Morning Coffee & Ag Markets

Monday, November 11, 2024

Seeking Participants for a Rice Crop Insurance Participation Study!

Author: Ryan Loy, Assistant Professor and Extension Ag Economist, University of Arkansas

Drs. Hunter Biram and Ryan Loy are seeking interested rice producers to participate in an in-person survey on November 14, 2024 at Riceland's Annual Membership Meeting. The survey session will begin upon the completion of the membership meeting. Our survey aims to explore the motivations behind rice farmers' participation in federal crop insurance programs. Interested farmers should contact Dr. Ryan Loy (rloy@uark.edu) or Dr. Hunter Biram (hdbiram@uark.edu) or respond to the sign-up page (given below).

Important Survey Details:

Estimated Time: 2-3 hours

Participation: Voluntary and Confidential
All identifying information will remain with Drs. Hunter Biram and Ryan Loy and destroyed upon the completion of the project.
Only identifying information on the survey: county and principle crop
Other identifying information: Name, address, and SSN for participation payment.

Necessary paperwork:
Schedules of insurance (2013 - 2023)
FSA-578 (2013 - 2023)
grain elevator settlement sheets (2013 - 2023)
Researchers will not keep or copy these sheets.

Participation reimbursement:
$200 per participant
Paid via check or cash - this is still to be determined.

Interested in participating? Sign Up Here!

The following is some general background information that serves as the motivation for this study:

The Federal Crop Insurance Program (FCIP) has witnessed a steady rise in insured acreage since 1989, with a notable shift from yield-based to revenue-based products introduced in 1996. This transition has seen a notable increase in coverage levels, with over half of insured acreage opting for at least 75% coverage since 2012. However, rice stands out from this trend, with a consistent preference for yield-based products despite increasing insured acreage.

Moreover, a significant portion of rice producers opt for lower coverage levels, potentially driven by the inclusion of non-production loss coverages like prevented planting and replant in multi-peril crop insurance products. Despite this, historical loss ratios for rice remain higher than other crops, indicating discrepancies in risk assessment and premium pricing. This study aims to explore the participation behavior of rice producers in the FCIP, employing qualitative and quantitative analyses to understand the underlying factors shaping their insurance choices.

References

Biram, H.D. and Mills, B. 2023. Analyzing the Relative Riskiness of Rice Yields. Southern Ag Today. 3(19.4). Retrieved March 11, 2024 from https://southernagtoday.org/2023/05/11/analyzing-the-relative-riskiness-of-rice-yields/

Coble, K. H., Knight, T. O., Goodwin, B. K., Miller, M. F., Rejesus, R. M., and Duffield, G. 2010. A comprehensive review of the rma aph and combo rating methodology: Final report. Prepared by Sumaria systems for the risk Management agency.

Dismukes, R. and Coble, K.H. 2007. Managing Risk with Revenue Insurance. Amber Waves: The Economics of Food, Farming, Natural Resources, and Rural America. United States Department of Agriculture, Economic Research Service, 1-6. DOI: 10.22004/ag.econ.125428.

USDA-RMA. (2024). USDA Rick Management Agency Cause of Loss Historical Data Files.

USDA-RMA. (2024). USDA-RMA Summary of Business. Retrieved March 8, 2024, from https://www.rma.usda.gov/SummaryOfBusiness

Arkansas Market Update

(as of November 7, 2024)

Exchange	Crop	Futures Month	Unit	Date (10/31/24)	Month Ago (9/30/24)	Year Ago (10/31/23)
CME	Corn	DEC24	$/bu	$4.26	$4.26	$4.69
CME	Rice	NOV24	$/cwt	$14.47	$15.24	$16.06
CME	Soybeans	NOV24	$/bu	$10.04	$10.53	$13.62
CME	Wheat	JUL25	$/bu	$6.07	$6.37	$6.28
ICE	Cotton	DEC24	$/lb	$0.70	$0.74	$0.76
USDA-NASS	Peanuts*	Weekly U.S. Avg.	$/ton	$488	$526	$488

*SOURCE: Peanut Prices, Runner-type, USDA, National Agricultural Statistics Service, November 1,2024.

Fertilizer	State Average Cash Price
Urea ($/ton)	$475.00
34-0-0 ($/ton)	$465.00
Ammonium Sulfate ($/ton)	$441.00
DAP ($/ton)	$810.00
Triple Super Phosphate ($/ton)	$674.00
Potash ($/ton)	$431.00
Pellet Lime ($/ton)	$230.00
Off Road Diesel ($/gal)	$2.57
Highway Diesel ($/gal)	$3.24

NOTE: Each state average price is taken across multiple input suppliers across Arkansas. For a price more local to you, please contact Mr. Riley Smith at rsmith@uada.edu.

Mississippi River Level at Memphis, TN

(as of November 7, 2024)

Current Level (ft)	-8.44
Year Ago (ft)	-5.30
Critical Low Water Level (ft)	-5.00
Action Flood Stage Level (ft)	28.00

SOURCE: NOAA National Water Prediction Service

NOAA 7-Day Weather Forecast

(as of 11/7/2024)

SOURCE: NOAA National Weather Service Weather Prediction Center

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University of Arkansas System Division of Agriculture | https://fryar-risk-center.uada.edu/