Crop insurance a key component of many farmers’ finances

Brenna Wiegand/For the Capital Press Citizens Bank Executive Vice President and Chief Lending Officer Steve Terjeson pays a visit to Silverton Branch Manager Milla Eubank.

With the 2014 Farm Bill ending direct payments, crop insurance has become the main tool remaining to help farmers manage risk and live to fight another day when Mother Nature and other forces deal them a tough hand.

Steve Terjeson is executive vice president and chief lending officer of Citizens Bank, headquartered in Corvallis. He grew up in Eastern Oregon, where crop insurance is a matter of course.

“With the rainfall and soils in the Willamette Valley you can usually produce a pretty good crop,” Terjeson said. “This year was a good example of a fairly down year; there was some light grass seed yield that we saw. In other years it might be wheat that’s down.”

Last year U.S. farmers spent roughly $3.8 billion on crop insurance premiums. Those policies protected 128 different types of crops planted on 295 million acres valued at more than $129 billion.

“The evolution to crop insurance has effectively moved risk management away from the public sector, funded exclusively by taxpayer dollars, toward the private sector, where farmers and crop insurance companies help shoulder part of the cost of natural disasters,” Northwest Farmers Union President Kent Wright said in a recent opinion piece published in the Capital Press. “This takes taxpayers off the hook for the entire bill when disaster strikes and is good for farmers who must always keep their risk management plan in mind, and good for rural America because farmers are the engines that generate economic activity.”

Terjeson revisits the subject of crop insurance in annual reviews with clients.

“Is it worth buying that insurance?” he asks. “Are you well-diversified or are you depending on one crop? Each farmer’s a little bit different.”

The degree to which a farm is affected by crop failures, markets and the economy may be foretold in their balance sheet, said Brian Field, founder and president of Harvest Capital in Canby, Oregon.

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