Ryan Benes

Ryan Benes of Farmers Mutual Hail discusses derecho-related losses, precision crop insurance and more during a presentation to ISA's board of directors recently. (Photo: Joclyn Bushman/Iowa Soybean Association)

Farmers Mutual Hail provides insight on crop insurance

July 8, 2021 | Bethany Baratta

Derecho-related losses, precision crop insurance and a 2022 insurance premium forecast topped the list of questions for Farmers Mutual Hail Strategic Account Manager Ryan Benes during ISA’s board meeting last week.

Since 1893, Iowa-based Farmers Mutual Hail (FMH) has provided crop, hail, and wind insurance. The company got its start much like the Iowa Soybean Association: farmers saw a need to help their fellow farmers.

FMH has been led by the Rutledge family for more than 125 years.

Derecho losses

The Aug. 10, 2020, derecho caused significant damage to Iowa’s crops. The USDA Risk Management Agency (RMA) reports 57 counties in Iowa were in the path of the storm. Within those 57 counties, there are approximately 14 million acres of insured crops. This includes 8.2 million acres of corn and 5.6 million acres of soybeans that may have been impacted by the storm.

Based on MODIS satellite imagery and Storm Prediction Center preliminary storm reports, the Iowa Department of Agriculture and Land Stewardship believes 36 counties in Iowa were hardest hit by the derecho. Within those 36 counties, the storm likely had the greatest impact on 3.57 million acres of corn and 2.5 million acres of soybeans.

In the United States, 4.1% of all crop losses paid in 2020 were due to the derecho, Benes said. But damage in Iowa was greater, he said.

“Over half of the total crop losses in the state of Iowa came from 4 hours on a Monday morning,” Benes said, referring to the derecho destruction.

This storm spurred claims for all three areas of FMH business including its Crop, Property & Casualty (P&C), and Reinsurance Divisions.

Insurance decisions

There are a lot of choices when it comes to crop insurance. So, what are Iowa farmers choosing?

“You’re all doing about the same thing,” Benes said. “It’s revenue protection.”

About 96% of soybean and corn acres in the state are under Revenue Protection, and about 75% of those take 80% to 85% level coverage.

About 60% of FMH customers take supplemental hail and/or wind coverage. About 5% of soybean growers and 6.3% of corn farmers take supplemental multi-peril coverage (Supplemental Coverage Option or Enhanced Coverage Option).

Farmers’ interest in FMH’s Precision Crop insurance Solutions is growing, says Dawn Stoppelmoor, FMH business development manager. FMH has offered precision crop insurance since 2011.

Farmers can use the data already being collected for required crop insurance reporting after planting and harvest. This program allows farmers to send their precision data to their agent directly.

“I like it because my records are kept in the system,” says ISA District 6 Director Robb Ewoldt near Davenport, who is an FMH customer.

Stoppelmoor says the company sees a 20% to 25% growth in precision crop insurance customers each year.

“There are a lot more people using precision (ag software) than who use it for precision crop insurance right now,” Stoppelmoor says. “We do see the accuracy in the program; we see time savings for farmers, the agents and the company as well as quicker access to getting claims turned around when we use precision data for their crop insurance.”

2022 insurance premium forecast

Benes expects wind coverage rates to increase in 2022 because of the history of losses and the increase in rates based on the National Crop Insurance Services standard rate increase.

He expects to see more farmers to elect the Enhanced Coverage Option and Supplemental Coverage Option. He noted that farmers who elect ARC-County at the FSA office are not eligible to purchase the SCO pan. He expects that the Enhanced Coverage Option will become more popular because it is subsidized 95% coverage which is disconnected from the FSA ARC and PLC programs.

Those who buy hail coverage could see higher prices, reflective of higher commodity prices, Benes says.

He looks for crop insurance to maintain its connection to conservation. He noted the Pandemic Cover Crop Program, which provided a $5 per acre benefit to cover crop growers on their crop insurance premiums. Iowa has an additional program for farmers who plant cover crops.  Those benefits stack, providing a $10-per-ace credit on Iowa farmers’ crop insurance premiums.

Farmers Mutual Hail sponsored the ISA board luncheon and supports the work of the Iowa Soybean Association’s State of Soy.

For more information on FMH, visit its website.