Crop hail insurance

[AKA]

Hi, I am about to insure my OSR for hail damage and was wondering if anyone bothered to insure their cereals as well? Iv never heard off locally of a crop of corn being damaged by storms. Tia

 

[Brisel]

Do the maths. If a catastrophic hail event is a 1 in 20 year probability, you'll pay more than 1/20th of the crop's value every year in premiums. Set up an ISA and put what you'd spend on the premiums into it every year so you can draw down on it if you get hit.

If you're farming land all over the place I'd say you're already spreading the risk pretty well. If you're in a ring fence & don't have the cash to withstand losing a chunk of your output perhaps insurance might be worth considering.

 

[Courier]

Basically - If you can afford the insurance then you don’t need it.

 

[Brisel]

Look at this another way - if you want to mitigate risk, invest in managing more common risks like adverse crop price movements. Obviously I'm not about to suggest you sell forward when we're discussing hail obliterating your harvest but if you spent some of the money on a price risk strategy e.g. buying LIFFE/MATIF options I'd say the likelihood of a payout is greater, though this is reflected in the price.

Just trying to think outside the box, though I'm still coming back to the idea that paying into a fund you can quickly liquidate if the worst happens might be a better investment. Why do we insure? Because we don't want to have to make or forgo a big payout. We're transferring risk and paying a middleman a margin for the process.

 

[yellow belly]

If you have farmed in the same place for a long time or talk to those that have and they have never seen bad hail then the risk is much reduced

I farm one farm where they have had damaging hail 3 times in the last 35 years 1 did wheat 2 did rape although in one of those years was after all but 10 acres

I know of one farm where they lost 2 tonne per acre of wheat

 

[Val66]

We have lost rape twice in the last 7 years. Insured against hail this year £7/acre

 

[DrWazzock]

I have insured OSR after a customer of ours lost all their OSR to hail just before we were due to harvest it. Friday night it was 13% so we packed up. Went back Monday and it was all on the floor. Every seed. Glad it wasn't ours but it was a sight that nearly made you sick to look at it.

Then we started swathing which mitigated the risk a bit, but we never had a direct hail hit since that time.

Now I am back to combining direct and am also wondering about insurance. I think the £7 per acre isn't bad. Some of the sprays cost more than that and seem to do f all.

 

[Pan mixer]

Me and 2 neighbours lost every grain of our barley in a broad (300m wide) stripe across our crops, wheat in between wasn't so badly affected but it really did take every grain out of the barley which was standing upright, awns in the air and milky to cheesy ripe.

It hailed so hard that a neighbour had a 4 foot deep drift of hail at the bottom of a very modest slope on a grass track.

That was one year out of 50 though.