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February 27, 2018

WG Members Can Mitigate Weather Losses with Crop Insurance and Weather Risk Protection

Combined with the lack of precipitation, the seasonably warm February brought an early explosion of blooms for California almond orchards. This, in conjunction with the recent temperature drops to the mid-20’s, is causing widespread havoc throughout the almond-growing regions.

While we know temperatures below 28 degrees Fahrenheit can cause crop loss at full bloom, damage can continue to occur as trees leaf out and nuts begin to develop and sensitivity to cold temperature increases. Although some damage may be apparent, other damage may not appear until later in the season or may not be noticeable until delivery. Damage to crops and impact to agriculture-related industries may continue and these types of adverse weather events could impede profits.

While growers make every effort to offset risk within the orchard with various cultural practices, they may further mitigate risk by taking advantage of risk protection insurance. There are two coverages that apply during a weather crisis: Crop Insurance and Weather Risk.

Crop Insurance has the ability to protect the growing crop. Insurance is provided against the following causes of loss that occur during the insurance period: adverse weather conditions; fire, unless weeds and undergrowth have not been controlled or pruning debris has not been removed from the orchard; insects, but not damage due to insufficient or improper application of pest control measures; plant disease, but not damage due to insufficient or improper application of disease control measures; failure of the irrigation water supply, if caused by an insured peril that occurs during the insurance period. 

In addition to crop insurance, Western Growers Insurance Services offers weather risk to provide compensation to any type of business if it is affected by some defined weather event. This type of coverage can mitigate risks for growing operations and business entities from the effects of adverse weather, lack of demand and price decline. If certain defined conditions occur—such as price decline, wind, excessive rain, lack of rain, freeze, excessive heat or other events—the buyer of the weather risk product will get paid even if they do not incur a loss or suffer no financial loss. This coverage is available to any business, including growers, hullers and processors, fertilizer companies and transportation companies, among others.

With a variety of crop insurance products and services available, WGIS can help your operation evaluate scenarios and design the coverage that’s right for you. If you have any questions or need assistance, feel free to contact me directly at (530) 305-7800 or [email protected]