What is in this article?:
- Cottonseed now insurable
- No new records
- Cottonseed a big part of revenue stream
- Value increased significantly
- Now growers can insure cottonseed value
In 2009, a paper titled "Impacts of Including Cottonseed Production in the Revenue Stream for Calculating Crop Insurance Coverage for Producers in the Lower Coastal Bend of Texas" was developed by Texas AgriLife Extension Service agricultural economists, including Dr. Larry Falconer of Corpus Christi. In this paper, it was shown that the relative price of cottonseed to cotton lint increased from 15 percent to 31 percent over the 2004 to 2008 time period. This increase implies that cotton producers are not able to insure an increasingly important part of their revenue stream. Because of increasing cost of production for cotton in the Coastal Bend of Texas, producers are finding it necessary to acquire increasing amounts of credit for their operations. It would be helpful in acquiring credit if producers could insure the larger percentage of the total revenue stream from their cotton production by including cottonseed values in yield guarantee calculations.
In this paper, Texas AgriLife Extension Service agricultural economists reported that by adjusting APH yields for cottonseed values, the increase in expected indemnities would exceed increased outlays for premiums by ratios ranging from a low of 10.7:1 to a high of 50.8:1 for different selected yield guarantees. On November 18, 2010, the board of directors of the Federal Crop Insurance Corporation released the Cottonseed (Pilot) Endorsement for sale for the 2011 crop year. The first 2011 crop year sales closing date for purchase of the Cottonseed Endorsement is January 30, 2011.