Vane in the News

Knowns and Unknowns

VANE can help you understand your known and unknown weather risks, and how they impact your agribusiness.  Visit us at or call us at (507)574-4271 to learn more.

When it comes to producing crops, farmers can get competitive, always shooting for the next 10 bu. Have you ever considered you’re actually salvaging yield potential rather than maximizing it?

“Seed’s greatest potential yield exists while it’s still in the bag,” says Farm Journal Field Agronomist Ken Ferrie. “After you plant the crop, it adjusts its yield potential based on the elements and the environment. There’s only one way for yield potential to go — downward. So your job is to salvage as much yield as possible.”

If you do everything else right, weather sets the cap on yield. But you don’t know how the weather is going to shape up. “Your goal is to weatherproof the crop as much as possible to reduce negative effects of weather,” Ferrie explains.

Read the rest of this story at the AgWeb website HERE.

By Hongxia Jiao

Despite concerns over dry weather and drought conditions in June of 2023, the US produced a record corn crop of more than 15.3 billion bushels. However, average corn yield performance varied considerably across the US in 2023.  Many counties achieved good to excellent yields relative to trend estimates, but other counties had yields well below trend.

Herein, we report recently released yields from the National Agricultural Statistics Service (NASS) of the USDA.  NASS yields are not used in calculating payments from county-based insurance products or the Agriculture Risk Coverage at the county level (ARC-CO) program.  However, NASS yields are highly correlated with the yields from RMA (Risk Management Agency) and FSA (Farm Service Agency) that will determine payments. NASS county yields suggest payments from area-based insurance, including the SCO (Supplemental Coverage Option) and ECO (Enhanced Coverage Option) programs, are likely for a number of counties for the 2023 corn crop.  ARC-CO may trigger payments in a limited number of counties whose yields were significantly below trend.

2023 County Corn Yields

NASS, an agency of the U.S. Department of Agriculture, recently released their survey-based county yield estimates for 2023 (see Figure 1). Counties in the green categories had 2023 yields above the national average of 177.3 bushels per acre.  Counties in orange had yields below the national average.  Yields above the national average were concentrated across the main Corn Belt region (central Nebraska, southern Minnesota, Iowa, the northern two-thirds of Illinois, southern Wisconsin, Indiana, and Ohio).  The pattern of higher yields in these more highly productive regions is typical across years.


Our Sales Team

René and Darcie, at the U.S. Custom Harvesters Annual Convention 1/26-27. Hope you had a chance to visit us at Booth H8. What an AWESOME convention!

Farmer and Agribusiness Risk Management Strategies

Published at Insurance Thought Leadership. View original here.

Managing Crop Production Risk caused by Increased Frequency and Severity of Weather Events

Business owners are often asked the common question, “What keeps you up at night”? Depending on the business, their responses are numerous. In Agriculture, weather is often the most frequent response because it represents one of the most significant external events that can create catastrophic loss to agricultural businesses. Farmers and agribusinesses share a common concern regarding weather and the increasing frequency and severity of weather events that cause billions of dollars of crop damage and economic loss annually. Farmers alone have incurred on average just under $9B in annual loss recoveries over the last 10 years.

 While farmers and agribusinesses share a common threat from drought, excessive moisture, windstorm and other weather events, their risk management strategies for managing weather risk are notably different. Why? Let’s start with a brief risk management 101 discussion.

When managing risk, we have three choices. We can avoid the risk, retain the risk, or transfer the risk through insurance.

  1. Avoiding the risk is frequently not an option as it is at the heart of why the farmer and agribusiness exist (i.e., farmer – growing a crop and agribusiness – selling a product or service to a farmer).
  2. Retaining the risk is a choice but requires a comprehensive understanding of the risk and consequences for each Agribusiness organization.
  3. Transferring risk, particularly when catastrophic risk exposure exists, is frequently the most customary practice for commercial enterprises. Insurance, used as a risk transfer or for risk sharing, is a fundamental economic tool utilized by most businesses to secure capital and to protect against catastrophic economic loss, including weather events that can devastate a business.

Farmers and ranchers extensively leverage the Federal Crop Insurance Program to protect their production and revenues from loss due to weather events. This important risk management solution, subsidized by the Federal Government and available only to farmers and ranchers, helps protect them from weather-caused losses to their crops and pastures.

Agribusinesses, on the other hand, retain significant risk exposure for their own lost revenues caused when farmers and ranchers don’t purchase the Agribusinesses’ products and services due to weather-related crops loss.

Farmers and agribusinesses share the same exposure to catastrophic weather events, but their risk management strategies are quite different. Moreover, Agribusinesses face financial exposure for potential loss of their product and service revenues for corn and soybeans crops in just five of the largest corn and soybean producing states. Representing roughly 60% of corn and 40% of soybean production, these five contiguous states create significant concentration of risk and potential for catastrophic income loss and balance sheet impact to Agribusinesses.

So how do Agribusinesses manage weather risk? Agribusiness can partially manage catastrophic weather exposure through geographic diversification. Geographic spread of products and services can help to reduce the impact of a significant weather event. But is that enough?

Recent weather events, like 2019 when over twenty million acres of prevent plant occurred across portions of the Midwest, or 2020 when a “Derecho” storm impacted crops along a 50-mile-wide path from South Dakota through Ohio, created significant loss to Agribusinesses from loss of input sales, replant guarantees and excessive usage of rental equipment. Because this event impacted the Midwestern states, this single weather event created catastrophic loss to even large agribusinesses selling products and services to farmers and ranchers. Additionally, these types of events create significant risk to lenders’ revenues and balance sheets when they have exposure to operating and business loans to impacted Agribusinesses.

So, while Farmers and Ranchers have Crop Insurance to manage their risk, what insurance alternatives exist for Agribusinesses? Until recently, very few insurance options existed to protect Agribusinesses’ revenues from weather-related losses on their farmer and rancher product and service sales. Like crop insurance for farmers and ranchers, there are currently two types of insurance products to protect agribusiness revenues and balance sheet risk – Parametric and Basis Risk Insurance.

Parametric insurance (or index-based insurance) provides coverage on a predetermined weather event vs indemnifying for actual loss occurred by the insured. The parametric insurance policy insures a policyholder against the occurrence of a predefined event by paying a set amount to all insureds in the covered area, regardless of whether an actual loss occurred to an insured. The advantage of this type of insurance is the simplicity of the program and the generally lower cost. The disadvantage is that some insureds who did not suffer any loss may be paid because the predetermined event occurred. On the hand, some insureds that suffered loss may not be paid, because the specific predetermined event did not occur. This type of policy, under the Federal Crop Insurance program, is known as an index policy. An example is the Pasture, Rangeland and Forage Insurance Policy.

The other type of insurance is “Basis Risk” insurance, where each field location is insured specifically and the amount of coverage, perils insured against, and damage assessment occurs at the field level. This type of insurance matches specific risk exposure and loss payments to an insured’s specific location for actual loss incurred. This type of policy, under the Federal Crop Insurance Program, is known as an Individual Yield and Revenue policy. Examples include the Crop Revenue Coverage or Revenue Assurance Policy. Basis Risk Insurance policies provide the best aligned coverage between risk exposure and coverage specific to the insured location and actual loss experience.

While few weather risk insurance options were historically available for Agribusinesses, innovative technologies, more granular data, and specialized risk management solutions are now available. Agribusinesses, like their farmer and rancher customers, now have new insurance tools to help manage the frequency and severity of weather event risk and protect their revenue and balance sheet exposures.

Don Preusser is a recognized insurance professional with over 30 years of personal, commercial, and agricultural insurance, reinsurance, and legal experience. He is the former President of John Deere Insurance Company where he directed all primary insurance operations, including its crop insurance program and insurance solutions for financed and leased equipment. A key area of expertise has been Don’s focus on integration of various precision, sensor, and imagery technology to create highly specialized underwriting, pricing, and insurance coverage solutions for both growers and agribusinesses.

VANE President, Don Preusser, Joins Panel Discussing Future Costs of Risk and Data Digitization

Risk Management Future

VANE’s President Don Preusser recently spoke on a panel discussing farm policy, economics and risk management sponsored by Meristem. Don detailed the Future Cost of Risk: Where does Innovation, Climate Change and Public Policy Intersect and how Digitized Field-Level Data advances multivariate rating methodology and significantly advance and modernize agricultural production insurance. VANE has already started with new and unique insurance solutions for Growers and Agribusinesses. View the resource link and contact us to learn more!

Innovative new risk management options emerging


If the U.S. Department of Agriculture’s Prospective Plantings report holds true, producers are on track to plant 92 million acres of corn, over 87 million acres of soybeans and almost 50 million acres of wheat this year. But like most years, Mother Nature interferes and a portion of those acres never get planted.

If the U.S. Department of Agriculture’s Prospective Plantings report holds true, producers are on track to plant 92 million acres of corn, over 87 million acres of soybeans and almost 50 million acres of wheat this year. But like most years, Mother Nature interferes and a portion of those acres never get planted.

Looking at historical data, the range of prevented plant possibilities looms large—from 1.2 million acres in 2012 to a record high of 19.6 million acres in 2019. Prevented plant has averaged 5.7 million acres per year from 2007 to 2022.

After massive snowstorms whipped across the Dakotas and Minnesota through much of the winter and spring, there is a high expectation that growers in that region may be severely delayed with planting. But Frayne Olson, crop economist and marketing specialist at North Dakota State University, says even though the snow often “looked horrendous” it didn’t contain as much water content as in previous years.

VANE’s CEO Don Preusser interviewed in AgriPulse

Written by Sara Wyant at Agripulse.  

If USDA’s Prospective Plantings report holds true, producers are on track to plant 92 million acres of corn, more than 87 million acres of soybeans and almost 50 million acres of wheat this year. But Mother Nature often interferes, and a portion of those acres never get planted. 

Looking at historical data, the range of prevent plant possibilities looms large: from 1.2 million acres in 2012 to a record high of 19.6 million acres in 2019. Prevent plant has averaged 5.7 million acres per year since 2007, the first time electronic data was available from USDA’s Farm Service Agency, including almost 6.4 million acres in 2022.

Producers with an insured crop who can’t get fields planted by approved planting dates may be eligible for prevented planting payments, which cover a portion of the pre-planting costs and may be a more profitable option than planting late. But what about the agribusinesses who planned to sell seed, fertilizer and other inputs to those producers? Or the custom planters and harvesters who no longer have fields to work?    Read the complete article at AgriPulse.