Commodity Markets Gain Strength

With consumers paying $4/gal. at the pump, cash corn nearing $7/bu. and copper trading near $4/lb., it’s clear that commodity markets held fairly strong in the first 11 weeks of the year.

Global financial firm Credit Suisse said market strength in February stemmed from an overall improvement in the worldwide macroeconomic environment.

“The economic data released toward the end of the month highlighted continued gradual improvement in global growth momentum, which is supportive to future commodity demand,” Nelson Louie, global head of commodities for Credit Suisse’s asset management operation, said.

Louie noted that the markets remain particularly susceptible to supply-driven volatility, particularly in the petroleum and agricultural sectors.

Moving forward, speculation about the recovery of the U.S. economy leading to inflationary woes will have traders and analysts watching the strength of the dollar.

“While the economy is improving, we believe the U.S. Central Bank will be in no hurry to raise rates and possibly choke the budding recovery,” said Christopher Burton, a senior portfolio manager with Credit Suisse’s Total Commodity Return Strategy. (source: feedstuffs.com)

Deadline Crop Insurance New/Changes/Cancels is near

March 15 2012 is the last day you can take out coverage for Spring 2012 crops.   This is also the last day you can make changes to your existing program or cancel (must be in writing) a contract.
Please be aware you cannot cancel a crop contract by just reporting zero acres.  It must be in writing and it must be requested prior to the March 15th deadline. 
Call Becky or Leslie at our office if you have any further questions.  800-359-2874

Is your equipment protected?

Google “equipment breakdown” and you will see lists of various insurance offers and companies who offer many types of breakdown coverages.  However it is hard to find a site that explains what this type of coverage is or why people need it.

Equipment breakdown is as vital as property coverage for your small or large farms and all commercial business.  Coverages are relatively inexpensive and provides needed protection for today’s most common farm and home equipment and causes of breakdown.  On today’s farms, hi-tech equipment runs all types of operations more than ever.  Overall farm exposures have evolved, and computer equipment plays an important role in business production.

Many people do not know that most farmowners policies exclude coverage for equipment breakdown. Many farmers also mistakenly believe the cost is prohibitive.  The reality is the cost is very reasonable and farmers and commercial agribusiness customers need this coverage the most! Their businesses cannot survive with any loss in power or key equipment.  Here are some examples of the types of common risk covered:

  • Mechanical breakdown
  • Electrical short circuit
  • Utility service interruption
  • Business computer breakdown and data restoration
  • Pressure vessel bulging, cracking, collapse

Equipment breakdown can be a stand-alone policy or built right into your farmowners policy.  It depends on the type of farm business and equipment owned. Costs to fix, repair and replace all farm machinery rise each year. Please do your business a favor and find out more about this important coverage.  Reach out today to your independent agent to get a quote.

Do you know the leading cause of equipment breakdown losses?  Electrical surges.

Crop Underwriters Say Obama Tax Plan Cuts Federal Program Too Much

Crop insurance underwriters and producers are not happy about a proposal in the Obama administration tax plan that would further reduce crop insurance subsidies by an estimated $8.3 billion over 10 years.  Tom Zacharias, president of National Crop Insurance Services, said that “the federal crop-insurance program has already contributed more than $4 billion towards deficit reduction, and $12 billion overall in spending reductions since 2008.  Congress needs to evaluate the economic impact of weakening the primary safety net on which farmers and our rural economy can rely.”  Charles Symington, senior vice president of government affairs for the Independent Insurance Agents and Brokers of America, said the president’s decision “will drastically change the program as we know it today and have a crippling effect on its intended beneficiaries – farmers and ranchers.”  The new cuts are in addition to the $6 billion in budget cuts for the program over 10 years implemented last year.  Those cuts included limits on commissions paid to insurance agents who sell crop insurance.  The new proposal calls for lowering crop insurance companies’ return on investment from the current projected 14 percent to the 12 percent target of the program, saving $2 billion over 10 years.  According to Zacharias, “The plan is devastating to those in agriculture, particularly in a year that has seen extremely volatile commodity prices and weather events – from droughts in Texas and Oklahoma to floods in the Northeast and Midwest.” (Property Casualty 360, September 20, 2011

Supporting the Local County Fair

The annual fair is always a very exciting time for young 4-H members.  It is the time of year that members can display their hard work, enjoy time with friends, and spend an entire week drinking milkshakes and eating French fries.  Bush Insurance is honored to be able to support these youngsters and this event by purchasing livestock and cheese from the sales at the Crawford County Fair and the Waterford Fair.

Bush Insurance would like to thank the 4-H members for their dedication, and we look forward to supporting this event in the future. 

We want to hear from you – how are you involved with your local county fair?

Crop Shortage Forecast Leads to Jump in Futures

Corn, soybean, and wheat prices surged, signaling higher costs for food and biofuels, after the government said U.S. farmers will harvest smaller crops than forecasted last month after a damaging heat wave.  The USDA cut its corn crop estimate by 4.1 percent, reduced the soybean forecast by 5.2 percent, and said spring wheat production will be 5.2 percent below what it predicted in July.  Parts of the Midwest, the main growing region, were the hottest since 1955 in July, affecting crops in those areas.  The price of corn has jumped 74 percent in the past year and corn production will total 12.914 billion bushels.  Soybeans will total 3.056 billion bushels, while wheat may fall to 2.077 billion bushels. (Pittsburgh Tribune Review, August 12, 2011)

Dairy Policy Reform Takes Shape

Representative Collin Peterson has introduced draft legislation based on a proposal called “Foundation for the Future,” which dairy producers developed on the heels of a crisis in 2009 when the U.S. dairy industry was hit by increased feed costs and a fall-off in world demand.  The new proposal would reform dairy policy by protecting the margin between what dairy producers pay for feed and the price they receive for milk.  Current dairy programs would be replaced with a new three-part policy that aims to keep dairy farmers from suffering catastrophic losses while keeping the industry competitive in the world market.  The legislation would provide federally insured coverage of 75 percent of a producer’s production history, while giving the producer an option to buy up to 90 percent coverage.  The legislation would also create the Dairy Market Stabilization Program, which would provide short-lived incentives for producers to cut back on milk when supplies are overburdened.  The program would develop signals to warn producers when additional milk production enters markets and threatens their margins.  In addition, the agriculture secretary would have the authority to purchase dairy products from commercial sources for donation to food banks and other sources.  Finally, the legislation would reform federal milk marketing orders to “simplify the basic system.”  It would eliminate complex pricing formulas used in the federal milk orders to determine the minimum price for milk under the current system of four separate classes of milk.  The four classes of milk would be reduced to just two, moving dairy pricing into a more competitive pricing structure. (Feedstuffs, July 18, 2011)

House Panel Votes to Cut Farm Subsidies

The House Appropriations Committee voted recently to cut farm subsidies to pay for deficit reduction and other budget priorities, chipping away at the billions of dollars a year that are directed to farmers.  The committee approved an amendment to lower the maximum adjusted gross income a farmer can have to earn certain subsidies.  While many farmers can now make as much as $750,000 annually and still receive subsidies, the amendment would lower the threshold for some to $250,000.  The committee also approved an amendment to use domestic farm subsidies to pay for $147 million in annual payments to Brazil’s cotton sector to settle a World Trade Organization dispute.  The committee later eliminated those payments to Brazil entirely, shifting the money to domestic feeding programs.  Both of these amendments would dip into direct payments to farmers, which are a type of subsidy paid regardless of crop price or yield.  They cost the government about $5 billion a year and have been a frequent target of critics. (Associated Press, June 1, 2011

Welcome to our “New” site

We have just updated our site and I believe it looks great.  We hope you think so.  I will be posting information from time to time which we hope will be helpful.  Let us know how you like the site?

News & Updates

Here you will find news and updates from the world of agriculture, business, and insurance. We will constantly look for information that we feel is both important and useful in carrying out your normal business operations.