On crop insurance potentially being the centerpiece of the next farm bill…

“Crop insurance works well in certain parts of the country and no so well in others. Unfortunately, in Louisiana and the Mid-South it doesn’t work quite so well. Maybe it can be strengthened.

“One of my major concerns is the way the yield databases are set up. My own contains some yields from back in 1991, 1993. Those were good yields back then but aren’t reflective of what we’re making today. And they certainly aren’t reflective of today’s input expenses.

“Right now, we just can’t insure the yields we’re growing. We are trending in that direction but aren’t there yet. Maybe we can beef crop insurance up somehow and keep tinkering with it and it’ll be the natural safety net. It needs a lot of work.”

For more on crop insurance, see here.

On farmers visiting the banker with farm bill legislation still in flux…

“There are a lot of concerns and bankers are worried. The uncertainty is scary and has caused them to be hesitant.

“(The Louisiana Cotton and Grain Association) has been in D.C. pushing for a farm bill to be passed in 2012. The main idea is that our bankers and members need to be able to adjust our operations as early as possible.

“Right now, we don’t know if we’re facing an extension (of the current farm bill) or what programs will be in a new farm bill. That uncertainty – along with the fact that farmers need to borrow a lot to run an operation now -- means banks are not facing a good situation.

“I’ve been in D.C. twice in the last two months. You walk in one office and hear ‘well, the farm bill will be extended.’ The next office you visit says ‘we’ll have a farm bill passed in April.’

“No one knows and things are very strange politically. We’re so polarized and not working together like we used to and still need to be.”

On coming EPA Tier 4 requirements for diesel engines…

“Some new EPA emissions standards for off-road diesel engine are about to slap us all in the face. We’re about to switch to a ‘Tier 4’ engines and it will really cost us.  

“Back in 2004, when the rules were set up for the Tier 4 engines to be phased in, the government accounting said it would add about 1 percent to the cost of a diesel engine. Instead, right now, it appears it’ll add about 50 percent to the cost of those engines.

“I’m told the Tier 3 engines are sucking in dirtier air than what they’re spitting back out. If that’s true, I don’t know how that adds up to justification for a 50 percent increase in the cost of Tier 4 engines.

“One of our local dealerships has some Tier 3 irrigation power units for sale at $13,500. They won’t be able to get anymore of those – supply is tight. Everything they get from now on will be Tier 4 and the price for the same engine will go up to $20,000.

“That’s been flying under the radar for years. It’ll hit home pretty quickly and producers need to know it’s coming.”

For more on Tier 4 diesel engines, see here and here.