As the 2012 crop year swiftly approaches, so does the time for scheduling visits with insurance agents and farm service agency offices.
Crop insurance played a major role for producers in 2011 and one of the ways cotton producers can augment their 2011 insurance protection was through the addition of the cottonseed pilot endorsement, which was available to cotton producers nationwide last year and allowed cottonseed to be insured for the first time.
Shawn Wade, director of policy analysis and research at Plains Cotton Growers Inc. said this program is easy to access, very popular and back again this year.
"The policy is set up so that no additional records have to be provided," Wade said. "The ability to add that extra amount of insurance turned out to be a very beneficial thing for many growers. Our first year numbers within Texas had about 54 percent insured under this policy and nationally 38 percent, so that is a very good first year. We anticipate as we go into 2012 that we will see some additional people pick up the cottonseed endorsement and that 54 percent may rise."
Looking to the 2012 year, cottonseed prices are up.
"Looking at the insurance value that the cottonseed would be valued at in 2012, we see that it will be around 11 cents per pound which is about $220 per ton of cottonseed," Wade said. "That is based on projections by USDA and they approved that final price insurance offer."
Texas definitely was a state benefiting from this new endorsement.
"Of about 19,000 endorsements provided, about $275 million worth of coverage throughout the United States was provided," Wade said. "Because of the year that we had and the losses that were paid out, producers received about $117 million of cottonseed insurance, and about $112 million of that was paid out in the state of Texas."
On the Texas High Plains, March 15 is the federal crop insurance sales closing date for initiation or canceling insurance coverage.
