Cottonseed now insurable
Jan. 10, 2011 at midnight
Updated Jan. 10, 2011 at 7:11 p.m.
Cottonseed insurance is now available for growers nationwide.
The Federal Crop Insurance Corporation released the Cottonseed (Pilot) Endorsement program for sale Nov. 18, according to a Nueces County AgriLife Extension news release.
The program applies to the 2011 crop year and the first sales closing date is Jan. 30, according to the release.
Such insurance is open to all states that plant cotton and was developed by a variety of Texas cotton-grower organizations, said Jeff Nunley, executive director of the South Texas Cotton & Grain Association.
The cotton and grain association was among the organizations behind the movement.
"You grow cotton for the lint, but the product recognizes that seed has value, too," Nunley explained. "This allows producers to insure that, as well."
It does not insure against the loss of quality, but if a producer experiences a yield loss that triggers insurance, he could also receive payment for the cottonseed loss.
The program establishes coverage levels with a conversion factor applied to lint-yield records, according to the news release.
Coverage is relatively inexpensive, Nunley said, explaining a $5 premium might provide an additional $75 in coverage.
"When you look at it that way, economically it makes sense," he said.
The insurance might not be right for every grower however, and Nunley encouraged people to talk with their insurance providers to determine whether it's the right choice.
Nunley said he's glad to see the program getting off the ground. And, although it took time for word to get out about what exactly it was, he said he thinks it has potential to help many producers.
"I think it's catching on," he said. "It's just another way to manage risk."