Farmers turn to crop insurance for help

Grain trucks and a tractor sit idled by a downpour Saturday on the edge of a grain field that’s only partially harvested south of Idaho Falls. Such rainfall has been an unusual but dominant feature of the weather this month, ruining much of eastern Idaho’s wheat and barley crops.

Idaho’s farmers are looking for relief from federally subsidized crop insurance policies after a relentless series of August rainstorms severely damaged the state’s barley and wheat crops.

“It’s a disaster. I don’t know any other way to put it,” said Dwight Little, 61, who farms malt barley and hard red spring wheat near Teton. “This is an event I’ve never seen in my life.”

The timing was painful: Just as crops such as barley were becoming mature, the rain began. It has scarcely let up, dumping more than six times the average precipitation on Idaho Falls this month.

Excessive moisture caused grain heads to sprout or mold. Some Idaho crops may be OK to sell for discounted prices, or as livestock feed, experts say. But much will be discarded. About 60 percent of the state’s barley crop is being rejected for malting and an untold amount of wheat is being turned away.

Farmers are looking for ways to unload their sometimes near-worthless crops — and calling their crop insurance agents.

Widespread effects

“Phones are ringing off the wall,” said Steve VanOrden, an eastern Idaho crop insurance agent with HUB International.

He said multiple claims are being filed under farmers’ so-called “multi-peril” crop insurance policies, which are federally subsidized plans. Insurance adjusters likely will have long lists of Idaho fields to travel to and inspect damage.

“A widespread weather event like this can affect everything you’re growing,” said Cathy Wilson, director of research collaboration at the Idaho Wheat Commission in Boise.

A wheat or barley farmer might also grow beans, alfalfa, potatoes or any number of other crops on the side. In the case of disease, “you’re only talking about one of your crops,” Wilson said. But the recent monsoonal moisture has affected most every crop grown in Idaho, while pouring down on large swaths of the state.

Little said he can recall isolated eastern Idaho events, such as hail, frost or bugs, that tore through crops over the years. But even then it usually was a localized problem, confined to one geographic area.

Idaho’s deserts have garnered a nationwide reputation as a consistent place to grow grain, he said. There is less risk than the Midwest, where unpredictable weather wreaks havoc more frequently. But that reputation was turned on its head this month.

“I’ve never had a rejected load of malt barley,” Little said. “And that’s probably going to change this year.”

Types of coverage

There are two primary types of insurance farmers turn to for weather-related events, said Laurie Langstraat, a spokeswoman for National Crop Insurance Services.

• Crop-hail insurance: This policy is for hail storms that occur frequently in certain places of the country, but usually don’t cause widespread damage. They might destroy part of one field, and leave another unscathed. Crop-hail policies are covered by private insurers because losses usually are limited and would not overwhelm a private company’s capital reserves.

• Multi-peril crop insurance: This federally backed policy covers a wide range of losses due to natural causes or disasters, from drought to excessive moisture to cold weather and disease. Private insurance companies write the policies and process claims. But the U.S. Department of Agriculture sets rates, determines which crops are covered, subsidizes farmer premiums and reimburses the private insurance companies who administer the plans.

But there are more wrinkles that may be part of a farmer’s insurance plan. Some have purchased a special “endorsement” policy for one crop in particular, such as barley. Farmers under contract to sell a certain amount of barley to Coors or Anheuser-Busch each year likely have such policies, Langstraat said.

“You either provide (buyers) with the grain or you go and buy the grain yourself to fulfill the contract,” she said.

An endorsement policy would help protect against such a loss.

In addition to policy add-ons, there are different levels of coverage for a farmer to select. Some might choose as low as 50 percent coverage, in which the farmer is willing to lose 50 percent of the crop before receiving an indemnity payment, Langstraat said. Up to 85 percent coverage may be purchased.

Little said most farmers he knows have around 75 to 80 percent of their crop covered.

No insurance

Some farmers choose to risk going without any insurance, Langstraat said. That can make a freak rain event or other storm all the more devastating.

Clark Hamilton, who farms 5,000 acres of malting barley in Ririe, said he’s not a “crop insurance guy.” But following the recent storms, which resulted in the biggest loss Hamilton’s experienced in 15 years of farming, he’s considering buying coverage for a few of his fields.

“We all have to look at our own situation,” Little said.

How much covered?

Nationwide, about 90 percent of acres eligible for crop insurance are covered, Langstraat said. But there are indicators that fewer Idaho farmers hold crop insurance than average.

For example, out of $124 billion in crop insurance liability held nationwide in 2013, only $1.1 billion was held in Idaho.

Part of the reason for less crop insurance in the state may be due to consistent, less-risky weather patterns, Langstraat said. Another factor could be guaranteed markets for crops such as wheat and barley, which means less fluctuation in prices and fewer losses.

While $116 million in barley insurance liability was held by Idaho farmers in 2013, only $5 million was paid out. Out of $427 million in wheat liability in the state, $22 million was paid out.

Extent of damage still unknown

The Idaho Barley Commission said it was looking to help farmers with insurance solutions to their losses.

The extent of damage to the wheat crop isn’t known yet, said Wilson of the Idaho Wheat Commission.

But there have been reports trickling in from around the state of sprouting and mold, she said. Results from “Falling Number” tests, taken at grain elevators to measure the amount of sprout damage in a farmer’s wheat sample, have been lower than usual, Wilson said. That means farmers are faced with steep discounts, assuming their wheat isn’t rejected altogether.

Even in Idaho’s traditionally predictable climate, Little said, “eventually everybody’s luck changes.”

Luke Ramseth can be reached at 542-6763.