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FMH InsureCast brings you the latest from FMH and the industry to help navigate the expansive crop and farm insurance landscape. Topics include new products to leverage crop insurance within your risk management plan, and helpful tips from FMH staff and industry experts to stay informed on industry developments.
Welcome to FMH InsureCast, a podcast created by Farmers Mutual Hail designed to deliver expertise and insights from trusted FMH team members and industry experts. Each new episode will dive into new products, industry updates, and innovative solutions. Let's get to today's topic.
Dave DeCapp:Happy New Year, everybody. I'm Dave Decap, back here again with you today for a very exciting episode of FMH and Surecast. As we all know, there has been a lot of recent some would say a flurry of activity in the ag industry. Not giving anybody any new news, but, we've had a continuing resolution in the last few weeks that included a farm bill extension, economic aid, disaster aid. We got a new administration coming in.
Dave DeCapp:And with that, bring brings in all the political appointees along with that. So right. So we have that plus everything else going on. We have a a lot of uncertainty and a lot of things we really wanna talk about. So it makes sense to talk about the impacts of these things and the biggest concerns that farmers are facing in particular, but our crop insurance agents are facing the same thing.
Dave DeCapp:And how everybody can prepare ultimately, like, from our, piece of the pie where we focused to make the best crop insurance decisions to help at least mitigate some of those concerns, so, to do the best of our ability to do that. So to tackle some of these issues, we have a very special guest today. I can't do a big reveal because his name is in the title. But, but before I bring him on, let's, let's bring in my partner in crime, Ken Ripley. Ken's a familiar voice, a familiar face to the podcast.
Dave DeCapp:He's our northwestern regional sales manager. And, just as importantly, he's a southern Minnesota farmer. So, Ken, how you doing?
Ken Ripley:Doing great. Thanks. So excited to be on here today. I'm looking forward to our discussion.
Dave DeCapp:Alright. Great to have you. We need this firepower because, I know Ken's as excited as I am to bring our guest on. So let's without further ado, let's bring him on, mister Chip Florrie from Farm Journal. Chip is the host of AgriTalk, and, I know you don't need much introduction, but, I wanna welcome you to InsureCast, Chip.
Chip Flory:Dave, thank you so much. Ken, good to see you again, man.
Ken Ripley:Nice to see you.
Chip Flory:Yeah.
Dave DeCapp:Alright. Super super great to have you here. Really looking forward to the discussion. Like I like I've said before we got on live here, the free form discussion. There's so many things to talk about.
Dave DeCapp:We're gonna try and, try and hit some of the most important ones. But before we get going, Chip, given the timing and everything, can can you talk a little bit about what you're up to? I mean, you're the ag host of AgriTalk. You do 2 of those a day. Just got finished with 1 as we're recording, but, what else fills your plate these days?
Chip Flory:Yeah. Policy and news and issues, we talk about each morning on AGRITOC. In the afternoon, we talk about markets. And and there's no shortage of things to talk about on AGRITOC right now, and and, we've got a lot of people that wanna get on and and and tell their story about, you know, the things that are important to them. And and so we're having to do a bit of of picking and choosing on exactly what's gonna get on them and what we might have to put off.
Chip Flory:But but boy oh boy, it's, it it is an active. I I I guess that'd be the easiest way to describe it, Dave. It's an active time for us right now. Yeah.
Dave DeCapp:Oh my goodness. Yeah. I mean, just listen to, cherry picking a few, agri talks over the last couple weeks. I mean, it's it's amazing the amount you can't get to because of so many of the moving parts going on. And, unfortunately, a lot of them, you know, things we don't necessarily wanna see happen but really need to be aware of.
Chip Flory:Yeah. Dave, and just, just just to to make one point on that, we we try to dig a little bit deeper on Agritech as you know. We we when we get a guest on, we don't keep them for 2 or 3 minutes. We keep them on for 10 minutes. We have that conversation.
Chip Flory:We wanna we we wanna make sure that that we get to the bottom line of the story that we're talking about. So it it's a little bit different format, but but, we we get we get through as much as we possibly can.
Dave DeCapp:Yeah. Yeah. Yeah. Excellent. So well, let's, let's start at the highest level possible we can.
Dave DeCapp:You know, do you have any just especially given the recent conversations you've had, do you have any general takes, general, thoughts on the outlook of of of where we are right now with US ag, US Ag in particular, but, obviously, it encompasses the entire world. Like, what are the things that are, that you're keeping an eye on?
Chip Flory:We're going through a huge transition, guys. That's the bottom line. The 2024, the what what we saw happen in net farm income stunk. And the way that the that the cash flow, has just drained out of the industry here late in 2024, early part of very early parts of 2025 is is nothing short of of scary. So that's part of the transition.
Chip Flory:Now when we look beyond that and, you know, taking a look at the Purdue University Ag Economy Barometer, for example. Mhmm. When you look at at the producer's reaction to that and and survey responses, we see that there is optimism for 12 months out. There is optimism for 5 years out, and it's because they anticipate that we're probably putting in a low in this economy right now. Now it might take a little while to, you know, to to lock in that low on revenue, but they feel like that's where we're at right now and things are gonna get better.
Chip Flory:So it's a transition period, and it's not gonna be any fun for a while here. It it just it just isn't.
Ken Ripley:Yeah. Interject one thing here too, especially with, you know, with the relief act that just came out and the dollars that are gonna be coming, you know, from the FSA office on programs in the next year. You know, love that as a producer, helps short things up, but, you know, one of the things we're we're gonna ask is, is that kicking the can? Because I feel as inputs, nothing's going down and does that injection just keep does it just kick the pain out further? I mean, what's your thoughts
Dave DeCapp:on that?
Chip Flory:Great. Great point, Ken. You know, many will argue if we're going to have sub well, if we're gonna have 4 and a quarter corn, if we're gonna have sub $10 beans, we're gonna need to see some kind of an adjustment on the input side of things.
Ken Ripley:Mhmm.
Chip Flory:But with the ERP on the 23 crop, ERP on 24 crop, the economic assistance, the disaster aid. All the input suppliers out there are I I they're in business to get as much of it as they can. Right. And that's where they're the input prices sure look sticky to me. Yeah.
Chip Flory:And we're not we're we've seen some relief on the fertilizer side, but not enough to to to give us a whole lot of encouragement as far as what the the profit potential is on this corn crop and and the bean crop, heading into 2025. It's a great point. We need to see a reset on those inputs, and and we need to see that. But at the same time, guys, when the inputs go through a reset, everybody's feeling the hard times. That's that's the bottom line.
Chip Flory:Now look at what's happening, obviously, on on the equipment side of things with, with the layoffs at Deere, the layoffs at some of the other manufacturers. Mhmm. The the companies are feeling it.
Ken Ripley:Mhmm.
Chip Flory:It and it's it's it's gonna be felt throughout the industry.
Ken Ripley:Yeah. Absolutely. Yep. Yeah. One thing too is it just seems like especially with the fertilizer side of things, you know, the world demand, it's gonna make it tough.
Ken Ripley:I mean, especially some of the talk, you know, the the battle between countries so to speak right now. Is that gonna help or hurt us? So so we need to have a correction, but is the market gonna let it correct? That's the big question.
Chip Flory:Kent. Kent, you're exactly right. I mean, we sit here and we think, okay. The we've we've got a reason to be optimistic because and I think most farmers have this this attitude, this perception. One of the reasons to be optimistic is because of the incoming president.
Chip Flory:Trump is is coming in. But at the same time, he talks about tariffs on Canada.
Ken Ripley:Mhmm.
Chip Flory:And we're bringing in 80% of our potash from from Canada. Mhmm. If we're gonna be putting a tariff on anything that comes in from Canada, there's another lift in your input prices. There's a lot to be sorted out. Okay?
Ken Ripley:Mhmm.
Chip Flory:When it comes to tariff and trade issues, I, you know, I I tend to jump straight to the freer and the fairer. Okay? And and I wanna stay away from tariffs, and and I think most wanna stay away from tariffs. But at the same time, I understand that there is a there is a place for this stuff. Right.
Chip Flory:And, you you know, we'll find out in the first, jeez, I would say 60 days
Dave DeCapp:Yeah. I wouldn't say so.
Chip Flory:Of the Trump administration, just how serious the the, I don't wanna call him a threat, but but just how serious the idea is that these tariffs are gonna be put in place or if they are just being used just being used as leverage right now to to start conversations that that Trump has gotten started because of the tariff talk.
Ken Ripley:Right.
Chip Flory:Yeah.
Dave DeCapp:True. While we're on the administration, so Brooke Rollins is a current nominee or will be the current nominee, for secretary ag. What can you tell us, you know, about her and her background? I mean, generally, the general news seems favorable as far as her position with ag and and understanding and background. But do you have some color you can add to
Ken Ripley:that?
Chip Flory:Boy, guys, I wish I had all kinds of color that I could add to it, but I don't. I I'm not that familiar with Brooke. Now this I understand, of of many of the nominees, which there are some controversial ones.
Ken Ripley:Mhmm.
Chip Flory:It looks like she's got plenty of bipartisan support. Mhmm. And, miss Rollins is going to get through the nomination process very, very quickly. I will say this. 1 of the first conversations that I had with Jim Weismeyer, pro former policy analyst, about, Brooke Rollins was that it's his understanding as well that if she picks up the phone and calls president Trump, he's gonna take the call.
Chip Flory:That's
Dave DeCapp:That saying that.
Chip Flory:Is that is a good person to have in agricultural's corner
Ken Ripley:Yeah.
Chip Flory:When it when it comes to some of these policy issues that are gonna be coming up, some of the trade issues that are gonna be coming up. I mean, if the tariff card is played, there's gonna be a lot of people that are gonna be talking to Rollins, and she's gonna be passing that information on to the president. So
Dave DeCapp:Yeah.
Chip Flory:I think that's a that is an important piece of this this, puzzle.
Ken Ripley:Yeah. That's good. One of the things too is, so as we're, you know, kinda talking about the extensions too with American Relief Act, what, you know, is have you heard anything, you know, with your talks with Jim Weismeyer, you know, on kind of some direction on the backside with that too. We got the farm bill, and I'm hearing about 1 bill trying to come here in the next year. I mean, what's, I mean, what's the insight you have on that side?
Chip Flory:Man, borders, trade issues, I mean, they they're all in tax packages all in one bill. If if everything that is included in this bill that they that that they say is included on this first run, there's no question it'll be the biggest bill that's ever passed the history of the US. Yeah. It is a monster. Now does that mean that it should be broken up a bit into pieces so that we can all have a better maybe a better understanding of exactly what's in the bill?
Chip Flory:Sure. But when when we are dealing with such slim margins, majority margins in the house and in the senate, sometimes you've this is a if they're gonna get something big done, they're gonna have to get creative on on how they're going to get it done. And putting it all into one package, you know, maybe maybe somebody doesn't wanna support the tax package, but they sure wanna support the border initiative.
Ken Ripley:Right.
Chip Flory:So they're voting for the border initiative and willing to go along with the tax. Whereas if the tax was a standalone, maybe they wouldn't do it. Mhmm. And I think it's the narrow margins in the house and the senate that are driving this kind of a tactic to to get this done. Can I mean, can you imagine wrangling the cats and and trying to if if every bill was done individually?
Chip Flory:Right. Oh, man. You can herd cats once, but can you do it a second time? Can you do it a 3rd time? Can you do it a 4th time?
Chip Flory:I think they're looking to just get this job done once.
Dave DeCapp:In the span of 2 years too. Right? Yeah. Because you don't know what's gonna happen in midterms and generally, historically, what happens in the midterms.
Chip Flory:Dave, awesome point. Awesome point. If there's one big lesson that that president Trump admits to learning in that Trump one point o is that he he didn't focus enough on the first two years of his first, administration. This is a a brand it it may be a similar administration, but it's a brand new presidency. And he ain't wasting no time, Dallas.
Dave DeCapp:Well, we're seeing that already.
Chip Flory:No time. Yeah. He's gonna hit the ground running, in these first two years.
Ken Ripley:Yeah. Yeah. One of the things too, just, you know, kind of trailing back to a little bit on, like, you know, grains. You know, seems like there's plenty of supply. Right?
Ken Ripley:We're coming off of what sounds to be record yields, and we'll know. Yeah. What the official number is. But, boy, it's, seems like we're just so I mean, so much production. Now how do we how I mean, with the prices have come down Mhmm.
Ken Ripley:We're still we're getting some sales outside the US, but what do we do to attract that that worldwide buyer back to our table when they just kinda left us with the dollar being so high valued?
Chip Flory:Yeah. Yep. Alright. Corn's done a pretty good job of it. Corn has on on the domestic side with the ethanol grind, on the feed side.
Chip Flory:I mean, guys, they're running some steers through South Dakota sale barns. Yeah. You know, lots that are averaging a ton. We're using feed. Mhmm.
Chip Flory:I mean, there's no question about that. Mhmm. So the ethanol side looks good. The feed side looks good. I know you got the residual component of the feed and residual category.
Chip Flory:They can always play with that. I call it feed and fudge. But then you gotta come back to the export side of things. Right. And the export number has been really good.
Chip Flory:Good enough at least to get to USDA's current projection. So if we see any movement on the demand side for corn, I still think it we we get a bit of a lift. I think if there's movement on the supply side, the, you know, USDA has already shown us what the trend is. They probably gotta back that yield even though it's gonna be a record yield.
Ken Ripley:Mhmm.
Chip Flory:They probably still need to back that yield off a bit. Even if it's 50,000,000 bushels, guys, I think that 50,000,000 bushels comes off of carryover. So instead of a a 2,200,000,000 bushel carryover like we were talking about 4 or 5, 6 months ago, we're not even talking about a 1,700,000,000 bushel carryover anymore. We're probably talking about a, you know, a 1.55. And when you get right down to it and look at the way that the market is trading with basis levels and and some of the spread action, the corn market's acting like supplies are even tighter than that.
Chip Flory:True. So I I mean, the corn market's acting like it's a 14 on on carryover, something like that. Because what I'm thinking is that it's a stocks to use ratio a whole lot closer to 7 a half percent than to 10%.
Ken Ripley:Right.
Chip Flory:So corn market, it's not hard to come up with, I can be friendly corn. It's not hard to come up with that story. Beans are are a a much, much tougher story to tell. Mhmm. We took we we took 70,000,000 bushels off of or was it 80,000,000 bushels off of being carryover?
Chip Flory:We're still at 470,000,000 bushels. Yeah. When you look at the global stocks situation, it it's hefty. You you mentioned, Dave, how can we bring that world buyer back to the market, back to the US? Really, what we're talking about is how can we get China to back buying US beans?
Chip Flory:They like US beans because they can store. They like US beans because of the quality, but, boy, they sure like to go to South America for price and volume. Mhmm. And, I I the the the way that we get China to come back is to see some economic improvement in China. And I I mean, you wanna talk about a slow start coming out of COVID.
Chip Flory:This has been a a complete failure to launch in that economy.
Ken Ripley:Mhmm. Exactly. Yeah. And even throwing the wheat, you know, it's it is when you talk about corn, it's amazing that we have rallied up especially with what's going on with the wheat.
Chip Flory:Oh, this this wheat trade is just baffling to me, which doesn't surprise me because it's wheat.
Ken Ripley:Mhmm.
Chip Flory:But wheat is pretty baffling to me because you look at the domestic balance sheet and it's I'm not that excited about it. You look at the global balance sheet and look at some of the things that are happening in China and India and Egypt and Algeria, you know, the big wheat users, not just the importers Yep. But the big wheat users. India right now has a record wheat price. Now they're not importing a lot of wheat because they've got is they've got adequate supplies for now, but it's a record wheat price and we've got 5 and a half dollar wheat.
Chip Flory:Mhmm. There's just the whole dynamics and the hesitancy Mhmm. To come to the US to to fill some of the needs that are out there, it's just baffling to me. It really is. I I it it's wheat's not a wheat is not a bad story to tell.
Chip Flory:I can get bullish wheat at 5 and a half dollars.
Ken Ripley:Great.
Chip Flory:Yeah.
Dave DeCapp:True. Gonna say I don't wanna stifle that part of the conversation. I was gonna turn it back to the farm bill
Ken Ripley:real quick.
Dave DeCapp:I've, I had okay. I had a, a question that I'd I'd heard it in a couple of different spots, and I I know it was mentioned that I had to talk to, but is taking the prospect of, incorporating tariffs into the farm bill, not just the the, kind of the background discussion, but into the farm bill itself. Have you have you heard or or talked or had any thoughts along those lines?
Chip Flory:No. I'm no. No? No. I I haven't.
Chip Flory:I I don't think that that trade issue and working tariffs into the farm bill. I I just don't think that that is something that, chairman Thompson or chairman Bozeman would be real interested in doing.
Dave DeCapp:Would make it tough to pass bill even tougher.
Chip Flory:Oh, yeah. Right? Yeah. I got I got a feeling that John Thune would be tapping would be tapping Bozeman on the shoulder saying that just makes it harder for me to bring it to the floor.
Dave DeCapp:Yeah. Mhmm. Yeah. Mhmm. Yep.
Dave DeCapp:Yep. Totally understand. And it makes total sense too. But as far as, while we're on the farm bill, betting wager. Right?
Dave DeCapp:So Thompson has mentioned he wants to get a pass in Q1. There's some folks that say, others are, like, very optimistic will get a pass in the first half of the year, and then others that are very pessimistic saying 2026. So what what does your crystal ball say?
Chip Flory:That's the summary right there. You got it. I mentioned I I mentioned Thune, and I mentioned Bozeman. They've and and, you know, that's where the thing has been stuck is in the senate. She even if Stabenow would have gotten it done on it, she could have done a whole lot more, a whole lot more to get that farm bill done than what she
Ken Ripley:did. Mhmm.
Chip Flory:But even if she would have gotten it out of committee, was Schumer gonna bring it to a floor vote?
Dave DeCapp:No way. Probably not.
Chip Flory:No way. Right. You don't Schumer doesn't give a crap
Dave DeCapp:Yeah. About
Chip Flory:getting that farm bill done. Mhmm. John Thune, that's a different story. Yeah. Bozeman wants to get it done and has already done, what, 90% of the work with Thompson
Ken Ripley:Mhmm.
Chip Flory:To get this thing done. Be because of that, now you gotta look and see where it all fits on on the legislative priority list. Right?
Ken Ripley:Mhmm.
Chip Flory:We've got the 1 year extension.
Dave DeCapp:Mhmm.
Chip Flory:So that's cushion. If this one big bill, this one big beautiful bill starts to gain some momentum, they're not gonna work on anything but that.
Dave DeCapp:Right.
Ken Ripley:True.
Chip Flory:Farm Bill probably is not gonna get a whole lot of attention until they get that done. Now if it starts to break down and they start to break it into the different components like I was talking about, you might have Thune and Johnson come together and say, listen, we need to show that we can get something done. Where's the easy pickings?
Dave DeCapp:Mhmm. Good point.
Chip Flory:And that might be where the farm bill would be then. So if the one big beautiful bill comes together, push the farm bill to the second half of the year. If it starts to break down, bring it to the Q1.
Dave DeCapp:Move it up. Yeah. Yep. No. No.
Dave DeCapp:Good point. It'd be a good strategy too if either one of those situations were to happen. So you're not I I I noticed that you're not willing to put any money down on, either of those three options. No. No.
Dave DeCapp:Smart man. It's a smart man.
Chip Flory:You guys, this is the most unpredictable sit I mean, we knew that we were getting into a period of uncertainty when when we got into Trump 1 point o. We knew that. And I would like to think that because we've we've got experience with a president Trump that we would know a little bit more going into 2 point o, I don't feel that way at all.
Dave DeCapp:No. Ugh. Likewise. Different world. It's still a different world.
Dave DeCapp:Yeah.
Chip Flory:Yep. Mhmm.
Dave DeCapp:Chip, you know, another thing that comes to mind bringing it kinda home to us at FMH is, your thoughts on, the role crop insurance plays in, in everything we've really been talking about to this point.
Chip Flory:The the only thing that I was going to say on that is that's where every risk management plan should start is with the crop insurance. Period. End end of story. It's it's it's where it's gotta start. Awesome.
Dave DeCapp:Alright. Ken, any other
Ken Ripley:questions for mister Flory? I mean, we could go on and on and on, but I know Oh, yeah. We could take an
Dave DeCapp:hour here.
Ken Ripley:He's a very busy man, and we appreciate all his insights. So
Chip Flory:oh, you guys, I appreciate the conversation. You know that.
Dave DeCapp:For sure. And, speaking of which, well, first of all, thanks so much for coming on. Really appreciate appreciate your insight and everything that you do, and, and we've talked quite a bit about AGRITalk. But anything else that, you kinda wanna leave our listeners with as far as either ways to get a hold of you or ways to listen to you or ways to connect?
Chip Flory:You know, use that local farm radio station first and foremost, guys. But if you get if you can't find it on farm radio, we're on all of your favorite podcast platforms. Just search for agri talking and PM agri talking. And give us a listen if you have it. We'd sure appreciate it.
Dave DeCapp:Sounds good.
Chip Flory:Alright, guys.
Dave DeCapp:Excellent. Thanks, Chip. Really appreciate it.
Chip Flory:Thanks, Chip. Appreciate you guys. Thanks.
Dave DeCapp:Alright. Take care. Alright. Well, Ken, that, Barry informed me is it's so great to have Chip on. He's just the the fountain of information and and can really bring insight from any direction.
Dave DeCapp:Right? So that was, that that was really interesting. But so here's the $1,000,000 question. I'm very interested. You wear many hats, my friend.
Dave DeCapp:You wear a FMH hat. You wear a sales hat. And very importantly, you're, you wear your farm hat. Right? So I'm I'm really curious as to, some of your takeaways from, from that conversation.
Ken Ripley:You know, it was it was a blast. The thing that optimism, I loved hearing the optimism. You know, right now it's very easy to get down, especially with my farmer hat on because this next year break evens are are very difficult to find. So hearing his, you know, somewhat optimism on corn is exciting. Hopefully, that'll carry beans along even though he wasn't optimistic on beans and obviously wheat is kind of in the same boat as as beans.
Ken Ripley:But we he said we could get optimistic on wheat. Just what's gonna change to to, you know, get that, these other countries to grab on our wheat. But Right. So that was a big takeaway for me from that side. I did like, especially when we were talking about the farm bill there at the end.
Ken Ripley:And, you know, hey, if if this big package doesn't come through, you know, the farm bill becomes the easy. That's, you know, with Thune and and Boozman getting together and pushing that together as a package. That's really encouraging. Just just to know. I mean, that's what a lot of farmers want is, you know, what are the what are the what are the ground rules?
Ken Ripley:What what are the what's the safety net that's in place from from that side? And then, you know, come to the crop insurance side. We've got tools every year to help, you know, provide that critical safety net. But you know, what are the ones that help us when we're seeing really drastic drops? And that it'd just be nice to know what all those rules are for maybe the next 4 or 5 years versus the next year like it is this year right now.
Ken Ripley:We're dealing with just an extension. So, yeah. You know, I I appreciate the optimism on corn because I was looking for something optimistic. And Looking
Dave DeCapp:for something to hang your hat on.
Ken Ripley:Yeah. Yeah. You know, it's easy to get down in the dumps because, you know, being in Southern Minnesota, we didn't have a good crop, as many folks know, is one of the worst spots in the nation yield wise, so it's even more painful. But there's a lot of FSA checks coming the way it sounds. Yeah.
Dave DeCapp:Right. Yeah. I I I also thought the, the discussion around the farm bill was really interesting, and he's always got a unique take. You know, a lot of this, you can read, like, surface level in the art in some articles or some of the just the literature you read, but I like to get his take because, the there's there's always some nuance in there. It's like, okay.
Dave DeCapp:Well, you know, it keeps folks from being, well, it doesn't keep it from being cynical, but it allows you to have to your point up, you know, a path forward or something to look forward to, something to to kinda, look down the road at rather than just, you know, living in uncertainty. And it and it really helps with that, I think. And, seeing that laid out, for example, with the, you know, the big beautiful bill versus farm bill and when we look at it, That was, that was that was very interesting.
Ken Ripley:Yeah. Yeah. I I'm I'm hopeful that, you know, things that come in and congress can get their work done and not not have it be an ugly 2025, but we'll wait and see. Right? That's Well it's gonna be interesting.
Dave DeCapp:You you did notice he you weren't willing to put any money down
Ken Ripley:on when it when it was
Dave DeCapp:gonna pass. It will, and I'm fully confident of that as well. But, putting money on time frame is, is probably a smart bet not to take. Right.
Ken Ripley:Exactly. Exactly.
Dave DeCapp:So, boiling this down to, I mean, all of it impacts crop insurance risk management. Right? And and, matter of fact, it was off air, but, you know, when we were talking to Chip right after we closed up our conversation, you you know, that's one of the things he mentioned. He's like, you know, it all starts with the with the solid sound risk management program. And, you know, obviously, with you being a buyer and someone who facilitates the sale right through our independent agencies, You know, are there any things that, that you look at now with those different lenses that you, that you kinda see this with, that you're thinking about, both as a grower and as a, someone on the other side?
Ken Ripley:Yeah. You know, this this coming year, I mean, there's not a whole lot of changes in crop insurance, which is kinda nice. I mean, we've we've seems like every year we have a lot of big changes, but this year there's not. The one that we've talked about on some prior, podcasts, you know, the big one is obviously E C O.
Dave DeCapp:E C O.
Ken Ripley:With that big subsidy. You know, because when you look at dollars and looking at my breakevens on my farm, you know, crop insurance may not get there or it's gonna just barely get there. And, you know, and trying to to maximize that subsea dollar is always always the goal. Right? So, those packages where you can maybe add on some county plans to just to give that extra cushion with those higher triggers, I think is definitely has been on my radar and will definitely be on my radar for 2025.
Ken Ripley:Question is, do you go with the highest levels on the regular multi peril? Not that that it's probably gonna depend on what happens in February with price. You know, if if we can't hold the prices we're at right now, if if something does happen here at the end of the month in February where trends a little lower, it's gonna make some of those higher coverage levels a little harder by, just because they maybe aren't add as many dollars as we got in the past. I mean, there's a lot easier decision when we were dealing with $57 corn and your breakevens
Chip Flory:were
Ken Ripley:no problem. But now if you can't get to breakeven, do you take a little bit more self insurance, so to speak? And, you know, maybe, like in our case, I know not all states have the luxury of having lower rates on the higher the 80 and 80 fives. But in my case, an 85 and an 80, it may be the decision. Do we stay at an 85 or do I go back to an 80?
Ken Ripley:But, that that's gonna be the big decision, I think, for most producers. We'll wait and see what the February prices bring, but, definitely highly encouraged producers to take a look at EC O. With that increased subsidy to 65%. You know, you gotta look at that as a subsidized put, and that's the way you gotta think about it because, and it gives you yield protection right along with it. And the good news, you don't have to pay for it until the end of the year after you've taken the crap out.
Ken Ripley:So versus, you know, doing a hedge up front and having to fund that from the front side. So it's it's it's not gonna be as fun as it has been in the past. I won't lie, Dave, when we're just making those decisions. But the good news is, we still have great tools out there that we can customize to fit, you know, every producer's needs.
Dave DeCapp:Absolutely. And you brought up a a good question for me and something that we've talked about a couple times in the past, in just general conversation. But, you know, as you're talking about buying decisions as a customer, as a producer, and, you know, one of the things that is probably something that I know is something that some are considering is, well, do I just buy everything? Every single thing that's offered. Right?
Dave DeCapp:And not to say that's not the right decision. Right? It's all individual based. But, you know, what what are your thoughts on that? Because the buy everything thing is it's like, okay.
Dave DeCapp:Well, let me just buy everything as much protection as I can. And, you know, that doesn't seem like that's probably the right solution for everybody.
Ken Ripley:Yeah. Yeah. That you know, prior years with with more dollars to play with, that was an easy thing to do by everything. And in many cases, that worked out well for producers. Now, boy, it's it's hard to throw.
Ken Ripley:I mean, I I know growers that were spending $90 an acre on insurance in prior years. And Yeah. And if if it worked and it allowed you to be aggressive on your Ford marketing, probably worth it. If you were aggressive, but if you're buying that and you're not using it to do the Ford marketing to protect yourself, now we have these downturns. Boy, you just added, you know, maybe 30, $40 to your breakeven that maybe, you know, if the conditions stay flat, the, you know, if the yields are average and the price stays somewhat flat, it's not gonna bail you out with the claims.
Ken Ripley:So so, yeah, it you know, I think it's important to your to your to your question there. It's important to take a look. Know your breakevens. That's the big thing is, you know, spend time if you haven't. Producers need to know what their breakevens are.
Ken Ripley:And maybe crop insurance can't get there, but just make the decision on what package gets you the closest. And what can you, you know, can you stomach to self insure, so to speak, if if the insurance policy doesn't get to what you need. Because, let's say, I've been in farming since 2004 and this is probably gonna be I know this is gonna be one of the more challenging years from, profitability in my tenure. So I Yeah. I right decision.
Ken Ripley:And I'll be asking my agent Right. What should I do because I'm not I mean, it's easy me to tell somebody else what to do, but Right. When you're doing your own thing, it's sometimes hard to pull the trigger. But that, you know, I need to listen to myself and and do that. Have the breakevens and buy what I need.
Ken Ripley:Yep. Exactly.
Dave DeCapp:Yep. For sure. Well, a great discussion. Anything else come to mind that, either from Chip's conversation or that comes to mind just now?
Ken Ripley:Yeah. One of the things this would mention, you know, we talked a little bit about farm programs and stuff coming from FSA. So there's definitely several things that are coming. And, you know, don't forget about those because they're gonna be critical in some cash flows to producers for 2025. I mean, with the economic loss payment that's supposed to be coming here, I think that was flagged with either a 90 or a 120 day rollout from the from the signing of the bill.
Ken Ripley:And then we've got the ERP programs for 23 and 24. And then depending where you're at, like I say, in my county, there will be, ARC payments for 2024 because of the crop we had. Now I know areas that the yields are so good are probably not gonna have county arc payments. But there's potential to have, you know, 3 to 4, you know, 2 to 4 payments, depending on how your county lie, turned out for yields in 2024. And and then obviously 2023, if you had a rough year too, the ERP program will will be kicking in for that one.
Ken Ripley:So so that's something to keep in mind, as you're, you know, keep those on your radar as you're working on your on your cash flows.
Dave DeCapp:Good good stuff. I'd really appreciate that. So I I think, if you don't have anything else, any other thoughts come to mind?
Ken Ripley:No. I'm just give me the crystal ball on what I should when I should pull the trigger on sales here, Dave. That's all I'm looking for.
Dave DeCapp:Just keep that optimism, Ken. You'll be you'll be just fine. Right? But, so okay. I I I think we'll just, we'll call it good there.
Dave DeCapp:We'll wrap up, and I, I just wanna thank Chip Florrie again for joining us. Thank you, Ken. Always a great conversation. Love to get your perspective on things, and, I wanna thank everybody, watching or listening. Really appreciate, you taking some time to listen to FMH InsureCast, and, make sure to check out the next InsureCast on, any of the places you find podcast subscriptions or YouTube.
Dave DeCapp:So we will see everybody soon, and thank you.
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