The New Farm Bill Offers Many Options Requiring Careful Decisions

Adams points out that the transition payment is paid on 2013 base and is subject to a limit of $40,000 per legal entity. This payment is separate from the $125,000 limit for other programs impacting other crops, and eligibility is not affected by other program choices or planting decisions made this year.

In 2015, STAX will offer cotton growers several options for coverage. It can be purchased as the only insurance policy covering an acre, or it can be purchased in addition to existing insurance policies. It will be based on actual county income relative to an expected income and is designed to cover a range from 90 percent down to 70 percent of expected county income.

“Indemnities under STAX are triggered by the revenue experience at the county level or a combination of counties, if needed, to get an actuarially-sound product,” explained Adams. “It is not based on individual experience. It is the collection of individuals in a county and that revenue experience.

“There’s a 10 percent deductible if you purchase STAX at its maximum,” he continued. “If the county actual income comes in above 90 percent, there’s no STAX indemnity. If it comes in anywhere between 90 and 70 percent, an indemnity is triggered. And if county income falls below 70 percent, then the STAX indemnity is at its maximum level.”

STAX will carry a premium subsidy of 80 percent, with producers paying the remaining 20 percent. However, the lower band of STAX coverage cannot overlap the coverage level of an underlying insurance policy on that same acre, so growers will need to make decisions about balancing their insurance coverages.

“STAX will be offered for irrigated and non-irrigated acres to the greatest extent possible,” added Adams. “And there will be some new features and options that we’ll learn about as we go further into the year that will allow producers to scale their indemnity up or down depending on how much of the protection factor they purchase.”

Also coming in 2015 is the Supplemental Coverage Option (SCO), which will be available for Upland cotton and other commodities such as corn, wheat, soybeans, and rice. SCO requires underlying insurance coverage and helps provides coverage for a portion of that policy. However, it cannot be purchased on acres covered by STAX or for commodities covered under ARC.

While STAX coverage is based on revenue experience, SCO indemnities can be triggered by either county yield or revenue experience. “There are some similarities in the concepts,” said Adams. “There are some differences, though, in the details.”

 

Visit the Cotton Grower Guide to the 2014 Farm Bill webinar for more information from Dr. Joe Outlaw and Dr. Gary Adams.

 

Keep In Mind

With all of the new insurance products and programs coming for all crops, both Outlaw and Adams remind growers to keep a couple of things in mind as they begin sifting and sorting through all of the options.

First, the new Farm Bill now requires growers to have a conservation compliance program in place in order to be eligible for any insurance premium subsidy.

And second, don’t be shy about asking for help. Education for this Farm Bill is going to be a continuing process, since final rules and provisions are still being determined.

Investigate online decision tools like the one being developed by Texas A&M, AFPC and the University of Missouri. Seek out your FSA officials for answers as soon as they have the information in hand. And ask your insurance agent about all of the options and the right type of coverage for your operation.

Topics: ,

Leave a Reply

News Stories
News

Proposed Mergers Could Increase Cotton Seed Prices

September 23, 2016

According to a Texas A&M study, proposed mergers by leading biotechnology firms would result in steep price increases for cotton seed and smaller increases for other grain crops.

News

Sale of Nation’s First Cotton Bale Helps Fund Scholarships

September 27, 2016

The sale of the nation’s first cotton bale for 2016 provided $16,500 in scholarship funds for agriculture students in the Harlingen, TX area.

Product News

Cotton Board Releases 2015 Annual Report

September 27, 2016

The Cotton Board’s 2015 Annual Report is now available online.

News

NCC Urges Broad Look at Global Fiber Markets

September 14, 2016

The National Cotton Council is seeking greater transparency of fiber production policies in other countries – including synthetic fibers – to help determine how they impact the global cotton market.

Product News

How Fiber Quality Became So Valuable

September 14, 2016

Textile expert Dean Etheridge explains the meteoric rise of fiber quality on the global market.

News

Cotton Highlights from September WASDE Report

September 12, 2016

Production and ending stocks are up slightly in USDA’s September World Agricultural Supply and Demand Estimates, while export and consumption numbers remain steady.

News

Wet Conditions Causing Problems for Texas Cotton

September 9, 2016

Extended untimely rains have producers in Texas’ Upper Gulf Coast and Blacklands worried about yields and lint and seed quality.

Around The Gin
Product News

Cotton Board Releases 2015 Annual Report

September 27, 2016

The Cotton Board’s 2015 Annual Report is now available online.

Product News

It’s a Deal: Bayer to Acquire Monsanto

September 14, 2016

Bayer and Monsanto have announced an agreement under which Bayer will acquire Monsanto for approximately $66 billion in an all-cash transaction.

Product News

How Fiber Quality Became So Valuable

September 14, 2016

Textile expert Dean Etheridge explains the meteoric rise of fiber quality on the global market.

Product News

Cotton Cultivated Website Adds Custom Weather Feature

September 1, 2016

Cotton Cultivated – Cotton Incorporated's producer information website – now features a new weather tool tailored for cotton growers.

Product News

ChemChina/Syngenta Deal Gets U.S. Foreign Investment Approval

August 22, 2016

ChemChina and Syngenta have received a key clearance for the proposed consolidation of the companies.

Product News

Enlist Cotton Trait Earns Full Export Approval

August 10, 2016

Cotton varieties containing Dow AgroSciences’ Enlist trait now have full export approval in key countries.

Product News

Spray Equipment Offer Helps Maximize On-Target Applications

August 3, 2016

A new spray technology equipment offer can help growers participating in Roundup Ready PLUS Crop Management Solutions upgrade their sprayers to maximize on-target applications.

Product News

EPA Allows Sale and Use of Existing Belt Inventory

August 2, 2016

The U.S. EPA’s Environmental Appeals Board has upheld an earlier decision to cancel registration for Bayer's insecticide Belt, but is allowing sales of existing stocks to growers for use.

Latest News
News

Sale of Nation’s First Cotton Bale Helps Fund Scholarships

September 27, 2016

The sale of the nation’s first cotton bale for 2016 provided $16,500 in scholarship funds for agriculture students in the Harlingen, TX area.

News

Proposed Mergers Could Increase Cotton Seed Prices

September 23, 2016

According to a Texas A&M study, proposed mergers by leading biotechnology firms would result in steep price increases for cotton seed and smaller increases for other grain crops.

News

Ag Companies Defend Merger Deals on Capitol Hill

September 21, 2016

Officials for Monsanto, Bayer and other ag companies defended their proposed merger plans before the Senate Judiciary Committee, insisting that the deals would mean greater investments in technology to help American farmers.

News

NCC Urges Broad Look at Global Fiber Markets

September 14, 2016

The National Cotton Council is seeking greater transparency of fiber production policies in other countries – including synthetic fibers – to help determine how they impact the global cotton market.

News

Cotton Highlights from September WASDE Report

September 12, 2016

Production and ending stocks are up slightly in USDA’s September World Agricultural Supply and Demand Estimates, while export and consumption numbers remain steady.

News

Wet Conditions Causing Problems for Texas Cotton

September 9, 2016

Extended untimely rains have producers in Texas’ Upper Gulf Coast and Blacklands worried about yields and lint and seed quality.

News

Boosting the Value of Cottonseed

August 30, 2016

As cottonseed supply and value grows, the cotton industry continues to fight for the oilseed designation or other legislative options.

News

New Webcast Focuses on Importance of Cotton Physiology

August 26, 2016

A new webcast focusing on the importance of plant properties in cotton research and management has been added to the Focus on Cotton online series from the Plant Management Network and Cotton Incorporated.

News

New Webinar Explains Soil Fertility and Nutrient Management

August 23, 2016

A new webcast on cotton fertility management has been added to the Focus on Cotton online series from the Plant Management Network and Cotton Incorporated.

News

Cotton Research and Promotion Hall of Fame Adds Four

August 22, 2016

Four honorees make up the 2016 class of Cotton Incorporated’s Cotton Research and Promotion Hall of Fame.

News

New Webcast Focuses on Auxin Herbicide Drift on Non-Tolerant Cotton

August 19, 2016

A new webcast explaining the potential impact of 2,4-D on non-tolerant cotton varieties has been added to the Focus on Cotton online series from the Plant Management Network and Cotton Incorporated.

News

Cotton Highlights from August WASDE Report

August 12, 2016

More positive news for cotton in USDA’s August World Agricultural Supply and Demand Estimates, including increases in U.S. production and market prices, plus more reductions in global stocks and world production.

News

$1 Billion in Dividend Payouts for FCC

August 9, 2016

With its 2016 dividend payout, Farmers Cooperative Compress of Lubbock will reach the unprecedented milestone of having distributed $1 billion to its producer-owners.

News

Final P.I.E. Tour Brings Western Growers to Texas

August 8, 2016

Eight Western cotton producers will visit cotton and other ag operations in Texas as part of the National Cotton Council’s 2016 Producer Information Exchange Program.

News

Texas A&M Research Provides Science Behind New Cotton Technology

August 2, 2016

The science behind a new commercially-available seed treatment from Indigo Ag stems directly from research started by Dr. Greg Sword, a Texas A&M entomologist.