Agricorp, the provincial crop insurance agency, will now cover corn infected by over five parts per million of deoxynivalenol (DON) with a benefit to help farmers cover harvest and marketing costs for damaged corn.
The interim measure for 2018 will pay producers that are insured, $0.79 per eligible bushel to cover extraordinary costs being managed by producers with corn infected by DON.
Why it matters: Farmers have been stuck trying to decide if it is worth harvesting corn infected with DON, as it is expensive to manage, store, sometimes clean and then move it to a market. Marketing is especially challenging as what elevators and end users are accepting is constantly changing.
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The combined sum of bushels under five ppm and bushels covered by the salvage benefit cannot exceed a customer’s corn production guaranteed by insurance. Corn yields are high in most areas of the province, so some farmers may have enough good corn that their guaranteed production will be met by the good corn. In this case they won’t be able to make a salvage benefit claim for their DON-infected corn.
Agricorp encouraged farmers in an announcement Wednesday to have a close look at their yield of acceptable quality corn compared to their insured production level.
If farmers have almost enough quality corn to meet their insurance-guaranteed production, then they may have only some of their DON-infected corn covered. (See bottom of this article for three scenarios from Agricorp).
Corn harvested under five ppm is usually marketable through normal channels.
Otherwise, farmers are having to find feed options, elevators who have found end users for high mycotoxin corn or an ethanol plant that is doing a high-DON corn run – all of which takes time and additional travel. Testing protocols for DON have also created consternation among farmers as the random samples can or cannot find the infection, resulting in stories of farmers with a rejected load at one elevator that’s accepted at another based on testing.
Farmers need supporting documentation to apply for the benefit and that includes:
- Weigh slips
- DON test results
They will be paid once their yield is finalized.
DON-infected corn can’t be fed to animals over a particular level of infection. Hogs and poultry are especially susceptible.
Example calculations for scenarios
(Provided by Agricorp)
Scenario 1: Total yield of corn below and above 5 ppm is less than the guaranteed production
- Your guaranteed production (GP) is 10,000 bushels.
- Your total yield is 9,000 bushels.
- 6,000 bushels are under 5 ppm and 3,000 bushels are over 5 ppm.
Your salvage benefit is calculated as follows:
Salvage benefit = total bushels of corn over 5 ppm x $0.79= 3,000 bu x $0.79 = $2,370
Claim: Through Production Insurance, the corn salvage benefit would cover all 3,000 bushels, totalling $2,370, which would help the producer achieve a total yield of 9,000 bushels. The producer would also receive a production claim on the 1,000-bushel shortfall from their guaranteed production.
Scenario 2: Total yield of corn below and above 5 ppm exceeds the guaranteed production.
- Your guaranteed production (GP) is 10,000 bushels.
- Your total yield is 12,000 bushels.
- 8,000 bushels are under 5 ppm and 4,000 bushels are over 5 ppm.
Your salvage benefit is calculated as follows:
Salvage benefit = (GP – harvested yield of corn under 5 ppm) x $0.79= (10,000 bu – 8,000 bu) x $0.79 = 2,000 bu x $0.79 = $1,580
Claim: Through Production Insurance, the corn salvage benefit would cover 2,000 bushels, totalling $1,580, as this is the number of damaged bushels that are required in order to help the producer achieve their yield guarantee.
Scenario 3: Total yield of corn below 5 ppm exceeds the guaranteed production
- Your guaranteed production (GP) is 10,000 bushels.
- Your total yield is 12,000 bushels.
- 11,000 bushels are under 5 ppm and 1,000 bushels are over 5 ppm.
Your salvage benefit is calculated as follows:
Salvage benefit = (GP – harvested yield of corn under 5 ppm) x $0.79= (10,000 bu – 11,000 bu) x $0.79 = -1,000 bu x $0.79 = -$790 (zero payment)
Claim: No claim is payable. The producer’s yield of corn under 5 ppm exceeds their guaranteed production and, therefore, they are not eligible for the salvage benefit or a production claim.
