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Just Your Standard Bull...

published: January 10th 2020
by: Michael Sturgess

And the winners are?
    The early days if January are made to close out the past year and get things rolling for the new year. As you might guess, we’ve been pretty busy getting ready for the San Antonio All Breed Sale coming up on February 12th. We have seen all the cattle now, and this year’s offering promises to be among the best ever. You will be seeing lots of advertising on the sale in the upcoming issues, including the special section in our January 24th San Antonio Stock Special Edition. So, stay tuned!
    On the “closing out” side of things, the end of the November-December interval marks the end of the 2019 PRF Rainfall Index policy. And while it won’t officially report until mid to late February, our data shows that this year’s November-December will show to be very dry for the big majority of Texas. With the exception of an area in North Texas, running from Guthrie, stretching eastward to Sherman, the remaining rangeland in the state experienced below normal rainfall—some even severely low. In in areas of Southeast Texas, where they witnessed record high rainfall in September, they are reporting as low as 27% of normal rain for November-December.
    Some other areas of the state enjoyed mostly decent weather through most of the year yet began to encounter drier conditions within at least the last 3 months. I report all of this just to say that I cannot think of an area of the state that lost money on their policy. Furthermore, there are large areas of the state that will receive the most indemnities on their policies since the 2011 drought.
So. Back to my original question. And the winners are?
    The winners are those who are patient and stay the course. In the fall of 2018, no one could have predicted that 2019 would be as dry as it was for many in the state. Forecasts do help but are clearly not the only indicator of whether to insure. The real winners are those that stay in the game. Yes—you will pay some premiums in some years. Yes—there will be years where you pay all your premium in September, only to get all of it back later in the year. And yes—statistics even show that 4 or 5 years in 70—you may even owe the full premium. EVEN SO. Statistics also show that due to the subsidies involved that over any ten-year period you choose, you will net more overall indemnities than what you will ever pay in for premiums.
    As an agent involved with this product since it began in 2008, I can tell you that the Risk Management Agency (RMA), or that part of the USDA that manages our nation’s crop insurance, is begging you to get involved with this product. Why? Because it is an effective vehicle of distribution, providing assistance to ranchers across the country. However, what makes it even more effective? Having more producers involved. You have until November 15th to sign up for 2021. Ask questions. Arm yourself with knowledge.
    Livestock producers face more than their fair share of risk in nearly every facet of their program. Yet, to many, the risk of paying insurance premiums for drought insurance scare them more than a market crash. The reason? Well, it can’t be because you are averse to risk!
    Ask questions. Arm yourself with knowledge. You have 310 days to enroll.

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