Weathering the Storm: The Significance of Crop Insurance Explained by Hunter Bray

[00:00:08.490] - Chris Griffin

Welcome to Back To Your Roots, a podcast that provides insight into all things farming, financing and farm life, guiding you back to your roots.

[00:00:17.980] - Chris Griffin

Thanks for joining us again on Back to Your Roots. I'm your host, Chris Griffin.

[00:00:21.660] - Jordan Turnage

Hey guys, thanks for listening to us again. This is your other host, Jordan Turnage, and we are happy to have the Hunter Bray come in here and sit with us this afternoon. Hunter, just kind of a little bit of a background on you real quick and then you can fill in the blanks on the rest of it just for our listeners out there. Hunter is a crop insurance agent that works with us here at River Valley AG Credit. He works in our Kevl office, he works in our Murray office and in the next couple of years looking to be in charge of all of our river counties. So Hunter, thanks for coming in, appreciate your time.

[00:00:51.010] - Hunter Bray

Yeah, thanks for having me guys. Happy to be here. A little bit about myself. My name is Hunter Bray. I am from the small town of Barlow in Ballard County. Grew up about 5 miles apart from my family. Grew up duck hunting and working on duck blinds, planting corn every year for duck hunting and playing football through school. After graduating in 2019 from Ballard Memorial, I went on to Murray State University where I got my degree in Agriculture Agronomy. While there I joined the fraternity Alpha Gamma Row. Like my fellow brother Jordan here.

[00:01:27.040] - Jordan Turnage

Yes, sir.

[00:01:27.770] - Hunter Bray

I was able to make a lot of connections in the AG industry that way. My second semester at college, I interned as a credit intern here at River Valley and just enjoyed it so much they asked me to come back part time, so I worked part-time.

[00:01:42.740] - Jordan Turnage

 So they just partly liked you.

[00:01:44.180] - Hunter Bray

They just part they weren't going to fully they didn't full time like me, they partly liked me. So I came back on to help part-time with crop insurance up until this last December of 22 where I came on full-time and I've been the crop insurance agent all this year. And then most recently I was able to marry my longtime girlfriend Maddie Williams and we now reside in West Paducah. As far as crop insurance agent work here at River Valley, my main job is to work with our insureds to help them make the best decisions possible based on their yearly operations and to work to keep them happy and to add more insured in the future.

[00:02:29.630] - Jordan Turnage

You kind of really had a trial by fire this year with the way the crops have had to deal with lack of water and then too much of it all at the same time. It's been a real learning experience for you I would guess.

[00:02:41.750] - Hunter Bray

Trial by fire, to say the least. I like to look at it as beneficial. First year, having a lot of opportunity to work with a lot of different folks on potential claims. Luckily, it's turning out to be a decent year so far. But like you said, we had an early drought and that caused some pollination issues and some corn, and then we got hit with a massive wild flood right in the middle of the summer.

[00:03:09.840] - Jordan Turnage

24 hours get 2ft of water.

[00:03:12.480] - Hunter Bray

Yeah, about a foot in a day there. So that kept some beans underwater, and for the most part, everything's pulled through except some stuff that was maybe in some bottom ground and creeks flooded. And if that water can get off quick enough, it'll be all right. But some of it set underwater for a couple of days at a time, and it's not really making what they want it to, but that's what the crop insurance is for. Those you don't want to have to use it, but it's there in case you need it.

[00:03:38.870] - Chris Griffin

Well, that kind of leads into a little bit of what I was going to ask is kind of maybe for somebody who doesn't really know anything about crop insurance or anything about ag, exactly what is crop insurance and what are those specific benefits that farmers get from that?

[00:03:55.040] - Hunter Bray

So crop insurance is a pretty specific thing based on each farmer's operation. You have two main types of crop insurance. You have your MPCI, which is multi peril crop insurance, and then you have crop hail. MPCI is the more popular option. That's what at least 98% of our policies are. It is federally subsidized. So the government subsidizes around 65% of total premiums based off of certain coverage levels. Those base coverage levels go from anywhere from 50% up to 85%. And then there's add ons that you can get, if you need to insure above 85. Most producers, I would say, choose between 70% to 80%, right in that 75 range. When it comes to multi-pareable crop insurance, it is based off of your farm's history and your yield. So you have what we call APH, which is the actual production history, and that is what is used to calculate your insurance guarantee. So the average history of each of your farms is multiplied by whatever coverage level you select.

[00:05:02.590] - Chris Griffin

Okay.

[00:05:03.380] - Hunter Bray

And that gives you what we call the trigger yield. And that trigger yield is the average yield that you need to hit to start getting indemnity payments from insurance. So when you multiply what your trigger is by the number of acres, that gives you your total production guarantee. From there, we have the different options. As far as policies go, is yield protection and revenue protection. Yield protection, just like it says, protects against loss in yield, loss in production, while revenue protection, which is the more popular choice, also protects against production loss, but it also protects against revenue loss. You have your projected price at the beginning of the crop year. You have your harvest price at harvest time. If that price drops, that brings your trigger up, and you have the potential to have a higher trigger, higher potential for loss. So, like I said, those projected prices set at the beginning of each year for spring crop, it's normally in February and then harvest time. October is the month that the harvest price kind of wanders. And then right there at the beginning of November, it sets. So, for example, this year yields have turned out to be pretty good.

[00:06:20.270] - Hunter Bray

But for everybody that has revenue protection, the prices set down almost a dollar on corn and beans. And so that raised, if you have a higher coverage level, then you need to be paying attention to, even though you maybe didn't have a big yield loss, you might still get an indemnity payment based off of your higher trigger with the prices being down.

[00:06:41.630] - Jordan Turnage

Your commodity price.

[00:06:43.140] - Chris Griffin

So when you said that earlier about the history, if it's maybe somebody who's just recently bought land or maybe just recently got into farming, is their yearly premium going to be more expensive because they're a higher risk borrower because they don't have that history? Or is that kind of...

[00:07:01.030] - Hunter Bray

No. So the way that works is each year, if you buy a new farm, for example, you've never farmed it. That would be put into the system as added land.

[00:07:09.480] - Chris Griffin

Okay.

[00:07:09.770] - Hunter Bray

You get what's called the T yield. And the T yield is each county has their own average yield. So for most counties, like, let's use Callaway, for example, corn, it's 150. That's what you get. It's just an average for the county. And so basically, the system will hold the last ten years of history on that property.

[00:07:29.780] - Chris Griffin

Okay.

[00:07:30.300] - Hunter Bray

The last four years are what really matter for you, because for the example that you just added, this ground, you'll have that tea yield placeholder. So you'll have 150 for the last four years. Four years, yeah. So after you produce the crop for one year, you'll get 65% of the t yield.

[00:07:49.940] - Jordan Turnage

150.

[00:07:50.790] - Hunter Bray

Yeah. And you have to build up to four years. And after those four years, you can start using your own history that you've created on the farm.

[00:07:58.320] - Chris Griffin

So similar, we use that yield a lot of times when we're doing projections for the upcoming year, we use those same county yields and kind of just see how many acres are they planting and kind of project, what their income is going to be for the year and what that's going to produce, which run.

[00:08:11.390] - Jordan Turnage

On a more conservative side. Let's take the good and the bad as far as the averages all go together on it. And then for years, I wouldn't say and you're the insurance guy on this, I don't think we were quite in that bad threshold, as bad as we could have been historically. I know corn acres aren't quite where we wanted them to be, but I don't think we're like losing our hat or anything like that this year, especially in comparison to like 2012.

[00:08:39.640] - Chris Griffin

Yeah, I think it could have been a lot worse.

[00:08:43.510] - Hunter Bray

You can look at it this way, there's a good and a bad side to it. Yes, we had an early drought and yes, we had a flood, but it's kind of worked out at this point to where they were very timely and they almost contradicted each other to where I haven't had a lot of production turned in yet, but I've had a couple and those corn yields have turned out pretty good. I mean, I'm not going to name names, but people have been from the 180 range to up in the 200s for averages.

[00:09:11.390] - Jordan Turnage

And the fun thing about this year with the pollination issues that we saw with the corn, a lot of guys will show me pictures of ears that they pulled out in the field. And you'd have a good, solid, good, solid extended ear out there, filled out end to end, and you go over three or four to five rows, and you pull an ear out there and it's just got nubs on it. So these guys really didn't know what to expect.

[00:09:34.940] - Hunter Bray

Right? Well, and it's unpredictable, it's hard to tell. And there's some cases where farmers are pulling nice sized ears off of a bad stalk. I mean, it looks bad from the road when you're going by, but the ears are turning out. And like I said, there's going to be some people that produce an average. But average is okay on a year like this. I mean, you can't ask for anything better with the unpredictable weather patterns and if you go any lower, that's what the insurance is for. So that's why it's important to have.

[00:10:06.130] - Jordan Turnage

Who do we go through as far as our insurance company who covers our crop insurance for River Valley AgCredit?

[00:10:14.130] - Hunter Bray

So we've used RCIs in the past, but now we are fully with Rain and Hail, which is the leading crop insurance provider out there. And in my experience, I've really enjoyed working with them. All the underwriters and marketing supervisors out there been a big asset to me. And I have to shout out my guy, Zach Alexander. He's my Southern Division Supervisor. He's been a very helpful resource here in my first year, helping me navigate crop insurance world and helping me when I have questions on how to help the insured. He's always just a phone call away and they say as far as crop insurance and probably insurance in general, it might take a few years to really get a full handle on it. And he's helped me get way more experience than I could get what seems like in three years in this first year.

[00:11:06.610] - Jordan Turnage

Because you had to hit the ground running.

[00:11:08.730] - Hunter Bray

Yeah, I mean.

[00:11:09.500] - Jordan Turnage

Once we got you in full-time.

[00:11:11.750] - Chris Griffin

Luckily you had that experience as an intern too, and then also part-time, so then you kind of had that under your belt was a huge benefit.

[00:11:21.110] - Hunter Bray

Yeah. Helping our past agents part-time has definitely been beneficial, especially with meeting the farmers that we serve, building a relationship with them. But I took over full time about a week before the sales closing date this year, which is the beginning of the busiest season for us. So it was truly hit the ground running.

[00:11:40.030] - Chris Griffin

I remember those days when you were in your office and you didn't come out for a whole lot.

[00:11:43.880] - Hunter Bray

Yeah, well, you're making phone calls.

[00:11:44.450] - Chris Griffin

Looking a little stressed.

[00:11:47.410] - Chris Griffin

You don't see Hunter stress very often, but he looked a little stressed.

[00:11:49.980] - Hunter Bray

Well, it's important.

[00:11:50.660] - Chris Griffin

I know you had a lot on your plate.

[00:11:52.360] - Hunter Bray

Yeah, well, it's important to call the insured and let them know there's still somebody here to help them and everything's going to be all right.

[00:11:57.640] - Jordan Turnage

In transition and just being transparent with folks. Not that I was eavesdropping, but I couldn't help on some of the catch, some of the talking points on phone calls that you had with guys, you didn't just hit them with filler, make them feel better. You told them yes and no questions on stuff. And you told them, I'm not real sure, but we will get the answer to this stuff.

[00:12:20.410] - Chris Griffin

People respect that. If you don't know the answer, then I don't know and then I'll find out.

[00:12:27.340] - Hunter Bray

Well, I just feel that that's the best policy. And if I'm open with my insured, they'll be open with me, and we can build a better relationship than getting into line to each other, and then it's not good for anybody.

[00:12:38.340] - Jordan Turnage

So you're saying honesty could be the best insurance policy?

[00:12:43.250] - Hunter Bray

I would say that's right.

[00:12:44.470] - Chris Griffin

Our podcast is never going to go by without one really bad dad joke. He'll drop it every time he can pull it out of a hat. So the next question we were going to ask, and this is probably good coming from a guy who's got probably the least amount of ag experience in this room, but when you talk about crop insurance, can you use that on any kind of crop? Can you kind of talk about that? I mean, obviously you got the regulars that are in our area, but kind of explain kind of what else that can possibly cover.

[00:13:13.970] - Hunter Bray

Yeah. So crop insurance is provided on almost any crop that is grown. A lot of that's going to depend on the region of the United States. They got peanut crop insurance in places, bananas, they cover everything. But of course, in our area, the main crops are corn, soybeans, wheat, tobacco. But each county has its own actuarial listing. Those can be found online and that will tell you how the crops can be insured for that county and which crops are available. It kind of is the guideline for, in some cases, written agreements that's currently something I'm working on right now can be done where if a certain crop can't be grown in a certain county or if there's unrated land, or high risk land. I just have to work with the Risk Management Agency and there's certain documents that can be put together to be able to get that crop insured on that ground. So there's workarounds to it as long as you do it the right way. But pretty much any crop can be covered one way or another.

[00:14:14.560] - Chris Griffin

Now this may be a silly question too, and this is me not having a lot of background. I know you're saying crop insurance. What about livestock? Is there insurance for livestock? Is that something that people would look into?

[00:14:26.870] - Hunter Bray

There is.

[00:14:27.900] - Chris Griffin

Does that fall under your realm or that would be something else.

[00:14:31.750] - Hunter Bray

That does fall under my realm. River Valley doesn't really have much of a history with it. We are capable of doing it, and I hope to maybe not this year, but I hope to in the future talk to some people around here about it. There's pasture rangeland and forage.

[00:14:44.750] - Chris Griffin

Okay.

[00:14:45.500] - Hunter Bray

There's different options for it. A popular one would be like covering for a certain lack of precipitation to cover for hay cost and things like that to feed your livestock.

[00:14:56.930] - Chris Griffin

Okay.

[00:14:57.360] - Hunter Bray

That is something I hope to stretch into in the future. So there's options out there.

[00:15:01.490] - Chris Griffin

That's perfect answer. I was just curious about that.

[00:15:04.770] - Jordan Turnage

So can anyone come up to you and just get crop insurance or what all do they need to know as far as coming to you beforehand?

[00:15:15.610] - Hunter Bray

Right. So pretty much anybody is eligible as long as they produce acreage or have a share in it. I mean, we have plenty of landlord policies. You don't have to be as long as they have a share, they can also carry insurance on that ground. And just like with loans, there's beginning farmer programs that are available to help young farmers. And pretty much anybody that produces or has a part in farming has options to get crop insurance.

[00:15:50.780] - Jordan Turnage

Do they have to be a member of River Valley AgCredit?

[00:15:54.130] - Hunter Bray

That's a good question. They do not. We have some that are members. I see them come in the office all the time just as a borrower, but we have plenty of insured that don't have any other affiliation with River Valley, so you do not have to be a member.

[00:16:08.330] - Chris Griffin

Okay, that makes sense.

[00:16:09.610] - Jordan Turnage

And as far as, like, your area currently, I know I kind of touched on it at the beginning of it for your intro, but can you kind of elaborate more into detail as far as what your service area is currently?

[00:16:21.370] - Hunter Bray

Yeah. So currently, I service insurance in Calloway County, Graves County, Marshall County, McCracken and then parts of Henry, Tennessee. Most of our insurance is in the Calloway, Marshall, and Graves area. In the future, I hope to be able to expand that a little bit, maybe come into the river counties where I'm from and know a lot of know. So that is in the plans for the future, but we'll see when we get there. But as of now, those are the areas I cover.

[00:16:54.130] - Chris Griffin

I know you mentioned a couple of things about dates and kind of when you originally started, but what are those important dates with crop insurance? And just so maybe those farmers out there kind of keep those on their calendar and make sure that they're getting you what you need, right?

[00:17:07.340] - Hunter Bray

So crop insurance is heavily based on deadlines. Basically, everything I do is on a deadline. So a couple of the main ones are for spring crops such as corn and soybeans. You have the March 15 deadline, that's what we call the sales closing date. That is the last day you have to sign up for a policy and crop, and then for fall, such as winter wheat, that deadline is September 30. So those are the main deadlines as far as signing up for crop insurance. But then once you have crop insurance, there's plenty of other deadlines that I have to reach out to folks for as far as reporting your production on those crops, acreage reporting, it's a cycle, basically, is what it is. But those main two deadlines are March 15th and September 30th.

[00:17:53.680] - Jordan Turnage

What would be some good tips for our borrowers out there listening to this podcast? That would be good ideas for them to kind of help you in your process, speed things up to make sure that deadline is met.

[00:18:05.610] - Hunter Bray

My main tip would be to keep your insurance in mind and after your crop year is over and you've got your production in and you've seen what you've made, if you need to make any changes to your policy or you think you need to add a policy, reach out as soon as possible. That way we have time to discuss what works best for you. Because like I said, it's based off of each farmer individually, and what works for one guy down the road might not work for another. It's important to make sure that you're paying for what works best for you and your farming operation. So just reach out as soon as possible for these deadlines. Don't wait till the last minute. We're all guilty of it, but the more time we have, the better we'll be able to service you.

[00:18:48.660] - Chris Griffin

You were talking about fit for farmers. I know some of our loan payments, you can do a quarterly, semi-annual, annual, or monthly, is that similar for the annual premium for the insurance? Do they pay that all at one time? Can they split that up?

[00:19:01.840] - Hunter Bray

So there's deadlines on that as well. So for spring crop, your sales closing dates, March 15th, you'll report your acres to FSA and to me in July, and then that bill is sent out in August, August 15th. Okay.

[00:19:20.770] - Chris Griffin

On my birthday.

[00:19:21.790] - Hunter Bray

This year, this year is a little different. Because there's an emergency relief program going on that delays interest. But normally in a normal crop year, you have a month from that bill going out to pay that original premium.

[00:19:38.590] - Chris Griffin

To pay that amount.

[00:19:39.440] - Hunter Bray

After that month is up, a small, like 1% interest will accrue every month that you don't pay.

[00:19:45.560] - Chris Griffin

Okay.

[00:19:46.040] - Hunter Bray

Which doesn't add up to a lot at first, but eventually it can if you don't get it paid. And it's a similar thing with your winter weed or your fall crop. So there's a deadline, it's best to pay it soon, but some guys wait on their crop checks and they wait till later in the year, and you can pay it as soon or as late as you want until that next deadline. So you want to make sure it's paid before that next sales closing date or your crop contract could be canceled.

[00:20:15.880] - Chris Griffin

So I got you. Okay.

[00:20:18.630] - Jordan Turnage

So kind of elaborating on that and kind of we've got a lot of detail on that and that was really informative. Could you just kind of tell us when somebody comes in how they go about getting crop insurance?

[00:20:34.970] - Hunter Bray

Right, so if someone wants to come and get crop insurance, you would first reach out to your local agent. And of course I would be happy to help anybody that needs any assistance and have a basic idea of your acreage. You don't have to bring all that in when you come, but kind of know how many farms you have and what you would be willing to spend on your crop insurance. And that way I'm able to run you a quote. We can look at different coverage levels and what would work best for you and just have an idea of what you're wanting to spend and how many acres you're wanting to insure, which if you have a multi-peril policy, you have to insure. That's a big difference. I hadn't talked about that yet. That's a big difference in your multi-peril and your crop hail is if you have multi-peril, you have to insure all of that crop in the county and it's by farm. Now, if you have crop hail, which is not as widely used, you're insuring more of a specific amount of acres. So you can insure on an acre by acre basis and you can do more specific types of insurance, like not to name names,

[00:21:39.800] - Hunter Bray

but this fall I created a crop hill policy for tobacco barn fire for a guy in Marshall County, and that's by an acre basis. So however many acres he wanted to insure and put in the barn is how his insurance was. So, okay.

[00:21:57.590] - Jordan Turnage

What's the number one question you get?

[00:22:01.190] - Hunter Bray

I would say it's probably about premiums. I mean, the number one question I get about premiums is how much is my bill going to be this year? And that's pretty specific to each farmer. It's hard to say ahead of time until I get your acreage but the FCIC, which is the Federal Crop Insurance Corporation, they set premium rates each year. And this allows me to run a generic quote for farmers, showing them different coverage level options and how much coverage they want to receive for a certain price, the projected price. And like I said, it's depending on each farmer. If you have history on that farm, I can run a quote based off of what the acres you had last year or if it's a new farm or a new farmer. I can run you a generic quote and just let you see what the premium per acre is going to be based off of how many acres you have or what coverage level you'd like to select.

[00:22:57.930] - Chris Griffin

So it's almost like some of my home loans you pre-qualify somebody. You don't really know what their credit is or anything, but you're just kind of giving them an idea of, hey, it's about how much you can afford. And this is what their rate is going to be.

[00:23:06.800] - Hunter Bray

Just a good way to get started.

[00:23:07.310] - Chris Griffin

You're going to have to dive deeper eventually. But you can at least give them a general idea of how much it's going to cost.

[00:23:14.110] - Hunter Bray

Generic quotes are helpful in that way to just kind of get things rolling.

[00:23:17.290] - Chris Griffin

Okay, I got you.

[00:23:18.770] - Jordan Turnage

Well, Hunter, I feel like you knocked it out of the park.

[00:23:23.000] - Chris Griffin

I think you did a great job.

[00:23:24.050] - Hunter Bray

I appreciate it.

[00:23:24.840] - Jordan Turnage

I know we really appreciate the time coming in here and doing this. Hope to see you learn and grow as time progresses and hope to have you back in here again real soon.

[00:23:37.570] - Hunter Bray

Well, I appreciate you guys for having me. It's been fun. I'm glad we got to talk about crop insurance for a little bit. And for anybody that needs to reach out to me about any crop insurance needs, you can get a hold of me at 270-206-2971. Thank you, guys.

[00:23:52.140] - Chris Griffin

And give him a call because seriously, he's a great guy and I'm backing up what Jordan said. He's a man of his word. He's a good guy. He's a hard worker and hope he's at River Valley for a long time.

[00:24:05.260] - Jordan Turnage

Well, guys and gals, thanks for listening and we look forward to seeing you back here on Back To Your Roots.

[00:24:10.200] - Chris Griffin

Thanks for tuning in to Back To Your Roots, where we dish the dirt on all things ag. Be sure to never miss an episode by following and subscribing while there. Leave us a review about what you want to hear next. Stay in the know between episodes by following us on Facebook, Instagram, Twitter, LinkedIn, and TikTok. For more resources, go to our website at rivervalleyagcredit.com.