April 27, 2007

Another story in this week's CropWatch, Consider Herbicide Carryover When Recropping Freeze-Damaged Wheat, also addresses factors to consider when making a recropping decision.

Early April brought crop damaging frost across much of Nebraska, with winter wheat being the most susceptible crop at that time. It appears from damage reports that freeze damage ranged from minimal in the western portion of the state to some significant damage in southeast Nebraska. As farmers assess the damage, the alternatives should be discussed. In light of recent prices, producers have a number of alternatives, depending on what region they're in and the amount of crop damage.

If corn is an option, many producers likely will have already looked at this alternative. In many cases, a good wheat crop at today's prices would be competitive with a corn crop on an income basis, but a partially damaged crop may not be as competitive and could lead to wheat being replaced by corn. A reduction of 15-25% in expected wheat yield could trigger replacement by corn in some areas. Recent rains across Nebraska continue to push the planting date back, and may factor into a decision as to plant corn on damaged wheat acres. Another concern will be the availability of corn hybrids that will work in specific areas. Recent reports indicate that while there's enough corn seed for planting, it may be difficult to acquire enough seed for replanting. Moving acreage from wheat to corn at this late date could be considered in the same category as replant acres.

In other areas, wheat may be replaced by either sunflowers or proso millet. Both of these crops have attractive prices at the present time and can still be planted on time. In the Panhandle, insurance adjusters have already been at work on wheat that was lost to either wind damage or winterkill, and most of these acres are slated for proso millet with a few intended for either sunflowers or corn.

For a producer who feels frost damage is critical, insurance adjusters will need to be contacted to make a determination of damage. Although it is difficult to determine the expected yield at this early date, the adjusters will make an estimate. If it is determined that the field is at a level that the producer is not willing to carry on, the crop can be destroyed and the land can either be left idle or another crop can be planted in the remaining residue. If a second crop is planted, it will be eligible for crop insurance as the second crop on the farm unit if it is planted before the final date for that crop.

Producers need to be aware that indemnity for a damaged wheat crop is based on the estimate of yield at this time. If the producer believes that the damage is worse than the adjuster has stated, the other option is to leave a representative strip of the wheat crop growing through harvest and have the adjuster evaluate the damage at that time. This gives the farmer some ability to collect more insurance indemnity if the crop is worse than this early season estimate suggests.

As we continue to move through the 2007 crop season, it appears that the wild ride is nowhere near stopping. In January, we told producers that prices were going to be extremely volatile. Little did we know that corn and wheat planting intentions would be higher than expected, rains would delay planting and frost would damage the wheat crop. We can expect more action in the markets in the weeks and months ahead.

Paul A. Burgener
Agricultural Economics Research Coordinator

Panhandle REC, Scottsbluff