Wheat safety net: too many holes

Wheat farmers are concerned that their primary safety net, erected to prevent catastrophic crop loss, may have a gaping hole or two that could permit farmers to slip through.

“Crop insurance is the top issue for wheat growers,” says David Moore, a Dumas, Texas wheat, corn and cotton producer and president of the Texas Wheat Producers Association.

Dumas discussed the problem recently during the Texas Commodity Symposium, held annually in conjunction with the Amarillo Farm Show.

“The main weakness in crop insurance is that we can't afford adequate coverage,” Moore said. “We can justify premiums for 65 percent coverage, but that means a farmer takes a 35 percent loss before insurance kicks in. When we have three straight years of losses, we're looking at a 105 percent income reduction. That hurts.”

Moore said farmers need affordable insurance for 85 percent to 90 percent of projected yield. “But cost is prohibitive.”

He also said that consecutive losses decreases coverage level. “In much of the state, we've had two or three years of poor yields and that brings our yield guarantee down. We need a floor to keep minimum guarantees at a reasonable level.”

Moore also would like to see some form of farm savings account that would work similar to Individual Retirement Accounts. “In good years, we could put money into the accounts, tax free. When we withdraw funds, in bad years to stay in business, we'd pay the taxes.”

He said a recent decline in the value of the dollar helped move some U.S. wheat into the export market. He said export commitments remain crucial. “We produce much more wheat than we can use domestically. Trade is a big issue.”

Moore said Texas producers need continuing research to identify the best varieties and production practices to keep wheat profitable. “We're primarily a hard red winter wheat state, but we have significant acreage, mostly in East Texas, where they grow soft red winter wheat. Environmental conditions are different so we need data for both regions. We work with the wheat research advisory board from Texas A&M to develop a good balance of research priorities.”

Sponsors for the annual Texas Commodities Conference include: the Texas Wheat Producers Association, the Texas Gains Sorghum Association, the Corn Producers Association of Texas and Plans Cotton Growers, Inc.

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