Crop insurance is an important risk management tool for California farmers. California Ag Today recently spoke with Mickey Paggi about the topic. He’s an agriculture policy analyst for National Crop Insurance Services, a nonprofit trade association based in Kansas.
There are certain deadlines for getting enrolled in the programs.
“The force of the crop insurance agents that are on the ground in the areas where these crops are grown is really valuable, and they can work individually with the producer to make them aware of what they have to do when they have to do it,” Paggi said.
These agents work with the farmers and available programs to find the best fit for their operation. They cover northern, central, and southern California.
Paggi said that a good place to start if you’re looking for more information about crop insurance is the USDA Risk Management Agency. The RMA looks to increase the availability and effectiveness of federal crop insurance, which is to be used as a risk management tool.
“RMA’s vision is to secure the future of agriculture by providing world-class management tools to rural America. This website can be found at rma.udsa.gov,” he said.
“I would start … with the USDA RMA website because it actually has a link to the individual commodity coverage, and within those fact sheets, they actually have a listing of crop insurance agents within your commodity,” Paggi explained.
Calcot Ltd. Chairman Talks California Cotton at 89th Annual Meeting
By Patrick Cavanaugh, Farm News Director
Calcot Ltd., a democratically-run cotton marketing cooperative owned by 1,200 select cotton growers in California, Arizona, New Mexico and Texas, held its 89th Annual Meeting in Tempe, Arizona, this week.
Gregory Wuertz, chairman of Calcot and an Arizona cotton grower, said, “The cooperative started in 1927, and it is just amazing to me that we will reach 70 million bales sometime this year.”
“That’s a lot of cotton if you think about it,” Wuertz said. “And it has a great effect on all the growers. A lot of money has been run through the organization, and we are still doing it.”
Wuertz said Calcot directors are in the field across the western cotton belt, interacting with the industry.
“We have Calcot personnel in each cotton region who are also out in the fields talking to people and bringing up questions. They just don’t stay in their office. We try to get great members, and we work really closely with gin managers and their staff. We want to be on a first-name basis,” he said.
Wuertz noted, “You have to love the lifestyle of cotton production. You get attached to the crop. You plant it in March and harvest it in November. It’s a long-term thing.”
Yet, Wuertz acknowledged, “There are ups and downs. There always are. There is always a new catastrophe because you deal with the weather and the water issues. I think you just build up a little bit of a strength and have tougher skin than maybe some growers have with other commodities.”
Many Calcot growers outside of California are in awe of California producers.
“California has a lot more regulations,” Wuertz said. “They’re blessed with a really nice climate—just a perfect area. Our climate is a little harsher, but California people work with air quality, labor laws, and their water issues. They have to have a real sharp pencil to make all that work.”
However, Wertz says, California growers always enjoy a better per-pound price for their cotton.
“I think over the years they have developed markets, and because of their climate, they do grow a real [high] quality crop that just demands a higher price. Everybody says there’s no difference, but there is some kind of difference that is just a little better,” he said.
Wuertz explained that the Calcot cooperative is good for growers when it comes to the prices they receive.
“It is the classic cooperative idea,” he said. “It is too risky to try and peak these cotton markets. It is risky to just hold all your cotton and try to peak it at one time.”
“You have to be conservative,” he continued. “Like cotton growers are — very conservative. So you sell some and hold some and seek financing from banks for the short term. We have good tight covenants with the bank, and that’s part of our risk-management policy. We don’t want to speculate, so that is why we sell throughout the year, and we try and watch all those things.”
“We have a very strong relationship with mills and we can sell directly to them, which I think demands more of a premium for Calcot growers,” Wuertz said. “And while most cotton-spinning mills are offshore, we still have a good chunk of cotton going to some very good domestic mills, where they turn out top of the line sheets and higher-count shirts.”
“The impetus of our program,” said Christine McMorrow, director of development for Land-Based Learning, “is the need for more farmers as the current ones age out. According to the USDA, over 700,000 new farmers will be needed in the next 20 years to replace those who retire.
CFA teachers, farmers, academic faculty and staff, and agricultural, natural resource and business professionals, teach CFA students basic production agricultural practices; crop planning; soil science; pest management; organic agriculture; irrigation and water management; marketing; ecology and conservation; obtaining loans, insurance and permits; farm financials; human resource management; risk management; farm safety; regulatory compliance and problem-solving.
McMorrow stated, “These folks have been with us since February, following a rigorous application process. A lot of these folks either have land they have dreamed of farming but did not know how to put it into production. Some of them come from farming families, but they wanted to get involved in the family business on their own. They may have been in a different career and now want to do something new or different. Perhaps they haven’t studied agriculture or they have not seen much agriculture other than what their family does, so this is an opportunity for them to learn and to explore a new business idea.
“We only take people who are serious about production agriculture. This is not a program for somebody who thinks, ‘I’ve got an acre in my backyard and I really want to grow something.’ While that’s a cool thing to do, the academy is not for those people.”
“Our graduating farmers, who range in age from their late 20s to early 50s, each wrote a business plan and presented it to folks within the agriculture industry,” said McMorrow. “They also planted some of their own crops on a farm in Winters.
McMorrow elaborated, “These new farmers have been able to create their own networks, having made contact with more than 40 different folks within the agricultural industry throughout the time they spent with us. These networks include local farmers around Yolo County, Solano County, Sacramento County, and other regions, and will help our graduates realize their dreams.”
“This is the fifth class that has graduated,” explained McMorrow, “and mind you, these folks are doing lots of different things. Some of them already have their own land, some are going to work for someone who has land, some will work other farmers, and some will go into a food-related business.”
“Still others will stay and lease small plots of land from us,” McMorrow commented, “to start their own farming business. Beginning farmers face huge barriers to getting started, the biggest of which is access to land, capital and infrastructure. So, to get their farming businesses started, California Farm Academy alumni are eligible to lease land at sites in West Sacramento, Davis and Winters at a very low cost.”