COTTON POLICIES
Things to Consider
In the 2018 farm bill cotton was reintroduced as a covered commodity through the programs that are administered by the Farm Service Agency. Seed Cotton is now eligible for PLC or ARC elections. The election the farmer makes at the FSA office will effect the options that they can choose through federal crop insurance. Our role is to educate the growers that we work with to ensure that they are considering all options available at both the FSA and RMA and how each decision effects the farms risk management plan.
Building Policy Unit Structure
Important Options to Elect
Yield Adjustment
Yield Adjustment
Yield adjustment replaces a low yield for a particular year in a producer’s APH database with a yield equal to 60% of the county t-yield.
Yield Cup
Yield Cup
Yield cup keeps the approved yield for each farm from dropping more than 10% as new yield records are added each year.
Yield Exclusion
Yield Exclusion
Yield exclusion allows certain years to be removed from a farm’s production history. To be eligible for exclusion, the county yield must be at least 50% below the simple average of the county yields for the previous 10 consecutive crop years.
Trend Adjustment
Trend Adjustment
Trend adjustment increases a farm’s guarantee by adjusting the yield history upward in accordance with the trend adjustment factor established by the county. This option allows a producer’s 10-year production history to match his/her current yield potential.
Level by Practice
Level by Practice
Where applicable, an insured may select different levels of coverage for irrigated and non-irrigated practices. For example, a producer may elect to insure irrigated acres at a lower level than non-irrigated acres.
Seed Endorsement
Seed Endorsement
This endorsement offers yield loss coverage for cottonseed at a specified price per pound. The level of coverage provided through seed endorsement will match the coverage selected for cotton lint.
Supplemental Coverage Option
SCO
The supplemental coverage option provides additional coverage for your underlying crop insurance policy. SCO losses are paid on an area-wide basis and are only triggered when the county falls below 86% of the expected yield or revenue. The government subsidizes 65% of the SCO premium. ARC/PLC elections at FSA will affect product eligibility.
STAX
STAX
STAX provides coverage for up to 20% of the expected county revenue. Loss payments begin when the area revenue falls below 90% of its expected level. STAX may be purchased as a standalone policy or as a companion. The government subsidizes 80% of the STAX premium. ARC/PLC elections at FSA will affect product eligibility.
Private Products
Price Flex/Select
Price Flex/Select
These private products help us establish a higher planting price guarantee when the market is volatile and shows better opportunities outside of the standard price discovery windows.
Open Boll Policy
Open Boll Policy
This product extends coverage to unharvested cotton while in the open boll stage for direct loss caused by wind. We think of this product as a good way to protect the top end pounds above your APH guarantee. In certain areas that is susceptible to frequent hurricanes during harvest this can be a valuable risk management tool that will increase the farms bottom line during a hurricane.
Hail and Wind Coverage
Hail and Wind Coverage
This is an additional product that can be bought along with your MPCI insurance coverage that protects against hail and wind in most areas. We typically like to see this on irrigated corn but it is also a fit for non irrigated corn in many areas.
