November 27, 2022

New USDA insurance option for ‘split-apply’

WASHINGTON — Corn farmers who “split-apply” nitrogen now have another option for insurance coverage under a program developed in part by corn growers from Illinois and across the nation.

The U.S. Department of Agriculture’s Risk Management Agency has announced the details of its Post Application Coverage Endorsement in certain states for non-irrigated corn, providing coverage for producers who use this practice that saves producers money and is considered better for natural resources.

PACE was developed by the Illinois Corn Growers Association, National Corn Growers Association, Ag-Analytics Technology, Meridian Institute and others and submitted to the Federal Crop Insurance Corporation under provisions in the law allowing for private development of new crop insurance products.

“Meeting the goals of the Illinois Nutrient Loss Reduction Strategy are a top priority for Illinois Corn. Giving farmers a tool to allow them to confidently apply nitrogen in-season when the crop needs it, not only makes good economic sense for the farmer, but good environmental sense, too,” said Megan Dwyer, Illinois Corn’s nutrient loss reduction manager.

ICGA’s internal data indicates the No. 1 reason farmers are hesitant about applying a higher percentage of nitrogen on in-season is fear of not getting it applied. In addition, the concern of not getting nitrogen on in-season also leads to over application and more nitrogen being susceptible to loss.

“PACE will allow farmers to trust the science for their application timing and have peace of mind that if Mother Nature throws a curveball, they’ll be covered,” Dwyer said.

PACE provides payments for the projected yield lost when producers are unable to apply the post nitrogen application during the V3 to V10 corn growth stages due to field conditions created by weather. Farmers must apply a minimum of 20%, but less than 75% of their total nitrogen pre-plant.

Indemnities are paid based on a calculation and depending on the percentage level of nitrogen application that was unable to be applied.

PACE is offered in select counties in 11 states, including Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin.

It is available as supplemental coverage for Yield Protection, Revenue Protection and Revenue Protection with Harvest Price Exclusion policies only. Area Revenue Protection Insurance does not qualify.

Important Dates

The first sales closing date to purchase insurance is March 15. The acreage reporting date is July 15; premium billing date, Aug. 15; and contract change date, Nov. 30.

To “split-apply” nitrogen, growers make multiple fertilizer applications during the growing season rather than providing all the crop’s nitrogen requirements with a single treatment before or during planting. This practice can lead to lower input costs and helps prevent runoff and leaching of nutrients into waterways and groundwater.

This new crop insurance option builds upon the Risk Management Agency’s efforts to encourage use of conservation practices, including cover crops.

For example, RMA recently provided $59.5 million in premium support for producers who planted cover crops on 12.2 million acres through the new Pandemic Cover Crop Program.

Additionally, RMA recently updated policy to allow producers with crop insurance to hay, graze or chop cover crops at any time and still receive 100% of the prevented planting payment. This policy change supports use of cover crops, which can help producers build resilience to drought.

“We are proud to offer this new insurance option that encourages the use of conservation practices that benefit not just the environment, but also producers’ balance sheets,” said RMA Administrator Marcia Bunger.

“America’s agricultural communities are on the frontlines crafting solutions to address climate change and improve the environment. Across USDA, we’re adapting our programs to meet the needs of producers, as well as the challenges they face.”

“Corn farmers across the Midwest have adapted to changing conditions, including adopting climate-smart practices like split-nitrogen application, and the Federal Crop Insurance Program must continue to evolve to meet the needs of farmers across the country,” said Todd Barker, Meridian Institute CEO.

“With the availability of PACE in the crop insurance market, USDA, RMA, the Federal Crop Insurance Corporation Board and the Biden administration have taken an important step forward to ensuring that the nation’s agriculture sector is resilient and strong for the long-term.”

More Information

To learn more about PACE, visit the RMA’s Conservation webpage — www.rma.usda.gov/Topics/Conservation — which has frequently asked questions, a fact sheet and other resources.

Farmers with crop insurance questions or needs should contact their insurance agents about conducting business remotely, by telephone or email. More information can be found at farmers.gov/coronavirus.

Crop insurance is sold and delivered solely through private crop insurance agents. A list of crop insurance agents is available at all USDA Service Centers and online at the RMA Agent Locator at tinyurl.com/2p8bvvbr.

Tom Doran

Tom Doran

Field Editor