Tart cherry fruit removal and diversion credits impacts on crop insurance

Helping growers to make informed decisions about the implications of fruit removal and diversion credits on crop insurance.

Cherry tree

We have had a few calls from growers that are interested in removing tart cherry fruit as a cost savings measure for the 2019 season. However, the decision to remove fruit may affect crop insurance payouts. Additionally, at this time, we have only preliminary data on how to thin/remove fruit using ethephon in tart cherry, and the tactics were successful (about 100%) in both 2017 and 2018 when ethephon applications were made at high temperatures (greater than 80 degrees Fahrenheit); these high temperatures continued for four to five days after ethephon applications. Because we have no data on using ethephon at lower temperatures to remove fruit, growers will need to make that call based on the future weather forecasts. Some growers are also considering lime sulfur to try and burn blossoms to remove fruit from the tree. Lime sulfur has been used as a tactic to remove blossoms for thinning apples with some success, but this method has not removed the all or even the majority of blooms.

Removing tart cherry fruit from the trees will obviously reduce costs as there will be no insecticides spray because there will be no fruit for the insects to infest. As a result, growers could manage the foliage just for diseases: cherry leaf spot and powdery mildew. There are many cost-effective options for insect management for the key diseases in tart cherry: plum curculio, cherry fruit fly and spotted wing Drosophila (SWD). Obliquebanded leafroller can be an issue in some years, but the overall obliquebanded leafroller populations have been down in recent years; this season may be a good one to eliminate obliquebanded leafroller sprays for growers on a budget.

Costs will vary with the size of the farm, bulk purchases, generics, numbers of sprays, etc., but if we use a conservative estimate for the following program, a full-season insecticide spray program could be as low at about $69 per acre. However, with the way the season is currently going with the cool and wet conditions, we may need additional sprays if the season runs long. By knowing estimated insecticide costs, you can make informed decisions on whether or not removing fruit is advantageous for their farm.

The following program is a rule of thumb for numbers of insecticide sprays and/or costs of different materials.

Table 1. Estimated costs of tart cherry insecticide spray program for 2019*

Insect

Number of applications

Material

Cost/acre

Total cost/insect

Plum curculio

2

Actara

$17

$34

Plum curculio + SWD combo

2

Warrior

$6.60

$13

Cherry fruit fly

1

Admire Pro

$4

$4

SWD

3

Pyrethroid combos

$6

$18

TOTAL

     

$69

*Costs may vary from farm to farm. Numbers are meant to be estimates only.

However, more importantly, consider whether or not to remove fruit if you have tart cherry crop insurance. First, unfortunately, growers that have no home for their fruit is not considered an insurable cause of loss. Federal insurance will not cover a farm whose fruit cannot be delivered to a processor; only “acts of God” or environmentally responsible crop losses and natural market declines are considered insurable causes of loss.

If growers abandon the crop before they know the fruit set, the approved past yield average will be applied to the abandoned acreage—the adjustors will use the past farm average and apply it to the acreage. If the crop is naturally shorter than the farm average and growers maintain the crop until the adjustor can come out and appraise it, the appraisal will be used rather than the farm average. For example, if the crop for 2019 is 5,000 pounds per acre rather than the average of 10,000 pounds, then the 5,000 pounds per acre yield will be used and multiplied by the estimated price per acre.

Additionally, because the tart cherry crop insurance policy is a revenue policy, the low cost of tart cherries projected for 2019 will likely influence crop insurance payouts. For example, if the adjustor uses the farm crop average of 10,000 pounds per acre and projected price for tart cherry in 2019 is estimated to be $0.14 per pound (based on 2018 NASS price), the revenue would be $1,400 per acre, which is likely lower than past revenue. However, this depends on the guarantee for each individual policy.

If growers estimate that their 2019 crop is larger than the 10-year average, they could try and thin it down. If growers do decide to thin the crop, they need to call their crop insurance agent prior to potentially adjusting the crop. We also recommend that growers look at their crop insurance guarantees before applying any crop removal tactics.

Diverted pounds of tart cherries are also considered a human-made loss and not a result of environmental loss or market decline. We have been working with Risk Management Agency (RMA) to consider diversion a market decline, but RMA has not granted approval for diversion to be a downturn in the market. All diverted cherries are counted for production but at an 80% of the annual price. For example, last year, the RMA price for tart cherries was $0.14, so that price would be multiple by 80%, and $0.112 would be the going rate for diverted fruit in 2018.

Lastly, if you have any questions or concerns about removing fruit, contact your insurance agent for clarification. Also, see our follow-up article on fruit removal and low spray inputs for tart cherries.


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