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Unyeilding: Insurance saves some farmers' year

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This year’s drought has depressed corn yields to about 35 percent below average in Bartholomew County, while late-summer rains boosted soybean yields to just below average.

Mike Ferree, Bartholomew County’s Purdue Extension educator, said local corn fields produced an average of about 80 bushels per acre, while soybean fields netted farmers about 35 bushels per acre.

East of Columbus, Trevor Glick’s corn — planted in clay soil on the family farm — yielded a range of 30 to 120 bushels per acre.

“Our crop yields were the worst we’ve ever had,” Glick said.

He said between crop insurance and the current higher grain prices, the family won’t lose too much — except the opportunity to capitalize on really good prices.

Jay Hatton, who farms with his wife, Teresa Corya Hatton, in Decatur County, about six miles east of the Bartholomew County border, said despite insurance, his farm’s income would decline about 25 percent from the past few years.

Hatton said Decatur County is seeing corn yields of about 50 to 80 bushels per acre, with occasional spots above 100 bushels. Soybeans that were planted early were “really poor,” Hatton said, around 20 bushels per acre. But soybean fields that were planted late generated about average yields thanks to late-season rains.

Hatton, who has farmed for more than 35 years, said that even with insurance and higher prices, income from this year’s crop will fall below average.

However, Bartholomew County farmer Keith Arnholt said that with crop insurance payments and some decent yields from irrigated fields, his family looks to benefit from a slightly above-average year.

Arnholt, who has farmed for more than 40 years, has fields west, north and south of town, and said farms in the south fared better than in the north.

His corn fields generated an average yield of about 75 bushels per acre, while soybean fields produced about 28 bushels. Some irrigated fields generated significantly more, he said.

“We should have a fairly decent year,” Arnholt said.

Statewide, high grain prices and crop insurance will allow some Hoosier farmers to generate record revenues this year — but low yields also will push a few near bankruptcy, said Chris Hurt, agricultural economist with Purdue University.

Corn yields statewide are expected to average about 100 bushels per acre this year, about 40 percent below average. Soybean fields, thanks to rain in August and September, have generated yields of about 44 bushels, about 8 percent below average.

Hurt said that farmers statewide with decent yields and crop insurance will be able to generate healthy revenues. At least 10 percent will have record years, he said.

Corn prices, for example, stand at $7.50 per bushel for December delivery, up 50 percent from earlier in the year, Hurt said.

Farmers will “have less to sell — but prices are higher,” Hurt said.

With 40 percent less production, but 50 percent higher prices, many farm families should be in good shape, Hurt said.

But yields will differ materially from one field to the next, he said. And 30 percent of corn and soybean acreage is not protected by insurance.

Further, Hurt said, some farmers locked in prices in spring, when corn sold for about $5 per bushel, which means they will miss out on the opportunity to sell at today’s higher prices.

About 4 percent of Hoosier farmers will struggle financially this year and will need several good years to recover, Hurt said.

On the flip side, Hurt said he suspects that farmers who have crop insurance and can sell their crops at current prices might generate greater revenues than they expected.

The most common form of crop insurance, revenue protection, allows farmers to insure a certain percentage of their yield. If they expected a yield of 160 bushels per acre, they can elect insurance to protect 75 percent of that, or 120 bushels. If their actual yield is 80 bushels, insurance will pay them the value of 40 bushels (120 minus 80) at current prices. That means that despite actual low yields, farmers could have a financially good year.

Indiana’s agricultural sector overall should be doing well from this year’s crop, Hurt said, but depending on their level of insurance and whether they can sell the product at today’s higher prices, individual families could still be hurting.

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