Crop Insurance Alternatives for Hay Crop Insurance Conference Fargo, North Dakota January 20, 2003 M - PowerPoint PPT Presentation

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Crop Insurance Alternatives for Hay Crop Insurance Conference Fargo, North Dakota January 20, 2003 M

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South Dakota State University. Outline. Why look at hay insurance? ... 'Crop Insurance Alternatives for Hay in South Dakota' - Diersen, SDSU ExEx 5044 (2002) ... – PowerPoint PPT presentation

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Title: Crop Insurance Alternatives for Hay Crop Insurance Conference Fargo, North Dakota January 20, 2003 M


1
Crop Insurance Alternatives for HayCrop
Insurance ConferenceFargo, North DakotaJanuary
20, 2003Matthew A. Diersen, Ph.D.Economics
DepartmentSouth Dakota State University
2
Outline
  • Why look at hay insurance?
  • National perspective
  • Tri-state perspective
  • Why isnt it working?
  • Looking ahead

3
Motivation
  • Structural changes
  • Drought bringing awareness
  • Historic disaster aid ties
  • Refinements in product(s)

4
Literature
  • The U.S. Hay Market Higher Prices in 1996/97
  • - Shields and Baker, Agricultural Outlook (1996)
  • U.S. Hay Production
  • - Dismukes and Zepp, Economic Research Service
    Staff Paper No. 9607 (1996)
  • Should This Crop Be Insured?
  • - Harvey, Hay Forage Grower (1998)

5
Literature (cont.)
  • Crop Insurance for Hay and Forage
  • - Dismukes, Zepp and Smith, ERS report on the RMA
    website (1996)
  • Crop Insurance Alternatives for Hay in South
    Dakota
  • - Diersen, SDSU ExEx 5044 (2002)
  • Noninsured Crop Disaster Assistance Program
  • - Johnson, AMPC Briefing No. 14 (2002)

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10
Potential Demand Factors
  • Yield variability
  • Presence of subsidy
  • Hay is valued input
  • Some revenue dependence

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14
NAP Coverage
  • Noninsured Crop Disaster Assistance Program
  • Administered by Farm Service Agency
  • Similar to CAT coverage
  • Deadline is December 1
  • Coverage for pasture and grass hay

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Common Tendencies in 2002
  • ¼ S.D. acres under CAT
  • ½ S. D. acres at 50 level
  • ¾ N.D. acres under CAT
  • ¼ M.N. acres under CAT
  • ¼ M.N. acres under GRP

17
Shortcomings
  • Ignorance about availability
  • Record-keeping demands
  • Lack of quality provisions
  • Only yield products offered

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19
Product Refinements
  • Can the DOT weigh bales?
  • Is there a place for GRP?
  • Is a revenue product feasible?
  • Quality seems distributed like wheats
  • Current yield and price are correlated
  • Do WE just need to get the word out?

20
Summary
  • Customer base is slowly changing
  • Current products may not match needs
  • NAP may be viable alternative
  • YOUR input will likely bring change

21
For More Information
  • diersen.matthew_at_ces.sdstate.edu
  • Phone (605) 688-4864
  • http//sdces.sdstate.edu/
  • Click on the Markets tab
  • Scroll to ExEx 5044
  • AMPC website
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