Do I need a new ball mount? ( See picture )

Depends on how often you use the trailer and your speed. If you only use it occasionally and your speed is low, I wouldn't worry about it. If you use it a lot, go on a long trip, or spend some time at highway speeds and I'd drop the ball until the trailer is level.

i'm with quartz. ideally you want to be level or have the nose pointed down slightly. if it's infrequent and low weights though... you'd probably be okay.

go to harbor freight and buy a 5" drop for like 15 - 20 dollars....I would NOT tow a lot with one from harbor freight but for that little trailer you will be fine.