MANKATO, Minn. – Crop insurance companies are taking advantage of precision farming data. As more producers use precision technology to track their planting, fertilizing and combining, insurance companies can use that information to track crop production and losses.
“Back in 2010 is when the RMA (Risk Management Agency) first made the changes to the rules for loss assessment regarding precision data,” said Ken Ripley with Farmers Mutual Hail Insurance of Iowa, during a presentation at the 2019 Minnesota Ag Expo. “It’s been around for several years, but there is a lot more opportunity to use it than what we are seeing in the marketplace today.”
The RMA considers combine records or records from a Bluetooth enabled grain cart as hard data. This means, as long as a producer follows the guidelines set by the RMA, that data can be used to measure losses, perform audits and complete three-year reviews.
The major requirement by the RMA is a producer must prove the combine yield monitor has been calibrated.
“The requirement is that it is calibrated within 3 percent, so we are not asking you to be down to the tenth of a bushel, we are asking you to be within 3 percent,” said Ripley.
The reason for 3 percent is to have the combine record slightly more accurate than a bin measurement. A bin measurement is believed to be accurate within 5 percent.
“We are finding that the errors (with combine calibration) are generally within 1 percent or less, because the growers are wanting to have the most accurate data for reporting,” he said.
Using precision data for crop insurance actually starts with the planting data.
“We use your actual planted acres and we remove any overlap that your monitor may have,” He said. “So, you are only paying for the acres that you physically plant versus what FSA has for their acres.”
The FSA uses Common Land Units, or CLUs to determine planted acres. These CLUs have a confidence of 90 percent, according to the USDA FSA website and a tolerance of approximately 10 feet. This information is then used in an FSA-578 or crop report.
“They have always said in the crop insurance industry, we have to get your 578s to insure your acres,” he said. “Right now, if you use this data, we don’t even use 578s at all when it comes to acre reporting or a claim.”
The precision planting map is an exact representation of what was planted on your farm, where it was planted and how much was planted. Instead of filing the crop report, the planting map can be sent directly to a crop insurance agent and used as a starting point to establish an insurance program.
“You will see a reduction in your premium because you are only paying for the acres you plant,” he said. “I cover part of South Dakota and I have seen growers have as many as 60 acres that they are paying insurance on that they physically do not plant.”
Growers can also expect to see their APH (actual production history) become more accurate. Instead of associating the yield to an approximation of planted acres, an exact yield is associated with the exact planted acres.
On the claim side, the benefit is speed.
“We do not measure bins or ask you for assembly sheets, if you have a precision claim,” said Ripley. “We strictly go off combine records, the adjusters look at the wet weight and the moisture that’s on that combat record, they plug it into their processing system and that is how the claim is determined.”
At the end of the season, growers can simply send their combine data off to their insurance agent. This can be done online, or the grower can upload everything to a USB drive and take that to the agent.
This results in quicker payments.
“We have had claims where they have been on the farm and they are literally sending the data to the office to be paid, the farmer got the check in two days from the date the adjuster showed up to the farm,” he said. “It can make your life a lot easier and then, last but not least, quicker audits because we don’t have to have you give us assembly sheets from your end users.”