8 reasons to use precision data for crop insurance
Updated: Feb 24, 2020
The precision data in your monitor could be providing you with more benefits than you realize.
In 2012, the USDA Risk Management Agency (RMA) that oversees federal crop insurance started accepting precision farming data in order to measure losses, facilitate audits and complete three-year reviews. To utilize your data, the RMA requires you to ensure your yield monitor is calibrated to less than 3% error.
Here are eight ways you can benefit from utilizing precision farming data on your crop insurance:
Today when most farmers go to report their acres, they go to the Farm Service Agency (FSA) office manually create the 578 report and then to their crop insurance agent, where they will use the 578 to create the crop insurance report. Some might print off the data from their monitors.
“You can actually use the data straight from your monitor, whether it’s from planting or harvesting,” said Rob Schmidt, COO, TruAcre Technology in Muscatine, Iowa. “The agent in some cases can pull the data straight from the cloud and create the required crop insurance reports. The farmer just comes in and meets with the agent, double checks it’s accurate and signs it.”
Pulling data from the cloud is much more efficient than having to go in, work with the agent to sort through the data and wait for them to create the reports. Essentially, the report is automated for the agent and the farmer, saving time for both parties.
Improve Accuracy of Information
FSA maps were originally created via aerial images in the ‘70s or ‘80s, utilizing technology in which people determined the outline of the field by hand. If they were even slightly incorrect, the CLU (common land unit) acres would be off. They also didn’t account for waterways.
“We’ve found that a lot of times, when farmers use their actual precision data, they are farming less than what the CLU says,” said Schmidt.
“For example, maybe it's an 80 acre field, but you’re only farming 78 because there's a fencerow and there's a strip of a little grass in between the fence and the field, because you can't farm right up to the fence. Or maybe there is a waterway or two in the field that you're not actually farming. But, FSA hasn't taken them out of the CLU acres. When your acres are more precise, you'll pay less on your premium.”
Schmidt has seen the opposite issue as well; some farmers are finding that they are actually farming more acres than what the FSA office records show for the CLU.
“The CLU says it's 80 acres, but they're actually farming 82. This could be from the CLU being mapped inside of those lines or because there was once a fence with grass. Now, the fence and grass are both gone. If that’s the case, they're now actually farming more acres.”
“This affects their premium in a different way; it means it's affecting them at claim time, along with affecting their APH (actual production history) the wrong way,” Schmidt said.
As your APH data gets more accurate, so do your claims. “On average, we’re hearing farmers are saving 4% on their crop insurance premiums by using their precision ag data.”
“If you’re farming fewer acres, that adjusted APH could help you at claim time, especially if it's only a partial claim on a field versus the whole field,” said Schmidt.
Currently, an adjuster has to go out to the farm to measure the bins or get all the scale tickets from the farmer. Or if the farmer is feeding the grain, they have to provide all the feeding records to the adjuster.
“Instead, you can provide the data directly from the combine or planter. The crop insurance adjuster can adjust the claim that way and never has to come to your farm,” Schmidt said.
The improved speed with which the adjuster can process your claim in returns means getting paid faster.
Better Management of Multiple Entities
It’s not uncommon for farms to have multiple entities such as a father and son, two brothers or a group of people together in a partnership or LLC. When the grain is stored, it has to be separated or it will be considered commingling and isn’t recommended for crop insurance.
“For example, we had a father-son operation that had not been reporting their crop insurance using precision data even though they had all the technology on their farm. The son in the operation was pulled for a random crop insurance audit and the auditors discovered that the pair had commingled grain. Because of this, the dad was going to have to pay back a $10,000 claim. By using the precision data, they were able to provide and prove their data resulting in not being reprimanded,” Schmidt said.
Eliminate Need for Paper Records
The monitor report can now be your hard record - there’s no longer a need to keep all those paper files.
“This can really make things more efficient for most farm operations in the long run,” Schmidt said. “Once you’ve been properly utilizing your precision data, at audit time, you no longer have to keep three years’ worth of scale tickets or feeding records,” Schmidt said.
All that paperwork, which once took a week for the farmer to collect and another week for the auditor to analyze, can essentially be eliminated by using data directly from a monitor.
For operations feeding grain, current stipulations require detailed records at audit times.
“If you provide the data from the monitor, it doesn’t matter where the grain went - whether you fed it or sold it, you don't have to worry about tracking all that anymore. You also don't need to worry about having old grain in the bin because you’ve been feeding it. The adjuster doesn’t have to come out and measure the old grain before you start putting new grain in,” Schmidt said.
Separate Irrigated/ Non-Irrigated Acres
Utilizing your monitor data will allow a grower to insure their irrigated and non-irrigated ground differently by separating out your dry land. In order to do this, the grower will need to provide production for those acres separately.
“Most people do not farm the corners of their irrigated fields differently, even though those sections are not irrigated they may be insured differently. When they combine, they go straight down the row and don’t separate the irrigated crop from the non-irrigated. Now we can use the data to separate those dry land acres and separate that production easily,” Schmidt said.
If you are looking to utilize your precision data for crop insurance, make sure both your agent and carrier can handle your data. “In some cases the carrier can handle it, but depending on the crop insurance carrier it requires the agent to be trained and have special software,” Schmidt said.
Rob Schmidt, COO, TruAcre Technology, Muscatine, Iowa
Rob Schmidt has been a leader for TruAcre Technology since its inception in 2014 and has helped establish a reputation for providing colorblind ag tech advice, based on in-field trials and product test plot analysis. Along with the support of an administrative team, he oversees day-to-day operations of five full-time precision staff who increased annual revenue to $3 million in 2019 and developed a unique sales process which includes a detailed interview with customers to evaluate needs vs. wants.