WATERLOO, Iowa --- Grain farmers may not be able to control the weather, but they can insure Mother Nature doesn't endanger profits.
A new crop insurance option is available this season to protect future earnings. From planting to harvest, providers say Total Weather Insurance can provide a worry-free year.
WeatherBill, a company based in San Francisco, offers insurance to businesses affected by weather. Policies are designed to supplement federal crop insurance, which typically covers cost of production.
However, Greg Smirin, the company's chief revenue officer, said federal crop insurance doesn't take into account living expenses.
"We're looking to improve on the worst-case scenario. This protects profit exposed to the elements," he said.
Farmers have until March 15 to sign up, and only qualified insurance agents can sell Total Weather Insurance. For information, go to www.weatherbill.com.
Coverage and premiums are based on desired yield --- even if it exceeds the farm's established average --- and on expected profit, location, input costs and federal crop insurance coverage levels. Weather forecasts and grain prices are also taken into consideration.
Premiums are paid after harvest. Pay-outs for bad weather occur automatically during the growing season.
According to WeatherBill's website, a Black Hawk County farmer anticipating 210 bushels of corn per acre this year could get $250 per acre of full coverage. The cost would be about $33 per acre.
Total Weather Insurance protects farmers against drought, excessive rain during planting, cold weather throughout the growing season, heat stress during pollination, a killing freeze before harvest and weather-related harvest delays. Farmers can choose one or all of the options, but the more protection purchased, the greater the cost.
WeatherBill started selling Total Weather Insurance three weeks ago in Iowa. Most premiums range from $25 to $30 per acre, Smirin said.
Kent Kirstein of Sumners Insurance in Clarion said there's a lot of interest. He signed up nearly 20 growers, including some in Northeast Iowa, and is insuring between 10,000 to 15,000 acres.
"It protects profit potential, and it looks like that will be a substantial part this year," Kirstein said.
WeatherBill contends extreme weather events are becoming more frequent, resulting in tens of billions of dollars in losses each year to farmers.
Northeast Iowa growers understand. Too much rain and heat last year reduced average corn yields statewide to 165 bushels per acre compared to 182 in 2009. Hail also damaged crops in 2009, and widespread flooding occurred in 2008.
Kirstein said producers are trying to fill a gap in federal crop insurance.
"Guys aren't frustrated just looking to fill that void," he said.