Aloha and thank you for tuning in to another episode of Livestock Walaʻau! In this episode we will be talking with Bonnie Lind of Lind Insurance Services and Jacqueline Da Rocha, Senior District Sales Manager in Western Region for ProAg. Listen in to learn more about LRP, how it can be used by producers to mitigate risk and what is available in Hawaii.
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Aloha and thank you for tuning in to another episode of Livestock Walaʻau! In this episode we will be talking with Bonnie Lind of Lind Insurance Services and Jacqueline Da Rocha, Senior District Sales Manager in Western Region for ProAg. Listen in to learn more about LRP, how it can be used by producers to mitigate risk and what is available in Hawaii.
Please also consider completing our feedback survey at the link below!
Check out our other social media platforms!
Guest Contact Information
Thanks for listening! Check out our other social media platforms!
Aloha. Today's episode is brought to you by the Western extension Risk Management Education Center rasp USDA NIFA, and the University of Hawaii College of Tropical Agriculture and Human Resources and the livestock extension group.
Melelani Oshiro:Yeah. Aloha. Welcome to the livestock walau. A podcast ain't right educational support, information, guidance and outreach to our livestock stakeholders in Hawaii. We are your hosts Mele Oshiro and Shannon Sand. And today, we're gonna be talking with Bonnie Lin from Lynn Insurance Services and Jacqueline de rocha from Pro ag insurance company. Thank you so much, ladies for taking your time out to talk story with us today.
Bonnie Lind:Thank you for inviting me. Yeah.
Jaqueline Da Rocha:Yeah. Thank you for having us. Yeah.
Melelani Oshiro:So maybe Bonnie, do you want to start and maybe just give a little bit of background about your position and
Bonnie Lind:what you do? Yeah, sure. I, I'm basically a crop insurance nerd. I've been in crop insurance since I started working right out of high school. And I've mostly been in crop insurance since then I work for the USDA Risk Management Agency through the 80s and some through the 90s. And worked for a company for a short while then began Lynda Insurance Services in 1997. And then in 1998, I became licensed in Hawaii and started working with Hawaii growers. I based in California, I write insurance here and also in Hawaii, a couple of other states because I write nursery. But yeah, I focused mainly on crop insurance, I don't try to write any other lines of insurance. And so that's why I call myself a crop insurance nerd because I just focus on crop insurance and the mostly the USDA programs, some private programs that the companies right i wracked with a couple of companies, pro AG is one of them are cis as the other. And I think they're both good companies. They're both active in Hawaii, and are really good at serving their their policies, the agents that write them and the growers that carry them.
Shannon Sand:Alright, thank you. And Jacqueline, I know you and Barney work together closely on different policies. So can you give us some additional information about you know, your job and what you do and who you work for and all that stuff?
Jaqueline Da Rocha:Sure, I am. So I work for a company called Pro AG. We are an approved insurance provider. Throughout probably the session, you'll hear a lot of acronyms. So we refer to ourselves as an AIP, which again means an approved insurance provider. So essentially what we do is we kind of back banya Bonnie's the agent, she's the one out, you know, selling the policy, and we are the ones that will underwrite that policy, and then go ahead, if there's any sort of issues, as far as claims or indemnities that are due, then then we'll issue those as well. So we're kind of I like to tell, when I'm talking to agents, I like to tell them, hey, we're the behind the scenes, we're we're supposed to be the ones behind the scenes making you guys look like rockstars. So making sure they have all the information, they need to make sure that their insureds are up to date on what they have. So
Shannon Sand:very good. So Hawaii is quite unique in terms of just physical location and resources. And just I feel like the depth and breadth of things that are grown here. So I think one of the things that like when I talk to a lot of people people have questions about is like, what is available here? Because there are some options that are available here that aren't available other places. And then obviously vice versa. And some that I mean, there's a lot of options. So I don't want to do you want to start because like I know, I know, there's a lot that we could probably talk about here. So
Bonnie Lind:yeah, there's like 40 Plus crops in California, I believe that are insurable but not in wine. You know, I have one policy that covers a lot of crops under one heading and that's the whole farm revenue protection. So that's a revenue policy that covers everything that a grower has on their tax return that provides income to the farm.
Shannon Sand:So does that include livestock as well then in the revenue, no
Bonnie Lind:livestock would be covered. I think it's up to a 2 million limit, isn't it Jacqueline on the whole farm policy, think I was just looking at that, but they can as long as their whole. Their livestock income is limited to $2 million on their tax return, then they can include that into their whole farm policy. So other crops that are available or specialty crops, the Hawaii tropical tree tropical fruit policies cover coffee, Hawaii, bananas and papaya. There's a nursery crop insurance program that covers wholesale nurseries, macadamia nut and tree policies. Also, Hawaii does have the hurricane insurance protection, which is an add on endorsement that provides coverage to insured growers who already have a policy who want to cover a portion of their deductible in the event of hurricane crosses into their county. And so that's pretty much the list. It's kind of a limited list for Hawaii. But under that whole farm revenue protection, if a grower has multiple crops and is diversified, that's a really good policy to zero in on. And then on the livestock. We have livestock risk protection, livestock, gross margin and dairy. It's called dairy risk protection, I believe those three programs are available and they're more price protection protection than they are animal protection. And I haven't written any in Hawaii, I've been had a lot of inquiries, or even here in California either. But those are available for grower wants to look into the policies dig into how they work and start watching the markets, then, then it's available.
Shannon Sand:Wow. Yeah, I know, there's a lot of options, I didn't realize there was an additional like, like an add on that you could get that would help cover part of the deductible. So
Bonnie Lind:that's, that's the hurricane insurance protection endorsement. So it does a grower can cover up to 90% of their deductible. If they already have an existing policy, they have to add that on by the policy deadline for their whatever crop they're insuring, right?
Shannon Sand:And the deductible is good. And correct me if I'm wrong, just because it's like not everybody knows all the insurance terminology. So I'm going to try and talk about some of that as well. The deductible is what like I as the producer would have to pay if I'm filing a claim correct?
Bonnie Lind:It's the amount of loss that you would have to absorb before the loss trigger hits. Yeah. Okay. So generally, it's around 25%. For the maximum policies, policy level, some policies have higher levels, but it's around a 75% coverage level available for most of those crops. And so it's a 25% deductible that the grower absorbs before the claim kicks in and begins paying. And so that's why insurance protection allows them to cover up to 90% of that. So that they began. Yeah, and it's just an automatic payment if the if the hurricane occurs in their county. Nice, very good. So, yeah, we've had a few takers on that.
Shannon Sand:Yeah, I would imagine over the last five years, you might have had a couple of folks that decide that was a good option. Yeah, I
Bonnie Lind:think it's only been around for three or four years. But the first year it was in it it paid out for because of the Maui. Yeah. So very good. Very good.
Melelani Oshiro:I mean, I might ask a silly question. And we might be taking this out. But okay, so you take a step back, and you said life's awkward risk protection? You're not is this isn't it insuring essentially the animal but the value of the production of that entity? Right? That's how you would explain it. That's correct.
Bonnie Lind:It's not that's not guaranteeing that the animal will make it to market, it's more locking in a future price.
Shannon Sand:Guarantee that live till till they go to market? Right.
Jaqueline Da Rocha:Yeah, the the program itself, it really, I hate to say this, but it really when you talk about locking in the price, it really has nothing to do with the price that the grower received. Right. Right. It really is based on the CME price that we have out there. And yeah, there is no it doesn't, it doesn't insure against the death of the animal or anything like that. It's simply works off of that CME market price that you locked in. And then what happens at the end of that endorsement, period, and what the actual price was during that endorsement time. Yeah. All right. Well,
Melelani Oshiro:I guess that that's another question I have because so some of our producers here are, you know, animals, majority of our stuff does get shipped off, right. And producers do sell things out. But the ones that stay here Now does that because we don't really have like an auction market to get like local prices here. We base everything off of those CME prices. Does that does that impact our producers here that keep stock here on the islands to be sold? And like there value and there's animals.
Jaqueline Da Rocha:No, it doesn't. Again, we're not really concerned about the price that they receive for those animals. We're not going to ask you, Hey, how much did you sell your house for? Okay, we're simply looking at the CME price. Or what what happened during that 13? What you can go anywhere from 13 to 52 weeks, depending on what type of endorsement you take out. But we're simply going off of what happened on the CME during that discovery period of when they discovered the actual prices versus what their the, the, the expected price was that you sign the endorsement
Shannon Sand:before. Okay, so when you sign the endorsement, you're saying you're expecting let's say $1.50 100 or $150 100 weight, but the CMA let's say it falls to I don't know what a trigger amount would be, let's say it falls down to $100 per hundredweight, but you had it locked in at 150. So and then, again, I'm sure there's some sort of deductible or percentage, that I don't know how that works. So I'm gonna let someone else talk about it. But please tell me if I'm not explaining this guy's like, it's I'm assuming there's some of this going on, which you will probably have to explain better than like, I'm trying to ask the question.
Jaqueline Da Rocha:So in regards to the question of kind of how that works, so yeah, so what happens is, for LRP, which is usually the big one, that you know, when we talk about cattle, that's usually the big one that we all look at. When you RMA will come out every it's every day. So Monday through Friday, unless there's something going on in the market where they're not comfortable producing an offering for the growers, which could be something volatile is happening, and, and so so what they'll do is they'll come out every day with a list of prices. And how they do that as they base that off of what's happening on the Chicago Mercantile Exchange. Okay, so whether it's the feeder cattle fed cattle, and we'll talk cattle, I, I'm gonna guess you guys don't have much swine on the island. But
Melelani Oshiro:yeah, but it's local eat
Jaqueline Da Rocha:a lot. Yeah. I mean, so if there isn't also the opportunity for swine as well. So we do have that kind of listed in there as well. But, but you do have. So you do have that opportunity. They'll they'll put out offerings every day. And then what happens is, depending on you know, what programs Bonnie, you know, Bonnie being the agent, depending on what program she has, they'll send out quotes, so for growers interested in he's like, hey, I'm interested in locking in, I know the cattle price right now is we'll say 100. And like you said, $150, right. $150 100 weight. And, and the offering comes out where the price set by that futures market, what they determined the offering for that day is for anywhere from a 13 week to a 52 week endorsement. Okay, so they can last any, there's like, I think 13 periods, but it's like 13 weeks, 17 weeks, 20, I want to say 21. But don't quote me on that. There's like 13 Different endorsement lights that you can use. And and it'll have coverage levels that range. So LRP is very good, you'll get a coverage level that could possibly be about, I just look today, I ran a report for yesterday's offerings. And it was the top for 13 weeks was 99.7%. That's how much you can cover. But But and it goes down from there. And obviously, the cost of the premium of that is change depending on kind of coverage level and, and that kind of stuff. So liability factor. But what what you're going to do is you're going to say, Hey, I'm going to sell these cattle in 13 weeks, so I'm looking for a 13 week endorsement. And I want to go ahead and lock in that $150 price. And so they would tell Bonnie that Barney would would tell them, Okay, you can cover it at 99.7% Because that's the top coverage level, or you can work your way down, and they'll give you a bunch of options on on coverage levels that are offered that day. And then, you know, they would write up the the endorsement, and then that endorsement would stand for 13 weeks, and then at the end of that 13 weeks, RMA would come out and say okay, we have a discovery period during those 13 weeks, and this is what the actual price was. And let's say it comes out and it's 100 bucks. Okay, and and so what would happen is then they could possibly depending on why it was 100 bucks, and and and then you know there's some there's some forms that we would need to get from the the grower we do like a notice of loss and they would have to send us some sales receipts and that kind of stuff to prove that they had cattle.
Shannon Sand:Yeah, cuz I guess that would be my other question is that you know, like, how do you prove Yeah,
Jaqueline Da Rocha:so we always say that that crop insurance itself is a self certified program. Right. But when there's an indemnity do so so RMA does their audits Risk Management Agency is the one who oversees crop injury. rents the livestock program. And, and they will, from they do audits all the time. They they have a certain percentage of policies, they pull and they look at them, they'll they'll ask questions, you know, they just want to make sure that what you're stating on that policies is correct. And then if you're, if it looks like you're owed an indemnity, you will have to provide some type of third party disinterested third party documentation that says, hey, I sold these cattle or, you know, yeah, owned these cattle, depending on what type of program you're you're, you're involved in, or what policy you
Shannon Sand:would be QA or like, what would be considered a third party disinterested? Like I because again, kind of like mele said, we don't have like actual actual markets left on the islands anymore. Right. But like, I guess I, I'm like, I would imagine if you take it to be processed, like a local processor, or? I don't know, I'm just wondering.
Jaqueline Da Rocha:So a lot of times what what I see that guys will turn in is sales receipts from like the sales yard. Yeah, so some guys will take their their cattle to a sales yard. Right. And, and I don't know what you guys have on?
Shannon Sand:We don't have any of that. That's my question.
Melelani Oshiro:So there's usually two to three ways it's going to go, it's either gonna go to the processing unit, or it's going to get to a buyer that's going to ship off to the state, or it's going to be privately sold to just another producer or or whatnot just for home use or anywhere, just a private sell. So the private seller would think would be probably the one way, how would they document that type of thing, it's going to process or they'll have paperwork for that going to the buyer, they definitely have paperwork for that. But what's the best way for them to document things if it's a private sale off the form.
Jaqueline Da Rocha:So there is some some language and we have many handbooks, and Bonnie's very familiar with the handbooks and army puts out many handbooks that tell us how things have to look like what they have to what sales receipts have to have on them in order to be considered verifiable. And so it would, it would simply, I mean, sales receipts that essentially have names on it and addresses I mean, that that type of stuff, how much they sold it for. And again, we're not really going to look at what did they sell it for versus what the price was, we don't really care what their price was, but we just want to make sure that the sale is verifiable. Right. And really honestly, RMA will come in and if they do pull an audit, right, or if or if the policy goes over a certain dollar amount even RMA does have, you know, they can come in and say, Yeah, I want to be part of that. We have compliance reviews, right? If it's a high dollar audit, you know, we're talking 200 200,000 $500,000, indemnities. Are Making come in and say, Yeah, I want to be part of it. But but for the most part, I mean, you're looking at at sales receipts, to say, Hey, I sold these cattle. This is how many cattle I sold. And and and that's usually again, there's some language in there. And if there's anyone that's interested, and it's a private, you know, we can supply that language, we know that there were seats Pass, pass muster.
Shannon Sand:That's good. Okay, so I have a question that I think a lot of producers because there's a lot of smaller operations here. Because when you think of things like insurance, or things that are based off of the, at least when I think of it, things that are based off of the futures market, that's the large bulk volume, those are 50,000 pound contracts, right. So I was like, I'm, what is the minimum? Or like, LRP?
Jaqueline Da Rocha:So I will tell you this, we, we actually had that question not too long ago. Oh, there, there really isn't a minimum. Okay. I actually have written endorsements, or I've had agents for like, you know, forehead, five and 10 head. I mean, that's, yeah, I mean, obviously, you're gonna have the larger producers, right? But but we also have the smaller guys who, who are kind of like it, and some guys don't know how it works. So they just want to try it. Right. So that's just want to try it and see what happens. So you've got those as well. And army has been really good about, about kind of modifying the program making modifications to the program. As we've gone through the last few years, they've they've really made some changes that that I think, have benefited benefited more of the smaller guys and the larger guys, kind of the broad spectrum. So good, good.
Melelani Oshiro:Yeah, that's great. That's great to know. Because I think that's the, you know, our smaller producers sometimes don't have such a big overhead to help with losses and things like that. So that's pretty productive for them. So maybe you guys want to I don't know if it's Bonnie or Jacqueline want to talk more and maybe even both of you, but tell us a little bit more about the different insurance, insurances that producers might have or need, under some different circumstances, you know, and maybe you know, Chad and I can probably put more information to some of the issues here. But, you know, I mean, based in a lot of our market, our animals, especially with the beef do go out of state, I think our beef is pretty much the only one that goes out of state, everything else is locally marketed here. But you want to share maybe some of the insurances that producers might be interested in? And why.
Bonnie Lind:Jacqueline, I'll let you go for that one. Because I am not having written a lot of it. I don't know how they're making their choices in the regards of the different types of programs that are available, but I know that LRP is the most popular one that's participated in. And beyond that, I don't know.
Shannon Sand:Okay.
Jaqueline Da Rocha:So Bonnie, and I kind of had this discussion a little bit about what we would you know, what you would see over there. I have a dairy background. So I'm always like, well, there's dairy over there, you know, but she said, No, I don't think there's much and I go, you're probably right, there's not much. But um, but what I think what, it's different for a lot of producers like what kind of entices them to to look at the market. Right now, I think a lot of people are looking at the markets, because what do we know about beef markets right now? They're very high, right? I mean, these are some good prices. And guys are looking to lock in good prices. And, and there's a lot of uncertainty, right? I mean,
Shannon Sand:volatility is pretty high at this point. So what there's a lot of
Jaqueline Da Rocha:uncertainty with what's going on in the world. And that scares a lot of people. And so I think just to have a little bit of, of risk management at their fingertips is, is really important. And that's one of the things I know, when we talk to agents, we're like, hey, the biggest thing that we can do is just be a risk management tool for these guys. Just give them something to put in their toolbox. And when it works for them, and when they're comfortable with the price and they're comfortable with a premium that they could possibly have to pay, then, then they know that, hey, I've got this option sitting here. And I'm not out on an island by myself not able to, you know, not able to sustain. And that's huge. So
Shannon Sand:yeah. So
Melelani Oshiro:you said you talked about the livestock race protection, lrps, those are probably the most common and popular. So for those who qualify, you wouldn't share more about that. And like so if I was pretty sure came up and said, you know, we want to look into this program, what's the steps that they would have to take and like what more information would they need to provide and in order to be be part of that.
Bonnie Lind:So I know that it's good for them to go ahead and set up a policy and to begin understanding how the policy works. And I would work with the grower and getting them familiarized with how the website works, where they can check the pricing, through the RMA, and through the different endorsement periods. And I would be working closely with Jacqueline, since I haven't written a lot of this in the past. And in order to make sure they had an idea of what their options were. But I've always been, it's always been stressed to me that if a grower has a policy in place, it doesn't mean a turning premium until they lock in an endorsement period. So it's good to have the paperwork done upfront, if they think they're interested, start looking at the market prices, and then move on something quickly when they see a price that they would like to set their endorsement at. And then I'll let Jacqueline take it from there, because I'm after that I would be at her mercy to get the information to the grower that would that would be accurate.
Jaqueline Da Rocha:We try to make it as painless as possible. So she's right, that the best thing that someone can do is if they're really interested in trying to maybe look at having a policy is to get what we would have the application in Africa through the application process, which is very pain, painless. I mean literally, it's it's your entity name, you know, how do you sell the cattle, that kind of stuff? And then Barney would would submit that to the AIP and and the only reason why we asked for that is because there's a very short time that the very short window that you have to be able to book an endorsement. So prices come out at and I'm gonna go off a pacific standard time so I'm not as quick with the changing Hawaii Standard Time. So they come out for us somewhere right around 1231 o'clock Pacific Standard Time, so I'm going to guess 11 ish, Dennis your time. And then we only have until 7am pacific time so for, you know, four or 5am your time in order to and that's for the next day to get those endorsements booked. Okay, so it is a very small smoker window. All right. And and so if you have the application in we've gone through and looked at a lot of crop insurance, we look at your EIN or your social security number, we make sure that that's a valid number. And that entity is correct. And if there's anything that comes As up any sort of issues that come up with that, with that 10, verification, tax ID ID verification, we have to be able to get that fixed in order for the endorsement to go through. So when when we're trying to do the application and the endorsement if anything goes wrong with that application, we just, we, we run a very, very tight window, and we may not be able to get the endorsement through. So that's, that's a key is, like Bonnie said, if you if you have anyone that's interested, fill out the application, just have the application submitted to the AIP submitted to the agent, and we can get that taken care of. So whenever they want an endorsement, if a number comes up, they already know once they put that endorsement in, you're good. No, there's there's there should be no issues. And I should say preface that with saying there shouldn't be any issues. But I'm sure you know, there's there's been issues that have arisen, but but for the most part, all of the hard work is done up front. And the endorsement part is is really smooth. One thing that we do also have to have, and this is in order to receive the subsidy, because it is a subsidized policy, or subsidized endorsement, they do have to fill out an ad 1026, which is a form that deals with conservation compliance through the Farm Service Agency FSA. So that is something that they have to have on file. So and that is in order to receive the subsidy. So it always behooves insurance to make sure that's on file when they place an application as well.
Shannon Sand:Nice. Okay, I have a question that may not be related. And you all may not be able to answer but we have a lot of well, as you can see by our book for the people listening online, there's a photo behind us have a lovely picture of range. So is there an option for some sort of range insurance for people with livestock? Or particularly, I'm thinking cattle? Because I know that like on the mainland, there's things like the past pasture rainfall, forge something inch, they changed the name a lot. I feel like so. But it's a very similar product. So I don't know, is anything like that available? For people out in Hawaii at all? Or? No, really?
Bonnie Lind:No, they haven't approved that for Hawaii. I know, there's been a couple of other agents trying to work on that. And I haven't heard of any progress being made on that there are there's heavy participation in different areas of California in that program. And it's based on rainfall indexes, projected rainfall and actual rainfall received based on different weather, weather stations and different grids to where the where the pasture or range land is. And I think that would be helpful to have in Hawaii, I've put that I've made that comment also to the Risk Management Agency when they're asking about program expansion. But as of yet, this year, it didn't come in. So I don't know if that's on their plans or on their list of improvements to make. But so far, there isn't anything and there. As far as I know, I haven't seen any private programs either come in to Hawaii related to ensuring forage or pasture or ranch, because I
Shannon Sand:think I mean, we have a lot of animals on on forage, like we have a forge and range land specialists, couple of them now. And so I guess in my mind, I'm like if you're a producer, and that's something you're interested in, you know, contact RMA and some other people. So because they can help you can help make that happen, basically. But it was like because I know that it's used a lot in certain places where it's available on the mainland, and we have a we have a lot of pasture and forage land here. So
Bonnie Lind:well, growers could make their voices heard through a congressman or the cattlemen Association. Yeah, there was a formal request through an association. And with the help of a representative, then that seems to get faster action. And so maybe that's something they should talk about at the upcoming annual conferences. You know, how can we get some risk management tools that work over on the mainland over here approved for Hawaii?
Shannon Sand:Yeah, I don't know. I mean, mele, you, again, that's an area you work in a lot is pasture and range land. And I'm like, to me, that's, uh, like, LRP is nice, but it was like, it's not going to work for everybody. But like, something like that would probably, I don't know, you know, what do I know? I've only been here by about two years. And I
Melelani Oshiro:No, you're right. And I think there has been discussion about it, it's a matter it's a matter of having the right tools to be able to give the information about the rainfall and how those impacts are put onto the forages here. And I think they're in the works. I was gonna say, we know weather stations are coming. Yeah, so I think someone Yeah, so I think that's where it is, but you're right, Bonnie, I think that's what producers need to know. Is that the information and those types of things us as agents, we can share that information with the congressman, when we have certain meetings, but when the information comes from the producers and the need for it comes from the producers, it speaks so much more volume and in wait for our legislative sessions, and you know, so we really do encourage that to come up if that's are things that producers can benefit from, and they feel like it'd be useful for them. We do. We speak for them as well, but coming from them, sometimes it just holds more weight. Right. But I think we
Shannon Sand:went a little ahead because we started talking about those that qualify for LLP already. But I do have a question. So what is some general coverage Bonnie and Jacqueline that producers should have like an umbrella insurance policy? Is there like a minimum maximum kind of situation? And we have a lot of people that do agritourism here. So like, is that a different policy? I'm just nosy. So I'm gonna ask questions. So
Bonnie Lind:I, since I focus on crop insurance, I don't write any umbrella policy. So I don't write a farm product at all. So they wouldn't, what I do is I refer to a couple of different agents on the islands that I've gotten good feedback from growers about and so if anybody calls me, I can refer them to somebody who can give them all that information, but I,
Shannon Sand:I can't. Okay, that's fine.
Melelani Oshiro:Are there any other I guess policies are things that you folks, maybe Jacqueline might be able to answer this as far as livestock producers that you see the use that is very beneficial for them also.
Jaqueline Da Rocha:So, um, I, so we do have a few other options. You have, you have the the LGM policy, which is and I knew this was on the tip of my tongue, and I can't remember it. But it's a it's a margin protection policy. And it's a little bit more intricate, as far as it's not just so we always say in LRP, you're basically almost setting a floor for your price, right? You know, depending on what happens, but you're basically setting a floor for your price, with with livestock gross margin, there it is. So with LGM, you are bait managing a margin, so they're going to look at not only the price you're going to get for the commodity, they're also going to look at how much did it cost feed is the probably the largest expense for a livestock producer. So they're gonna, they're gonna take feed into account. And again, it works not off of what you pay for feed. But what you sell your commodity for, it works off of the Chicago Mercantile Exchange, and they base everything off of corn and soybeans is what they look at,
Shannon Sand:does anyone have like minimum qualifications or just certain things to meet those requirements?
Jaqueline Da Rocha:Um, I don't know what that one, I haven't been asked about minimum qualifications, I don't have to look it up. But, but that one's a little bit different. They don't offer it every day, it's, I believe it's every Friday, so then used to only be offered. The funny thing about these policies they used to so LGM used to only be offered one Friday, a month. And it was the last Friday of every month. And again, you're still you're you're still on that it's a very short window. But it is a little bit longer than the LRP window, I believe we go until 4pm Our time I think, on LGM for of the next day, so it's on a Saturday, that's when that policy would would cut off. So but but that one works a little bit differently. Like I said it, it the the main, the main point of that policy is to protect that margin between the feed costs and what you would get paid for your commodity. And that's a good program. I actually like that program. I've heard a lot of people have interest in that program lately. I'm kind of asking myself, probably not the best time corn and soybeans are really high right. So I kind of hold off I kind of, you know, I'm not a risk taker. So I'm probably the worst person to talk to about taking managing risk as far as I just don't do it. But um, but no, we so corn, soybeans are pretty high right now. And and I think the best as far as that being a margin program, you know, you want your obviously you want to maximize what kind of margin you're insuring. So, so there is that program and there has been some interest in that program. I have seen some dairy written on that program. That worked. I mean, they they had a good, a good go at it. And then there is the dairy Revenue Protection Program as well. Oh, that one that's kind of my baby. We it's basically like LRP. You set a floor, again for for the price. And but there's a few different. There's a few different, like you have endorsement lengths for LRP, you have class three or class four or component pricing that you can choose when you work dairy. So there's that program as well. And then, you know, like Bonnie said, with livestock, you can always look at whole farm. So there is there is that option too. So and then, you know, you guys talk about smaller producers. We also have something with Whole Farm called micro farm. Oh, okay. When you look at when you look at whole farm, they actually just raised whole farm, they made some I thought they made good improvements to whole farm this year, they raised they raised the Approve revenue from 8 million up to 17 million for whole farm so we can fit a few more farms in there. But then they also made a smaller program that fits in kind of inside whole farm and it's really part of the whole farm package. But it there's not as many I want I don't want to I don't want to scare anyone off but there's not as many requirements to provide full say,
Shannon Sand:record keeping requirements is my understanding. Like I don't understand micro pharma a whole lot other than I saw the announcement and I was like people were very excited. Yes, it's
Jaqueline Da Rocha:not you're right. And and you and when you ensure you insure under and you are talking umbrella, so kind of when we talk umbrella, Barney starts talking farm pack, and I'm like, Oh, thank you whole farm, right? Because that's what that's all I work in. It's just crop right? So, um, so the micro farm really just has it takes all of your your crops that you would have on the farm and combines them into one line. Okay, so if you had maybe you did a little bit of hay, maybe you did, you know, you had some you grew some crops on the on the island, and then you had livestock as well. Literally, they would just say, micro farm, and this is how much my revenue would be. Right. So yeah, so there's a lot less record keeping
Shannon Sand:for like if you had like goats, and then also maybe you had chickens? Yeah, I'm looking at you right now.
Jaqueline Da Rocha:That one, you can go up to 300. I think it's 350,000.
Bonnie Lind:Micro? Yeah. And then you can have a revenue of 350. So it's still a small farm. Yeah. Under the whole farm, you could have up to 2 million of animals. And wow, if you have a bigger operation, so it accommodates small farmers and larger growers.
Unknown:That's great.
Jaqueline Da Rocha:Yeah. So So I think, you know, we've seen some play over here on that micro farm. In California. We've got some guys that are looking at it, I think whole farm is starting to really get a look. You know, we started looking at it, and all the paperwork part of it kind of scares people off. But I'm like, hey, look, it's it's not as hard as what people make it seem it's a process.
Shannon Sand:And there, nobody likes doing paperwork. I think that's just what it amounts to do and it's not fun.
Jaqueline Da Rocha:Yeah, there's steps to the process. And I mean, if you if you just if you kind of just break it down to where, hey, we're going to do this first, we're going to do the second we're going to just Yeah, I think it makes it a little easier to grasp and a little easier for people to today to digest and yeah, not as scary. So
Bonnie Lind:our filing schedule, it really streamlines the process, it's when they don't have a schedule, that it really kind of increases the record keeping as far as sales price and amount sold and recording that for a historical average of sales and prices, then with no Schedule F were kind of at a loss. So with the Schedule F it really helps with a lot less paperwork. And then if it's a commodity that we have a crop insurance program somewhere on the west coast for then the pricing and average approved yield sometimes will kind of match what our other program is. So if they're writing, for instance, papaya and livestock under one policy, their papaya pricing and approved yields may be similar to what we would give them through the regular program, the papaya program or the white tropical tree, tropical fruit program. And then we would rely on their records for their livestock sales for whatever that whatever part of their approved income came from livestock. So there's a whole lot of different rules like Jacqueline mentioned earlier mentioned earlier we have a lot of handbooks and this handbook is pretty thick. So there's a lot of rules for growers and and all the different ways they keep records and so they try to accommodate all the ops options as far as how growers are keeping records, some have account and some have third party records and some have a mixture of Have stuff that's being sold at farmer's market and to a third party. And so there's a lot of rules. And so the agent is really helpful in trying to sort through that for the growers. Umbrella policy, I have a couple of producers in Hawaii participating in it. Yeah, and I have a lot of inquiries every year and the paperwork, sometimes it causes them to shy away from the program once they see what the paperwork is involved. But another thing is, a lot of the growers that are considering it are upward trending. And we can allow for increasing revenues, and expanding farm, but maybe, maybe they look at the factors that we're limited to using and it doesn't increase the values of the insurance policy to the extent they want. So they may be waiting a couple of years to get more history before they insure. But I encourage I encourage everybody to take a look at it, because it's not super expensive. It's just a lot of work to put together. So if you're willing to do that, and and you get an agent who's willing to work with you on it, then it's a good option to look out for an umbrella type coverage.
Shannon Sand:Yeah, I would just I mean, if there's a lot of paperwork involved and and stuff I can imagine where people would be like, Oh, I don't know. But I mean, it's helpful.
Jaqueline Da Rocha:I will I will say this if they do qualify for two commodities. And this is with Whole Farm microphones a little bit different works a little bit differently. But if they do qualify for two commodities, it's an 80% subsidized pot. Wow.
Shannon Sand:That's mean, that's huge subsidy on it. Yeah, yeah,
Bonnie Lind:that's up. And then if they participate in a matching named crop policy, for instance, if they have coffee, and livestock or coffee and tropical fruits that aren't covered under a program, then they get credit for the liability they cover under their other crop insurance program, which drops the premium down even lower. So there's yeah, there's a lot of perks and options to keep the premiums down. It's, it's worth a look, I think,
Shannon Sand:yeah, it sounds like you someone would really need to like, again, kind of like Jacqueline and Bonnie both stated, like, talk to your agent. Because that's that sounds like there's a lot of options. And depending on your situation, you know, you both
Jaqueline Da Rocha:look fairly young. So if you have a bunch of producers out there as well. Now there is so I actually had worked with an agent that just did a beginning, we have something called beginning farmer rancher and Ryder Farm. It's a 10 year like you can qualify up to 10 years because you have to have at least three to five years worth of taxes in order to write a whole foreign policy. But yeah, if you haven't been in, in agriculture involved in agriculture for 10 years, you could qualify for beginning farmer rancher. And the neat thing about that program is they actually get if they qualify, they actually get an extra 10% subsidy. So you could potentially write a whole foreign policy and have 90%.
Shannon Sand:Oh, wow.
Jaqueline Da Rocha:Yeah, it's a it's a, I think it's worth a look. That's yeah, that's my thing. I'm always like, it's worth a look. Pencil it and if it pencils out great. If it doesn't does, yeah. Yeah. So the one thing with micro farm, I will caution if you have people that have like livestock policies, or other body mentioned, you know, papaya, or coffee or something like that. The one thing with the micro farm is you can't have any other underlying NPCI policies.
Shannon Sand:So what is NPCI? Policy? I'm sorry. So that's
Jaqueline Da Rocha:going to be your multi year multi peril. coverage insurance. Oh, okay. So I
Bonnie Lind:can have the policy, but you can't have it at the catastrophic coverage level. On the micro farm. Oh, okay. So then that pushes you over to the whole farm, right. Oh, yeah. So so like, a little rules that tell you which program which column you're going into if you're going into the whole farm or the micro farm, but if you're in the whole farm, you can't participate in an in a policy at the cat level either met, correct. I mean, I'm not that one's right.
Shannon Sand:Because it's kind of covered already in the whole farm or no.
Bonnie Lind:No, why they don't want that there. I think,
Shannon Sand:why don't I don't know. I'm just asking a lot of questions.
Bonnie Lind:Because it probably spreads the risk a little better for the insurance companies and for the RMA on these programs to remain actuarially sound and not have ours are participating at a catastrophic coverage level where they could get a premium, I mean, a pretty good payment for $600 fee, and then also get another indemnity or another indemnity under the whole farm because their revenues are down I think, I think they just put a limit on it basically just to keep the coverage up higher. They want growers to participate at higher levels and Really growers who do participate at higher levels, I believe their overall risk management plans are are much better than if they're participating just at the catastrophic coverage level. So,
Shannon Sand:yeah, thank you, Bonnie.
Melelani Oshiro:Thank you both for joining us, I think I've learned a lot. Because I really am. I'm educated, I guess to say in that in that area of insurance, and for me, I'm one of those when it comes to paperwork, I'm just like, oh, gosh, it can get overwhelming, right. But I think it's a matter of one step at a time. But knowing that the application process is something they should definitely, if they're interested to get started is probably where they the first thing they need to do, right? If they are interested in
Bonnie Lind:what the paperwork done for the livestock program, get, get settled into looking at the prices for the endorsement periods, and then and then decide if you want to participate, that doesn't cost you anything to get signed up and to learn how the program works. And they have the policy sitting there waiting for the endorsement to be filled in so and then once they're looking at the markets, then they'll probably get a better idea of how it will or won't work for them. And I think that's kind of the thing they need to do is to get in the habit of looking when the when the prices are released, see what their possible floors are, and then decide if it's going to work for them or not.
Shannon Sand:Very good. Sounds like people have a lot of decision making to happen here exactly like a lot of lot of things to think about.
Bonnie Lind:But they have some risk management tools, how many business people that so I really feel like if it's out there for ag commodities, they should be taking a look at it, if they're in that commodity. There's not not a lot of different professions where you can share your risk like that. And so I really feel like they should participate and take take part in the subsidies, I mean, that are there to help them with the cost of the risk management tools. Nobody should feel backwards about that. There's, they're there for the purpose of keeping American farms and business, including small family communities, farm communities. And so definitely we'd like to see more people participate in at least take a look at what their options are. So they know what the coverage can do for them before they decide they don't want to participate. Yeah, yeah, it doesn't cost anything to ask the questions either.
Shannon Sand:No, that's honestly i i think I'm a big fan of either emailing someone or calling and asking a question, depending on your personal preference. So and if that person doesn't answer your question, call somebody else. Yeah. And I get the answer. You need.
Bonnie Lind:Emails, phone calls are all good. I even I mean, I get a lot of people who don't want to do that. And they just want a text message. And so I'm okay with that. I think most agents respond to text messages Nice. That's the way people communicate these days. So whenever we can do whatever we can do to get the answers to the growers, then you know, I'm willing to do that.
Shannon Sand:That's, that's so good. Thank you so much. So is there anything we missed? Or that like you want to talk about that we haven't talked about today? No,
Bonnie Lind:I can't think of anything. In the area of livestock, I can't think of anything. I think we've covered it pretty well. I really appreciate jackal. And, yeah, thank you for being the expert on this. Because I'm not I can get the answers. I have a direct line to Jacqueline. So
Shannon Sand:that's really nice. Yeah. So much for coming on today. We appreciate it.
Bonnie Lind:Right. You'll know that I'll be working really closely with her. So
Shannon Sand:very good.
Jaqueline Da Rocha:Thanks for inviting me.
Shannon Sand:Yeah.
Melelani Oshiro:Thank you for taking the time. Yeah. Appreciate it. Yeah.
Jaqueline Da Rocha:My passion. So yeah, anytime I can talk about it, or
Shannon Sand:Oh, good. We could bring you on again, we have more questions. A one
Bonnie Lind:hour version, she's probably got a three or four hour version. A lot.
Shannon Sand:Oh, thank you both so much. And we hope our listeners found this information informative, and it will be useful to them. Also, if you have not already done so, please be sure to fill out our feedback fest to let us know your thoughts about this podcast. And so we know what you would like to hear more of in the future. Yeah, make
Melelani Oshiro:sure to follow us on our social media pages and livestock, Palau and livestock extension group. If you haven't already, be sure to visit the UHC tar Extension website and our YouTube channel, which is listed in the show notes.
Shannon Sand:Yeah, and for additional information about this topic, see the show notes of the podcast the description box of the YouTube page. And thank you for listening to the livestock vol out but before we go, the most important thing show some love for your favorite podcast because that's us by the way, by leaving us a review on Apple podcasts or anywhere you listen to this. And then stay tuned for next month's episode.
Melelani Oshiro:Yeah, thanks again to our sponsors the Western X pension risk management education Senator Ross up USDA NIFA the livestock extension group and see tar Mahalo for listening. I'll Louisville Thank you.
Jaqueline Da Rocha:Thank you. Thank you