Gars - Page 3 - The Combine Forum
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post #21 of 34 (permalink) Old 01-31-2019, 07:45 PM
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SWMan, neither Gars, crop insurance of AAFC take into account costs of owning/renting land


I cannot comment on AAFC but crop insurance is bushel's guarantee with a quality adjustment. GARS is a gross margin coverage insurance on whole farm. If unsure what gross margin is, you need to do some research. It has nothing to do with land or equipment costs.
Assuming GARs is the same as 7 years ago, it is seed, chemical and fertilizer expenses plus whatever margin you purchase?

AFSC is bushel guarantee plus reseeding benefit, unseeded acres, and if you purchase hail endorsement at or before the April 30th deadline you save approximately 60-70% from what you will pay a line company.


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post #22 of 34 (permalink) Old 01-31-2019, 07:46 PM
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your premium has a risk area factor built into the cost. I know for a fact that the Peace has about 3 times the premium for the same coverage has we have.
Well thatís nuts. Had never heard that before. Would certainly make a huge difference. I have land in both risk are 2 and 3 and there is a slight difference in premiums but nothing too onerous


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post #23 of 34 (permalink) Old 01-31-2019, 07:48 PM
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Originally Posted by Rural Sk View Post
SWMan, neither Gars, crop insurance of AAFC take into account costs of owning/renting land


I cannot comment on AAFC but crop insurance is bushel's guarantee with a quality adjustment. GARS is a gross margin coverage insurance on whole farm. If unsure what gross margin is, you need to do some research. It has nothing to do with land or equipment costs.
Well I just went and watched a video from GARS and they talk about insuring fixed costs like land and machinery. I'm wondering how that is calculated or if it's only based off things like rent/interest costs that are on P/L statement?

Watch from about 1:08


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post #24 of 34 (permalink) Old 01-31-2019, 08:27 PM
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Well I just went and watched a video from GARS and they talk about insuring fixed costs like land and machinery. I'm wondering how that is calculated or if it's only based off things like rent/interest costs that are on P/L statement?

Watch from about 1:08

Global Ag Risk Solutions - YouTube
Well they mean that that is what the gross margin will cover. So basically they take every dollar you spent on chemical, fertilizer and seed for the year and then add whatever gross margin coverage per acre you purchased and that’ll be your total coverage, it is assumed that you would want to purchase a gross margin that would cover most of your expenses outside of the aforementioned three- so land, fuel, property/vehicle insurance, equipment, wages etc etc.

For me I would sure look at it if they can offer a $250 gross margin. They actually called today but I’m away so I’m gonna call them next week and see what they are offering now. I was really unimpressed 7 years ago but maybe they’ve improved.

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post #25 of 34 (permalink) Old 01-31-2019, 09:30 PM
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I had to go grab the graph MNP generates when they do their analysis and SWman's right, it does nothing for high margin producer's. Our crop insurance is way to good to even think about GARS.

Who know's we'll keep running the number's, lets say the bottom of the market fell out when crop insurance was setting their what if's then maybe Gar's might look good.
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post #26 of 34 (permalink) Old 01-31-2019, 11:50 PM
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I had to go grab the graph MNP generates when they do their analysis and SWman's right, it does nothing for high margin producer's. Our crop insurance is way to good to even think about GARS.

Who know's we'll keep running the number's, lets say the bottom of the market fell out when crop insurance was setting their what if's then maybe Gar's might look good.
Kind of the way I sized it up when it first came out. Probably just keep self-insuring since MB crop insurance is a waste of time. Keeps life much simpler not having to worry about insurance anyways.

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post #27 of 34 (permalink) Old 02-01-2019, 01:10 AM
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Curious what you guys are considering high margin ?

Brent.
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post #28 of 34 (permalink) Old 02-01-2019, 08:04 AM
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Curious what you guys are considering high margin ?
Significantly more that they are suggesting for gross insurance. Agristability is only program that really made sense for the high margin producer. They changed that program to eliminate payments but have recently improved it I believe, need to re-examine that one.

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post #29 of 34 (permalink) Old 02-01-2019, 11:37 AM
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Significantly more that they are suggesting for gross insurance. Agristability is only program that really made sense for the high margin producer. They changed that program to eliminate payments but have recently improved it I believe, need to re-examine that one.
Agristability still doesn't work because they include any crop insurance payouts towards your reference margin. So its almost impossible for agristabiliy to trigger even in the worst year. I was in a AFSC focus group last spring and not one producer who was in Agristability and all risk insurance collected Agrisability from our 2016/17 crop fiasco. If it can't work then when will it?
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post #30 of 34 (permalink) Old 02-01-2019, 01:14 PM
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Agristability as I understand it will only payout on a complete disaster of a year. Like close to zero income, that's what we use it for along with crop insurance to protect from that complete disaster.

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