The TSWV is currently causing problems for tobacco growers. Some are seeing what looks like heavy early losses from the virus with no positive outlook for recovery.

Most tobacco growers insure their crop for losses. Hail insurance covers losses from hail. Multi-Peril insurance covers losses of all sorts, and the TSWV is a bona fide cause of reduced yield. How much is the insurance coverage worth?

It insures some level of tobacco production. Production can be insured for 50% to 75% of a farm's established yield, in 5% increments. A producer with (for example) a 2,200 pound established yield can insure for:

2,200 lbs. x 50% = 1,100 lbs, up to,

2,200 lbs. x 75% = 1,650 lbs.

If the yield drops below this level of coverage, the insurance pays for pounds below the insured level at some market price. If, for example, a producer insures the crop at 75% coverage (1,650 pounds) and harvests only 1,400 pounds, then the insurance will pay for 250 pounds (1,650 lbs. less 1,400 lbs.).

 What if the losses appear to be high at this stage of the crop?

The grower should get an insurance adjuster to look at the crop and do a plant count. The appraisal can only determine the current percent of infected plants, but it cannot show how the uninfected plants will grow for the remainder of the season. While the visual inspection may show that (for example) 50% of the plants are infected, it does not indicate how they (or the uninfected plants) will grow for the remainder of the growing season. It can only show their current condition.

Some growers are wanting to know if they should abandon a crop at this time. They see what appears to be a high infestation, and fear the crop is not worth trying to salvage. As it is still 3-4 weeks to the start of harvest, and prior to sucker control. We estimate the grower currently has $600-$700 invested per acre.

The following is one example of how to evaluate current conditions.

If an early appraisal indicates a high percentage of loss, and that crop is released, the remaining plants must be destroyed if an insurance claim is received.

It shows that (with a 50% loss), the insurance returns would cover the sunk costs only if the grower had 75% of yield coverage, should the crop be abandoned at this time.

 What if the Infestation is Less than 50%?

A current appraisal of (say) 40% infection and loss would indicate a potential yield of 1,320 pounds. This may be worth trying to save. But to continue production until harvest time would involve another $200 - $250 outlays with no assurance of any yield potential increase over this time period. But make sure we take care of the crop in a recommended manner. Failure to perform recommended practices for sucker control might indicate a lack of mismanagement to the appraiser.

 The Alternative of Staying With the Crop

Let=s assume the outlook is to lose 50% of the tobacco crop. With a 2,200 lb. expected yield, this means we lose 1,100 pounds, but still have the opportunity to harvest 1,100 lbs. of tobacco.

Continuing with sucker control and insect control will add another $200 - $250 per acre costs. Harvest costs for a partial crop will be less than for a full crop. Curing costs will be unchanged on a per barn basis, but will be less on a per acre basis of partial yield as will labor costs.

We estimate sucker control and harvest of a partial crop will add approximately $1,000 per acre to the costs. Total cash costs incurred through marketing should approximate around $1,700. The tobacco grades will likely be of lesser quality, meaning a lower price for the tobacco. A look at the possible costs and returns can be shown below.

Call an adjuster and have them estimate your losses. They will have your established yield and your coverage level. This will help you come up with an estimate of insurance payments in the event you decide to abandon the crop at this production stage.

If you don't like the estimate made by the adjuster, just remember they don't have a crystal ball. They have no way of determining what the final yield might be if the tobacco is left in place. They can only evaluate what they currently see -- how many plants are still standing and/or uninfected.

The current problem is real. Make sure you take all steps to help you decide what route is best for you.