Handle with care: aflatoxin and insurance

Farmers with aflatoxin-infected corn have insurance options as long as they are diligent.

Martin Ross

Published: Aug 13, 2012

Farmers with aflatoxin-infected corn have insurance options as long as they are diligent.

Development of the potentially hazardous mold is a particularly acute threat in this year's drought-stricken corn crop. The impact of high aflatoxin levels varies from corn price discounts to requirements that affected grain be destroyed.

Illinois Farm Bureau risk management specialist Doug Yoder notes quality losses in corn are insurable. But in order to be covered by a federal crop policy, a farmer must notify his agent and/or claims adjuster prior to placing grain in farm or commercial storage.

An adjuster may take hand samples of corn prior to harvest, an insured farmer may harvest representative areas from which the adjuster can obtain samples, or an agent may allow the insured to leave representative sample areas from which an adjuster can collect samples for post-harvest testing.

Because of this year’s heightened risk, Country Financial emphasizes the need for pre-harvest scouting of corn to keep infected grain out of the bin.

“Federal crop insurance does not cover losses occurring in storage,” Yoder stressed. “Testing after grain is placed in storage could result in invalidating claims for aflatoxin.”

Corn containing less than 20 ppb of aflatoxin can be sold as normal grain, is considered safe for human or livestock consumption, and no insurance "quality adjustment" is required at that level.

Any aflatoxin testing for crop insurance purposes must be performed by a “disinterested,” approved testing facility.

An approved facility must be a recognized commercial, government, or university testing lab, including approved facilities at an elevator or other delivery point, but it cannot be involved in buying or selling grain to be tested, unless USDA’s Risk Management Agency provides a waiver.

Recommended aflatoxin limits for feeding are no more than 20 ppb for dairy animals; 100 ppb for breeding cattle, breeding swine, and mature poultry; 200 ppb for finishing swine over 100 pounds; and 300 ppb for finishing cattle.

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