it's fairly federally subsidized at the 38 percent level and as you can as you can see the farmer's cost is almost 35 dollars per acre but the amount of money that the insurance company is is getting for to ensure this is a little over 56 dollars per acre so you see the farmer is actually paying a lot bigger share of the cost insured at the 85 percent level as opposed to the 65 percent level now looking at the trend adjust option which is on this line right here at the 65 percent level you know we went from being guaranteed an average of 80 88 bushels per acre up to 98 bushels per acre our cost at the 65 level only jumps from six dollars and 20 cents per acre up to 8.87 cents per acre so uh you know two dollars and 67 cents per acre increase in our cost for an additional 61 dollars per acre of coverage it makes a lot of sense it makes a lot of sense to choose a trendages option when you're fairly subsidized at the 80 level and I think the 65 70 and 75 levels are federally subsidized at the at the 80 level once you get up to 80 and 85 percent that's when the subsidy levels really drop off and you can see the raising prices all right to go from 65 percent to 70 percent Trend adjust we're going from 8.87 cents a bushel to eleven dollars and seven cents per per bushel increase of what like two dollars and 36 cents per acre then go to go from 70 percent to 75 percent you you know we're jumping up more we're jumping up a little over five dollars per acre and then as a subsidy level drops from 75 to 80 percent you know we're saying an increase of uh a little a little over 11 dollars per acre than to go from 80 to 85 percent you know we're seeing an increase of 22 dollars per acre as that subsidy level really drops down now where I've really found the sweet spot to be to uh comparing our guarantee versus the cost of the insurance is somewhere around that 70 to 75 percent level you know if we look at the 65 Trend adjust option or per acre guarantee is 579 dollars per acre now if we jump up to the 70 level that's going from 579 dollars an acre up to 600 and twenty four dollars per acre Revenue guarantee guaranteed which is an increase of around 44 dollars per acre but it's only to get an extra forty four dollars per acre of Revenue guarantee it's only costing us around two dollars and 30 cents per acre now to go from 70 to 75 percent you know we get an increase of about 45 dollars per acre in guarantee but it's costing us around a little over five dollars per acre to get that additional 45 dollars per acre which is not as good of a value as jumping up from 65 to 70 percent and then if we look going from uh 75 to 80 percent you know we're getting close to another 45 dollars per acre guaranteed but of that 45 dollars but to get that 45 dollars a guarantee it's going to cost us a little over 11 you know we got to pay over 25 percent of our guarantee in premium Now if we know we're going to draw a crop insurance every year well then that makes sense but if you only draw a crop insurance you know three years out of the last 17 years as we have then it doesn't make Financial sense to do that so that's kind of where I found why I found these uh 70 to 75 percent to be kind of The Sweet Spot of where I like to be insured at it gives you the most bang for your book normally I elect at the 75 level to get the maximum uh to get the maximum subsidy level but this year because our guaranteed price came in so much higher than normal all crop insurance prices raised across the board and I like to keep our crop insurance premium somewhere ten dollars per acre or less so instead of doing the 75 level I insured my crops at the 70 level this year which is see on this Farm gives you an average cost of 11.7 cents per acre now in the previous examples I was just showing you the cost on one Farm but let's look at the County prices because I'm ensured at the Enterprise you unit and let's focus mainly on corn because well that's what I'm gonna be claiming crappie insurance this year now I selected Trend adjust at the 70 level and my cost per acre in Crockett county is 9.56 cents an acre and gives me a yield guarantee for the county of 110 bushels per acre now I will be able to draw a claim if I yield less than 110 bushels per acre in Crockett County which is going to happen now what it actually is is going to be I don't know but say my Crockett would say my average yield for Crockett county is 70 bushels per acre which might actually be on the high end crappie insurance would pay me around would pay me for 40 bushels per acre at 5.90 per bushel which comes out to 236 dollars per acre now I wish I'd gone with a 75 level and if I had done that that would give me a yield guarantee of 118 bushels per acre which would have brought my payments per acre up from 236 dollars per acre up to 283 dollars per acre and it would have only cost me a hair over two dollars more in crop insurance premium so hindsights 2020. I wish I'd done the heck I wish I this year I wish I'd done the 85 percent but we had to make these elections by March 15th and at that time you know I'm planning on not drawing crappie insurance so I'm trying to minimize my costs while getting the best bang for my buck and now at the Harvest price this year comes in above 5.90 I'll get the I'll get the higher of the two prices and that means that my payment in this scenario will be more than what I just told you but seeing as how I'm making this video in the first of September the Harvest price will be set in October and I don't know what it's going to be yet now last year uh well when we were harvesting cotton because we had such a terrible cotton crop I mentioned that we were going to contact our crop insurance company and then after running the numbers with our final yields even though we had an absolutely terrible cotton crop we did not actually wind up drawing a payment because we were elected at the Enterprise unit of at 75 percent we had an average yield in Madison County of 856 bushels per acre which is not good but our guarantee at the 75 percent level Trend adjust was 812 pounds per acre so while we had a bad cotton crop it wasn't bad enough to trigger a crop insurance yield and that goes back to the fact that we've been growing cotton longer than any other crop we've got more yield history especially from uh 20 to 30 years ago that's figuring into our crop insurance guarantee which means it's harder for us to draw away crop insurance payment in a bad year than it is some of the other crops that we have that our yield history is based upon on on a lot more recent yields and then looking at this year you know we're definitely going to have a yield loss there's also a chance we can have a quality loss and insurance can help with that say on corn this year not only we're going to have lower yields we also could have quality problems with having aflatoxin in corn and not being able to sell it to the yield elevator so I'm not exactly sure how this is going to work because this is the first time this has happened in quite a while but I'm assuming that any bushels that test positive for aflatoxin that's uh that's coming out of the field we won't be able to sell it and then I would think that that's going to count that's going to count against our production you know because essentially we're not since we can't sell it we really didn't produce it that's the kind of the way I'm assuming it's going to go I'm still going to get clarification for my crop insurance company going forward but I do know that once it goes into the bin if it is positive for aphotoxin when it comes out of the bin I can't be paid for that because technically aflatoxin can grow in the bin so before we put our grain in the grain bin we're going to test every load see if it's positive for aflatoxin and I've got instructions from the crop insurance company that if we have a low test positive for aflatoxin to contact them and then what the process is going to be after that I'm not sure oh but I will discuss this in the upcoming Harvest videos as that matter gets clarified for us well all of that really is is a brief overview of how crappie Insurance works it's incredibly complex and the amount of things that we have to understand and look at to determine our best situation year in year out is is quite a bit and even then when elected for crop insurance we're basically having to predict the kind of year that we're going to have which is pretty much impossible so we just try to use educated guesses based upon our yield history what our production costs are going to be to try and select a crop insurance option that's going to cover our cost at least now this year crop insurance is going to be a really big help to us it's going to be the tool that it's designed to be which is to provide kind of a safety net in any given year this year our production costs are around 430 dollars per acre plus or minus to actually put in the corn crop our overhead cost of owning the business to raise these crops is around I'm just projected to be around 286 dollars per acre to give us a final production cost per acre of 718 dollars per acre that's roughly what we're going to have invested in every acre of our corn crop now our crappie Insurance guarantee it varies from County to County but for Crockett County for example at the election level that we've signed up for we're guaranteed 110 bushels per acre at 5.90 per bushel gives us a guaranteed revenue of around 650 dollars per acre so we're still going to lose money on our corn crop but because of crop insurance we're not going to lose as much money as we would have you know we're probably going to only have a net shortfall of around 70 dollars per acre as opposed to probably around three hundred dollars per acre if we didn't have crop insurance so like I said crop insurance is not designed for a farmer to make a profit off of crop insurance is designed to just provide a safety net in times of trouble to hopefully ensure that you'll be able to at least remain in business and farm another year so in this case it's going to do exactly what it should have so anyway I know that was a lot of data to look at a lot of numbers to look at you know crop insurance is incredibly complex and requires a lot of examination Every Spring and a lot of guesswork on what kind of year we're going to have going into the year to try and choose the right crop insurance that's going to provide us the maximum amount of benefit for the the amount of money that we're paying so hopefully this clears up a little of it it's definitely not as simple as a homeowner's insurance or vehicle insurance there's a lot of a lot of different factors you can consider and I just really touched on the very base options there's other stuff that we can add into crop insurance that may or may not give us a benefit of course all these extra options are going to cost so this is just the very base level explanation of of crop insurance but anyway I hope you found this video in informative and how farmers can use the crop insurance to to minimize their risk and also realize that your tax dollars are that you pay that goes to subsidizing the federal crop insurance program how it can really help ensure the uh the security of our food supply here in the nation no farmer likes to admit that he receives subsidies or whatever but in reality these these subsidies that we get are really important in securing you know a year after year supply of of high quality food at a lower cost to the consumer so in my opinion that the consumers the taxpayers are actually getting their money's worth in these subsidies that are in these subsidies that are paid to help ensure that farmers remain in business when they have years where things happen that they absolutely cannot control just depending on just depending on what happened in that year you know I could not control that we went almost 45 days with hardly any rain with most of those days having a temperature of 95 plus degrees that basically cooked my corn crop in the field I've done everything I can to try and prepare my soils to still be able to grow a crop but this year circumstances Beyond My Control could have really put a severe financial burden on remaining in business another year but because of crop insurance we will be able to remain in business another year and hopefully keep on producing the food and fiber that this country requires but just know that these subsidies that are paid these subsidies are going directly to the crop insurance company the crop insurance is the one that's receiving these subsidies the farmers not receiving these subsidies we're just all we're doing is just able to have the benefit of actually being able to afford this crop insurance that we need because because without the federal subsidies it just would not make sense Financial to leave for us to purchase crop insurance because it simply would not be affordable year in year out for us to do that it would take every bit of the small amount of margin of profit that we have just to pay on crop insurance and there would be a good chance that we would never be able to draw any money on crop insurance considering this is only going to be the third time in 17 or 18 years that I've drawn crop insurance I hope you found this video informative cleared up a little bit of understanding of how crop insurance works and you know if you got any other questions about crop insurance be sure to leave a comment down in the comment section below I'll do my best best to answer it anyway guys I appreciate all of y'all watching stay tuned we'll be back with some Harvest videos coming up soon