This year’s end of the growing season has many McLennan County farmers looking to their crop insurance instead of the grain markets for financial support.

Corn — the county’s biggest crop — took a licking, farmers said. Wet weather in February and March led to a late planting that caused the fields to be exposed to higher than normal late summer temperatures. There also was a dry spell in the middle of the season.

The result was corn with poor ears and corn laced with aflatoxin, a substance that appears on stressed corn crops.

Erratic weather, along with cases of aflatoxin contamination, played havoc with the crops of some area farmers during the 2010 growing season. High heat resulted in underdeveloped ears of feed corn.
Jerry Larson/Waco Tribune-Herald, file

Aflatoxin contamination is known to cause liver cancer in humans, so corn harvests are extensively tested to make sure it does not make it into food products at dangerous levels.

Although some farmers were successful, many have crops that were negatively affected by the weather.

Some were able to chop up their crops into silage to be fed to cattle. For others with high concentrations of aflatoxin, the only thing that could be done was to plow it under because it couldn’t be used for anything, some farmers have said.

“Crop insurance is going to be a big factor, at least in western McLennan County,” said farmer Rodney Schmalriede, who will be among those using his insurance.

Schmalriede has 1,800 acres. He had about 600 acres in corn and 500 acres in milo this year. Wheat made up the rest.

Schmalriede’s corn crop was poor and milo was weak, too, he said. Wheat was strong, but it was already sold when prices were low, making it of little help, he said.

Farmer Jerry Niemeier has 8,000 acres on tracts in McLennan, Bell, and Coryell counties. He put in 4,400 acres of corn and plowed under 3,400 acres because of aflatoxin contamination.

Aflatoxin is measured on a parts per billion scale in tests. If the level in the grain exceeds 20 ppb, it cannot be sold for human consumption, but may sold for animal feed at as much as 300 ppb.

Crop insurance is federally subsidized. Premiums cover loss payments and the federal government takes care of the administrative costs of insurance companies, said Michelle Bouchard, a spokeswoman with the U.S. Department of Agriculture’s Risk Management Agency.

A 15-year history of Texas crop insurance shows that last year was hard on many farmers, with $823,283,485 in insurance payments coming to them for 2009.

McClennan County farmer Ronald Schmalriede will be using his crop insurance this year. His spread covers 1,800 acres, of which he planted 600 acres in corn.
Jerry Larson/Waco Tribune-Herald, file

The least amount for the period was 1997, when Texas farmers received $141,808,396.

With farming being a high-risk business, most farmers purchase insurance but the premiums are steep. Niemeier said a typical premium in McLennan County runs between $10 and $20 per acre.

There are 16 companies dealing in crop insurance. By buying the insurance, the farmer gets two benefits, said Steve Rutledge, president and chief executive officer of Farmers Mutual Hail Insurance.

They get protection from monetary losses from weather damage and other problems, and they can better market their expected crop because they know that they are covered if something goes wrong, Rutledge said.

When crop losses happen, farmers aren’t off the financial hook because they have purchased crop insurance.

How much the companies pay depends on what the adjustors think the real crop loss is, he said.

How much the farmer can cover is determined by the annual yield averaged during the last 10 years, Schmalriede said.

The insurance will never cover the entire loss, either. Crop losses can only be covered to a maximum of 75 percent of the average yield, said Glen Jones, director of research, education and policy development for the Texas Farm Bureau.

In McLennan County, where aflatoxin is a leading issue, it will be a more, complex issue for insurance matters than hail, flooding or other claims.

Rutledge said aflatoxin is hard to nail down in terms of its severity in some crops.

“The difficulty is in measuring the amount of damage to the crop,” he said.

A wet March forced one McGregor farmer to cut a gash into a field to aid in the drainage of stagnant water.
Jerry Larson/Waco Tribune-Herald, file

Tim Herrman, the Texas state chemist, said the problem is that aflatoxin varies in concentration throughout the harvest and can be different even on different kernels of corn.

Measurements are done on a parts-per-billion scale, he said, and when dealing with tiny numbers on such a scale, large margins of error are possible.

Because of the uncertainty of the extent of contamination, different insurance companies handle aflatoxin in different ways than if it were a straightforward hail or drought claim, Jones said.

In some cases, farmers get less than what they expect because of inconsistency in test results or the rules of different insurance policies, he said.

bteeter@wacotrib.com

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