2022 Crop Insurance Decisions – How to Protect Your Crop Investment?

March 9, 2022

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The 2022 MI Ag Ideas to Grow With conference was held virtually, February 28-March 31, 2022. It was a month-long program encompassing many aspects of the agricultural industry and offering a full array of educational sessions for farmers and homeowners interested in food production and other agricultural endeavors.  More information can be found at: https://www.canr.msu.edu/miagideas/


Video Transcript

 All right, well I've got 6:35 So why don't we get started. So good evening everyone. Welcome to the my AG ideas to grow with conference And just a reminder that this is a month long event. We have a lot of really great session scattered throughout the month. So please visit the website to learn more about the offerings. And my name is Mariel Borgman. I'm going to be the host moderator tonight. I'm a community food systems educator. I work across Southwest Michigan for MSU Extension. And I'm pleased to be here tonight with my colleague John Laport, who's going to be talking to you about crop insurance decisions for how to protect your investment this year. It should be a really good program. I'm excited to learn about this topic I don't know too much about, so I'll be a participant as well. So this event is allowing us to put it on free of charge. And so we definitely want to thank Greenstone Farm Credit Services, North Central Sare,  Mark Wolbers, excuse me. Mark Wolbers and the Alaska pioneer Fruit growers association are generously sponsoring our event. Okay, now I'm going to turn it over to John. Take it away, John. Alright, thanks Mariel. And also thank you to our sponsors for supporting this program. This is really nice program that we get to offer and it's really special that this is the first year, it's part of ANR month. So very, very excited about this. So tonight we're going to talk about crop insurance and focus on understanding a lot of the, really we're going to get into first the basics of what goes into yield and revenue protection. I want to also do a little bit of policy factor fiction to kind of help set in some of the things we're going to go over. Then we want to follow up with some kind of insurance strategies, recommendations that we typically see for folks. I also want to touch on a little bit of benefits for beginning farmers. A few nice little things that are part of the policies that work really well for those folks. And then if we have time at the end, go over just a couple more additional crop insurance tools that tie into the actual yield and revenue policies themselves. So let's get right into things with the yield protection. It protects against losses from crop yields. and crop yields only for pretty much what you would think of from the title of the policy. Based on actual production history or APH. This is a very common acronym that you're going to hear in a lot of different crop programs. So it's that production history that the farm actually has. Coverage ranges from 50 percent up to 85% of whatever that production history is. And you can increase that coverage in 5% increments. The premiums that are paid to use the insurance are subsidized, which is really nice. And then also the policy contain the replant and preventative plant coverage as well. So if you're not able to actually get crop planted, you prevented from planning or you have, but you have to go back in and replant. There are some additional coverage that kicks in for that as well. When it comes to crop insurance, There's a lot made about the units that you can have covered. There's basic units which is a division of one crop by an ownership split. So a couple of different examples. You can have all the owned and rented land can be considered a basic unit. If you also have some shared ground with a landowner, that could be considered another basic unit. So you can kind of separate based on who the ownership is of the actual crop there. So if you're doing things on shared that can be a unit or are all the owned and rented can be together as well. Another option is an optional units where the division of it's the same idea with these basic units, but the division is now more on a township section. So if you've got fields in different township sections, you can actually group them together. And this was really helpful if you've got fields that are in different townships that have a lot of significant variability. So if you've got a sandy loam versus a clay. The one thing to kinda keep in mind though, because you're talking about separate units. That's if you're doing option all, especially because you're talking about different variability types that you're worried about. You're going to have to keep separate records for those individual optional units. So if you selected to kind of set your coverage up within an optional unit, you want to make sure to keep really good records. Probably the most favorable or sought-after unit is the enterprise unit where you can actually group the entire crop together regardless of where it's located in the county. This is really helpful if you're fields are pretty uniform. There's a significant premium discount that, which is what makes us so desirable for people to go after. But the catch is you've got to meet certain eligibility requirements to qualify. And that's something that you want to talk to your crop insurance agent about. Just to kind of check the boxes to make sure that that's an option for you. But it's really helpful unit to use. And there are some provisions now we're that can actually cross county lines as well. The reason this makes a difference is that the premiums themselves are a little bit different in terms of what unit you're using. So as we, as we look at basic units, we can see these in enterprise units. You can see from, from the enterprise to the basic, the basic to the optional, there is an increase premium costs. And the reason for that is because you're really kinda ratcheting down to that, that production information and really differentiating field by field versus maybe township by township or maybe county by county. And so depending on what units you're using, your premium is going to be a little bit different. So the other thing with yield protection is that there are several provisions that exist to really maximize the yield that's being protected. Transition yields, replacement yields, yield cups, yield floors, and then a trend adjusted APH are all different provisions that exist within the yield protection policy. A transition yield. Transition yields are really helpful for individuals that don't have any production history so for our beginning farmers that are out there. You maybe have a case where you're starting out with no production. What this does is it calculates a yield for each crop within a county, and it can be used in any of the first four years of that insurance policy. And so if you've if you've got a couple of years in-between, especially if you're looking at a rotation, you may have some blank year starting out. It kind of fills in some of those gaps as you go along. It's based on the amount of production history that the individual has. So there's a determination terms of what you can actually use. And to illustrate, if you have no history, you can use 65% of this transition yield. One-year of history it bumps up to 80 percent, two years goes to 90 percent. And then if you have three years of history, you can use the full transition yield. On the next screen here I want to show an example of what this kind of looks like. So in our first year, we've got no production history. And so we're using 65% of this transition yield, which for example is a 140 bushels. And so we've got 65% of a 140 is 91 bushels. So for the first four years we're looking at in terms of our history, that becomes our average. But as we jumped to having more production history that starts to change. Say we have our in our first year, we get a 180 bushels on corn here that we're talking about. We now get to use the 80 percent in the other three years, which increases our average or our APH from 91 bushels in the first period to now a 129. The same idea works in Year 2, where we think about we've got two years of production history. We're using 90% of this transition yield. And so we've got a 126 bushel that we plug-in for these missing years. And again, our APH increases. The idea is that as we start to gain more production history, we're using more and more of the transition yield until we finally get to a point where we have our own production. The idea here is that your production history is going to be better than that transition yield. However, if you throw a 0 into an average, that really brings down the average. So the idea of this transition yield is to help people that have got some blank spots in those early years to make sure they're still maximizing their coverage. A replacement yield is kind of similar in the fact that it substitutes 60% of the transition yield for a poor yield in a given year. So if you've got poor production, you've got, you don't have a 0 yield, but say you've got  a disaster yield. You can replace that yield with 60% of the transition yield. And so we think of a couple of examples here recently. 2019, we had excess of water and flooding. 2012, we had a significant drought. There were years there were there are some production, but there are also cases where there is no production because we couldn't get things planted or because we just had really poor yields that year. So replacement yield plugs in 60% of that transition yield to keep from having a 0 in that history and bringing down the average. A yield cup. Can be used to help ensure that the APH doesn't drop more than 10 percent of whatever its current level is when adding in a poor yield. And so if, even if you're using a replacement yield and you're also using the option of a yield cup. It makes sure that whatever that APH was before, adding that poor yield in doesn't drop the average down below 10 percent from where it was. So it's a nice little additional safety net. This used to be an automatic that you got with your policy and one of our previous farm bills, they made it optional. You do have to pay a premium to use this feature. Whereas before it was an automatic. Similar to a yield cup is a yield floor, but it adds support over a longer period of time. The idea here is that you can get a maximum of 80 percent of that transition yield depending on the years of history you have for production. And so, for example, if you have one year of history here, a yield floor will keep your APH from falling below 70 percent of the yield. Two to four years, you won't fall below 75 percent of that to yield. And then in five or more years you won't fall below that 80%. The idea is that a yield floor is one set of protection to keep your APH from falling too far. The yield cup keeps it from falling no more than 10 percent of where it was. So you can kinda see where the two maybe line up together, but can be used separately depending on how you want to try to maximize your yield that you're actually covering. One of the more popular options is this idea of a trend adjusted APH. This is where the insurance looks at the historical trends of the crop yields that are tracked within each county. And so what happens is your APH gets adjusted to follow whatever that trend is. So if you think about historically a trend to say two bushel, increase in corn, your APH is going to be raised by that two bushels because not following that same trend increase that the county has been seen. Some counties that can be a bushel, bushel and a half. But whatever that trend is in your county, you can actually do that. Now to be eligible. You have to have an actual yield at least one of the last four years. So if you're in a crop rotation, one of those years has to have an actual production history for that crop that you're looking to use that trend adjustment on. And then this is, this does not impact your other add-ons. So yield cups, you'll floor replacement yields. Those happen first and then the trend adjustment is made on top of those. Okay? What we have found with a trend adjustment, why this is so popular is that the premium to pay for the ad on the trend adjustment is often cheaper than trying to go that extra 5% up in the coverage level from it in that 50 to 85 percent range. And so that's what people kinda look at from that standpoint. Now when it comes to yield protection, the first, the biggest thing is what payment potential going to look like for the policy. We've got all these pieces, but what's the actual payout going to look like? So the coverage calculation is our first step in understanding how the policy really functions. Where we take that APH yield, we're going to multiply it by the coverage percentage to get a bushel or yield guarantee. You're going to hear yield guarantee use quite a lot in the verbage. Bushel guarantee is sometimes used. But what it amounts to is say the APH for your farm is a 150 bushels and you have 75 percent coverage. Well, when you multiply those together means your covered bushels, your yield guarantee is a 112.5 bushels. Any kind of a yield loss is calculated by comparing your harvested production to those covered bushels. So if the yield produced is lower than that covered bushels, an indemnity or loss payment is then made for the difference. Now to get to a price, the bushels are valued on a market elected price. And we're going to talk about market elected price a little bit further on. It's something set by USDA's Risk Management Agency who oversees the crop insurance policies. But this market, elected prices really important to both yield. And we're also going to talk about revenue protections. We move on to that next. So revenue protection is very similar to yield protection. It has all the same provisions that are in yield protection. You're still looking for coverage on losses to crop yield. It's used on based on APH. The same add-ons for maximizing that yield of being protected are all there. Your coverage choices and the percentages are the same, the insurance units are the same. And the premiums are also that you're paying are also subsidized. you are not paying the full price for this policy. What separates this from yield protection is that revenue addresses both yield and price. And so on the price standpoint, what we look at is we move from this idea of a yield loss to we're trying to protect against revenue loss due to either a yield loss of some kind and, or price changes in the market. So what happens is we convert our bushel or yield guarantee to a dollar guarantee on a per acre basis. And the calculation for that is we basically take that yield guarantee, multiply by a market elected price to get this revenue guarantee. Again, revenue guarantee is going to be another one of these terms you're going to hear a lot. This is the calculation to get to it. An example would be taking that yield guarantee. We showed a couple of slides before that, a 112.5 bushels and multiplying it by a this market elected price. In this example, I'm using $5.90 on, on corn. And we're looking at a revenue guarantee of $663.75. A payment gets made if their revenue received is lower than that revenue guarantee. Okay? Now, the revenue received is really important. We're going to walk through and the discussion of how that comes about. Because it's not necessarily looking at the production that you've raised and what you have sold it for. Okay, so I want to kind of throw that out there as a little bit of a teaser going into the rest of this that what we're talking about is the value and the revenue are going to be still be using these market elected prices. So let's talk about those a little bit. Cuz this sometimes is a little bit confusing for folks. First off, when we talk about market elected prices, we're basing off of the Chicago Board of Trade futures market. We're looking at futures contracts. Futures contracts, if you were to actually take out a contract which we're not having to do for insurance, but we're using the prices from that market to help us set some values. A contract has a delivery date. And so we look for corn on a contract where the delivery would be presumably in December. Soybeans we're looking in November and then for winter wheat, you'd be looking at September. Well, what we look at is one of two types of market elected prices when it comes to revenue protection. The first is this idea of a base price. So this is our, our first-price that we look at. What happens is USDA's Risk Management Agency will look at what on the market. So all the trading that goes on for these December contracts during the month of February, they average them all together. And whatever that average number is, becomes the base price. The same happens for in February, looking at an average of all the values for the contracts on soybeans that would be delivered in November. That average becomes a base price. Now these were just released for 2022 here on March 1st. And then what happens after that? Well, excuse me for for winter wheat, we're a little bit different where we don't look at a full month in terms of one calendar month, were a little different where we start at about the middle of August and look through the middle of September. But then the second prices, we look at what we call a harvest price, where just before we get to that December timeframe, we're still looking at December contracts, but now we're looking at what the averages during the month of November being traded on the market and whatever that average price of December contracts was through the month of November becomes our harvest price for corn. We do the same thing for October. During the month of October. We're still looking at November, whatever the averages are for those November contracts in October becomes that harvest price. And then wheat gets a little bit confusing because we're still looking at September so that the timing is a little bit different in terms of winter wheat. But we're using looking at what those average prices are in September to kind of set the the actual pricing. And so we're a little bit off on timing on wheat, its a little bit more, more of a challenge to us to follow. But essentially what we're looking at here is with this base price, when it's announced in early March or September for wheat. That's used to calculate what we call a minimum revenue guarantee. And so we show this calculation here of APH times our coverage percentage times our base price. This minimum revenue guarantee essentially becomes our coverage floor. Our revenue guarantee will never fall below whatever this calculation is. However, it can go up. When we look at the harvest price, which we talked about, it's announced early November, December, depending on the crop or September for wheat, if it ends up being higher than the base price, that gets used to calculate a new higher revenue guarantee. So our revenue protection can actually go up if our harvest price is higher. Okay? So what this means is that because of the way this works, There's a couple of different ways to look at how revenue protection loss payments really come through. If the harvest and the base prices are exactly the same, then revenue guarantee is really no different than your yield guarantee. They're going to be calculated the same. The numbers are all going to be based and valued the same. So there's really no difference between the two. However, we don't often see that the prices are exactly the same. Mathematically, there's always some difference there. Now if the harvest price is higher than that initial base price, the revenue guarantee increases. But so does the value of the harvested production. Because that market elected price at harvest is used to value the crop you just grew. So we're not looking necessarily for what you actually are selling the crop for. The production is valued based on this harvest price. And what this does is this is actually a feature that protects the farm if it decides it wants to take some of that grain and go pre-harvest market or forward contract some of it before getting into the harvest season. Now at the same time, if the harvest price goes lower than the initial base price. This is where the confusion on the minimum guarantees sometimes comes in. Because the, the system kind of acts like a policy operates as though the covered bushel seemingly went up. And that's because as we talked about the minimum revenue guarantee is set by a base price. And so for that minimum guaranteed to make sense, at a lower quote unquote harvest price, the covered bushels need to increase because remember we're valuing that harvest using the harvest price. So an example of that here is if we think about our use in our base price, we go back to this initial calculation where we had a 112.5 bushels at 590, that their base price on corn. So we've got this $663 and 75 cents. What we're valuing our production at a lower price in this example of $5.41 sense. But our guarantee can't fall below that $663 and 75 cents. Well, to make that work, we have to have about a 10 bushel increase just to make the math kind of work itself out. Now you're not going to see anything like this anywhere written down. They're not going to give you a print out from the insurance. But when they do the calculation in the background, this is kind of what's going on and what happens. It's kind of this weird thing where even though the production is valued lower, we're still getting more coverage because we've got this minimum guarantees set in place. So it's a really nice feature. And so we get some coverage three different ways here. I want to walk through an example here of a couple of different example to kind of illustrate this a little bit more for folks. So let's start off with this idea of the same price for both yield protection and revenue protection. We've got 40 bushels is our APH or average production. Again, we're going to use 75 percent coverage, a nice easy number. We have this base price of $14.33. This is the actual base price that was just set on March 1st. And so what we have are these guarantees of at 75 percent, we're looking at 30 bushels on yield guarantee. But we've got $429.90 over on the revenue guarantee side. And the reason is that because this again goes back to this minimum revenue guarantee, we've multiplied our, our 40 bushels times our coverage level of 75%, multiply it by a $14.33. And now we're looking at our revenue, our dollar guarantee instead. So let's talk about we get to harvest. I say harvest is really poor. We've got only 22 bushels, so we're eight bushels below our guarantee. We're going to get a payment from yield protection. We also know we're gonna get a payment from revenue protection. Well, our harvest price here is again the same. So it's $14.33. So there's not a new guarantee. We're going to stay the same as what our minimum was. But our indemnity there are lost payment is going to be exactly the same. We've got a $114.64. And the way that works for both, well, for the revenue side is you take that guarantee. We're going to subtract out the production times that harvest price. Now a really important factor and understanding revenue protection is the fact that we're valuing the production on this harvest price. And because it's the same as the base price, there's no difference here. So we end up having production value of 315 dollars and twenty six cents. And we end up getting the same amount of this $114.64 for our payment. Now what happens if the price goes down? We started out with the same scenario. And notice that there's no change here on the payment for the yield protection. Because a key thing for yield protection is the base price is the only price used to value your production. It doesn't adjust with a harvest price like revenue does. That's one of the key is that separates the two apart. So let's look at this from an example of the harvest prices lower if they went down to $13 and 25 cents. Well, there's not a new guarantee because that's lower than our minimum. So we're going to maintain our guarantee at 420, $9.90, but we're going to get a little bit higher payment. I think I have an error in my calculation here. Apologies. The actual payments should be looking here. So actually be a higher value here. We'll see it here on the next screen. I apologize, it's actually $138.40. The reason for that is the actual production is valued with this harvest price, okay, So we didn't change our yield because that stays with the base price. But when we multiply our production with this $13.25 , we have a lot lower value on our production numbers here. And so we end up with this $138.40 is our new payments. So you're seeing about $24 difference between the payments because the price went down. And the big key to that is this harvest price. So let's look at another scenario where the price increased. Again, no change to yield. Our base scenario is the same going into harvest. But now the harvest price is higher at $15.20. Now we have a new guarantee at $456. And the reason for that is because you have a higher harvest price. So we're going to calculate a new guarantee. Now we look at our 40 bushels times the 75 percent coverage at $15.20. And we have this new guarantee of $456. So what this means is when we do the math, we end up getting not quite as big as the jump is what we got when the price decreased. But we're still, and that's mainly because the production is again valued based on this harvest price. So went up, we have a higher harvest price, or what we actually produced is value a little bit higher. But the one big key here is to highlight is when you look at the yield here, it's a 114 that still didn't change. And we are still a few dollars ahead, about $7 a head per acre on this guarantee even though the price increased. Okay? And so that's really important to think about as we think through some of the advantages of using the revenue over the, the yield protection option. Biggest key is that revenue offers three-way protection. You're covered if the yields are low, you are covered if prices fall. And then you're also covered if you end up with a short crop. So if you have poor production and prices rise, okay. And so those were some of the, some of the snails we just walked through. The other thing to remember is there's also some advantages when it comes to the loss payments, are these indemnity payments. The three-way coverage means you've got a greater chance of getting a payment. There may be actually larger payments than what you're going to see from yield based insurance. I, they may actually be competitively priced when you look at the premiums for yield based insurance. But what's really nice is that you can use it as an integral part of your marketing strategy. And that kind of brings us over to this little area factor fiction that I wanted to talk about. We've got this scenario here where we've got revenue protection, went ahead and forward price 75% of the APH. So right up to that coverage level. And we've got 400 acres of corn that we did this on yields or bad, our prices skyrocketed. And it's this concern of we can't deliver on our contracts. We're going to lose a lot of money. Is this fact or fiction. Well, this is actually fiction because you are covered. And it comes back to this idea of the final revenue guarantee is recalculated with that harvest price. If it's higher than the base price, that coverage increases to help offset the cost of going out to buy the higher price grains you can feel your contracts. Now, let's look an example is to kinda show a scenario where this actually works with what we've kinda got set up here. So we just mentioned 400 acres of corn, 180 bushel, APH, 75 percent coverage. When we do the math. What this means is 54 thousand bushels are covered. So this insured amount is what we use to pre-harvest market. As a scenario goes. We got it all sold. And then July turn dry in our corn yields were just horrible. Well, let's look at an example of what this looks like. So we marketed the corn and we're going to say 590. I'm going to stick with using that base price just for an easy number. So we've got $318,600 that we're looking to bring in for revenue. We only produced out of that 54 thousand. We barely got not quite 3003037,800 bushels. So we're short 16,200 bushels that we need to fill the contract. That's a lot of bushels. Well, if we buy them back at, say what the current price is, $7, we're going to have to pay out a little over a $113,000. Well, the way the crop insurance works, remember it's based off futures. So the crop insurance indemnity payment would be based off whatever that future number is. In this example, say $7.25, we're looking at about 25 cent basis. So we're actually getting a payment to more than cover. What we're going to have to pay to actually go out and buy those bushels. So when we do the math, we end up a little bit ahead in this example, we're at $322,650. And that's because we have the coverage and the indemnity payment to to come in. Now, the one thing to remember is that you're not always going to see a scenario like this where automatically going to have a dollar for dollar coverage or you're going to have a case of where you're going to make a profit. And the reason for that is, the idea is that this is going to minimize the loss you would have. Because even in the scenario where I'm showing about a $4,000 advantage. The thing to remember is there is some basis opportunity and risk, and there's also a premium that you have to pay for. So by the time you pay the premium, this four grand advance that you see kinda gets written off by the premium. But the idea is instead of spending a 113,000, you're, you're having some of that premium covered and you're not having to go out and spend that's big check to go out and cover the contracts. Now granted in a scenario like this, one thing to keep in mind is that if you are in this scenario, the contract that you have with the grain owner, they're probably going to be willing to offset that and just kind of write off whatever you left on the contract. However, why this is important to understand as a safety net is if you were in the reverse situation where you have contracted up to 75 percent of your bushels that are covered. And the price goes the other way. Say the price has dropped down, low, gone down, you've got that minimum guarantee. You also have the option to go out and still fill this contract. You're going to get an indemnity payment for the loss. You're going to get an a payment for the fact that prices went down. And you can go out and buy those cheaper bushels to still fill the contract. And so the ideas here, you've got some protection either way the price does go. But even if the prices go high, you're going to minimize that loss that you would potentially see by going out and buying a lot of bushels. And so the kind of wrap up this idea of this scenario with the revenue, we kind of break it down in this kind of quadrant graph of, you know, if, if you've got low yields and low prices, you're covered. If you have got a high yield and low prices, you're covered. And then if you've got a low yield and high prices, you're also covered. Now if you have a high yield, the high price, you're not really worrying about crop insurance at this point, we need to have more of a conversation on tax management. Now you're going to kind of manage the high revenues that you're going to be dealing with. And so this is kind of a nice way to think about the, the insurance, depending on which way things go at the market and with your yields, you've got really good coverage using the revenue protection. And it's got all the components of the yield protection which make it a really nice fully covered program. So as we think about crop insurance strategies and recommendations automatically, the first thing that, that's pretty obvious at this point, Recommend revenue protection. You're going to see that a lot of farms will use a range of 70 to 85% coverage. I think the best investment is often somewhere in that 75 to 80 percent when you consider what you're getting back for protection plus the premium, 85% can be a good coverage level, but it really depends on your premium. And if you've got irrigation, our irrigation users may want to consider something lower than 70%. The idea is to think about what risk are you offsetting with your irrigation? And what risks are you looking for any insurance to kinda pick up the coverage on. And so you kind of use the two in combination. And that may shift your percentage to something maybe lower than 70 percent, or maybe still somewhere above 70%, depending on what kind of risks you're looking to offset what the insurance. And so that's, that's kinda what you want to think about as you are already covering some risks. So what's still left that you need to kinda pick up? Enterprise units are definitely recommended if you can use them. Oftentimes we find for folks that the trend adjusted APH is worth the investment, worth the money you pay for that part of the premium. And then for beginning farmers, yield cups and floors are really helpful in the early years. And then the nice thing for beginning farmers, so that that transition yield that we talked about, they automatically receive 80 percent to be able to use that in cases where we were talking about for the yield cups, where before was only at 60 percent for everybody else. And beginning farmers also get 10 percent more off on the premium. But so as a beginning farmer, There's some nice incentives to actually have some of these programs and put them in place. The, there's a couple here I wanted to kinda go over a couple of things, programs that are nice little add-ons that kind of go along with this. The first thing is there's this pandemic cover crop program. If this was, what it does is it offers premium support for producers who have insurance on their spring crop. So you've got to have insurance going into this year. And you're planning or excuse me, you've planted a qualifying cover crop during your 2021 crop. The thing with the qualifying cover crops, they can include cereals and other grasses, legumes, Brassica and other non legume broadleaves. And then you can also do a mixture of two or more that still can be used to meet the covered, which is kinda nice so you have a lot of options in terms of what type of cover crops you're using. The premium support can be up to $5 per acre or no more than whatever the full premium owed is, so depending on your coverage percentage, you may be less than $5 on your premium. So it may fully cover the premium just because you're, you're actually using a cover crop. And now this was created to help maintain cover crop systems amid all the financial challenges we've seen from COVID, the future beyond the 2022 years, really, really unknown at this point. It's one of those things that I'm hoping to see continues for at least for the next couple of years because it's a really nice incentive program to, to get people to use cover crops and maintain those systems that they have in place. The other program I wanted to highlight here was a pilot program that came out this year called the post application coverage endorsement or pace. It is a supplemental coverage for corn growers that use a split nitrogen application. The catch is it's only available on dry land or non irrigated acres. And so what it does is it's looking at your intended applications. It's going to focus on that period during the V3 and V10 growth stages. So we're looking at side dressing, so must have been. So part of the part of the intention is that you get coverage, if you were prevented from weather or field conditions from actually getting that application on. So this is a really nice protection program around nitrogen costs, which for this year is really important considering the costs that we have to buy that, the coverage level percentages can be from 75 to 90 percent. Again, they use 5% increments. But this can also different from your coverage levels on your revenue or your yield  guarantee policies. Especially because it'll go up to 90 percent for your cap at 85 on the underlying policy. Farm records play a really significant role in terms of eligibility. You have to provide specifics on the fields, your intended practices, and the fertilizer sales receipts to show that you basically had that intent of trying to make the application, but were prevented from doing so. So they're going to want to look at some record information to verify that you were going to make that split application during those V3 to V10 growth stages at some point to, to make sure that you're going to meet that qualification. Now, again, we will look at payment. The one thing that's a little bit more problematic because this was, or excuse me, is that when in comparison to yield and revenue guarantees, it's a lot more complicated calculation here. We look at approve yields times producer share. By the coverage level. We're looking again at a maximum of a projected in a harvest price. Final loss factor is a new thing that's added in here. And then of course, the affected acres  so a little bit more lengthy of a calculation. One example, they provide from USDA is 200 bushels times a 100 percent ownership at 90% coverage, $4 dollar price. And they have this final loss factor, 15% on a 100 acres to show about a $108 per acre or $10,080 for the entire, 100 acres. Now it's really important to this whole calculation. Those other pieces are important, but they're really important. Thing to remember is this final loss factor depends on the nitrogen supplied between your pre and post applications. And this kinda comes back to why your farm records are important. If you have less nitrogen supplied in the pre application, your loss factor is going to be higher because you were looking to put more nitrogen on that second application that was prevented. However, if you have a higher loss factor, that also means you're going to pay a higher premium. And so the trade off to that though, is you may also have a higher loss payment. but a higher premium is going to be part of that as well. The one kinda negative part of this program is, is a pilot program. So it's only available in Michigan for 10 counties. And so if you're not in one of the 10 counties shown here on the screen, it's not a program that's open to you. I notice a severe lack of programs or excuse me, of counties in the southwest area that definitely would benefit from this program. So my hope is that they enact this program into 2023 and open it up to the rest of the state. Especially of the uncertainty of fertilizer prices may continue into that next year with the investment that we've got out there. The last thing I want to highlight for everybody is that if you're looking for more information about crop insurance, we do have a bulletin that's actually through beginning farmer program, the demand series that we actually put out publications to try to help people kind of new entrance into farming, think about some of the business and financial strategies. And so bulletin E-3415 introduction to crop insurance for field crops is available. Doesn't really have any information on the two programs I just talked about in terms of the pace program or the cover crop program, those were new after the publication, but this has plenty of information on revenue and yield protection. With that, I will go ahead and open up to any questions that are there. I see a question Meryl asked, does USDA for the program use the beginning farmer definition words within the first 10 years of farming that they have experience. And yes, they use that exact same definition. So if you're somebody that has less than 10 years of management experience, they're going to consider you a beginning farmer. And so that's a really important thing is that they'll, they'll go through some criteria with you to try to capture that, but they are looking at that same ten-year mark that you see in other areas of USDA, they're very consistent on that for the most part, between, between programs. Another question that I see in the chat is criteria, criteria for interesting cover crop pre-harvest or growing crop. I think that might be related to the new cover crop program. The, they've got a long list of the different types of cover crops that can be used in terms of trying to get the coverage in that premium support. I recommend talking to an insurance agent specifically about that criteria because there's a lot of information. There's a long list they've got doesn't look like they're excluding much. So which is nice because it's a wide list. So there's a lot of opportunity to try to capture that premium support, but I think you do have to talk to them before the March 15th deadline. So it's definitely something you want to ask that agent sooner rather than later.