A wet spring has hindered spring planting in many areas, with 30% of Nebraska’s corn acres still not planted as of Monday. This article will review the crop insurance deadlines for corn including the final planting date and late planting period, and highlight some considerations as you decide what to do with unplanted corn acres.
Prevented Planting, Final Planting Dates and Late Planting Dates
Farmers who do not have corn planted by the final planting date, May 25, or by the end of the late-planting period, June 14, may be eligible for prevented planting payments.
Prevented planting payments are available for both revenue and yield protection policies, but not for Area Risk Protection Insurance. Prevented planting eligibility will be determined on a case-by-case basis. Area factors also will be considered. The cause of the loss must also prevent neighbors from planting. It is unlikely that a producer would qualify for prevented planting when all of one’s neighbors were able to finish planting.
According to the Risk Management Agency, “Prevented planting is the failure to plant the insured crop by the final planting date designated in the Special Provisions for the insured crop in the county, or within any applicable late planting period, due to an insured cause of loss that is general to the surrounding area and that prevents other producers from planting acreage with similar characteristics. Failure to plant because of uninsured causes such as lack of proper equipment or labor to plant acreage, or use of a particular production method, is not considered prevented planting.”
Example of an estimated prevented planting payment calculation:
A farm has a Revenue Protection policy with a 75% coverage level. The 2019 projected price for corn is $4 per bushel. A farm with a 200-bushel Actual Production History (APH) would be guaranteed $600 per acre (200 bushels X 75% X $4). If the farm qualified for a prevented planting pay—ment, the payment would be $330 per acre ($600 X 55%).
Regardless of the reason you are claiming prevented planting, keep detailed records of the event. Records include pictures of the damage and any seed/chemical/fertilizer orders that were in place to show original intention to plant the acres.
The prevented planting payment is 55% of the guarantee for corn.
If you are prevented from planting, and you do not intend to plant the crop during the late planting period, you need to provide notice to your insurance agent within 72 hours after the final planting date.
Planting Corn During the Late Planting period
Farmers can plant corn after the final planting date, during the late planting period, and still receive crop insurance coverage. However, the crop insurance coverage will be reduced 1% per day after the final planting date (May 25), for 20 days (the late planting period). You are not obligated to plant in the late planting period.
If you plant during the late planting period, you are not eligible for prevented planting payment.
If you determine you cannot plant or do not intend to plant during the late planting period, you need to provide notice to your insurance agent within 72 hours.
Considerations for 2019
Leave ground idle. After notifying your crop insurance of a prevented planting situation, you can leave the ground idle until the following crop year.
Plant a different crop. You can plant another crop on ground which you have claimed prevented planting for corn. However, this may affect the crop insurance prevented planting payment for corn. Talk to your crop insurance agent about the implications of planting a different crop.
Plant a cover crop. A cover crop can also be planted on acres declared as prevented planting. However, to receive the full prevented planting payment, the cover crop cannot be grazed, cut for silage (haylage or baleage), or hayed before September 1 or otherwise harvested at any time. (On June 20, 2019, RMA changed this deadline from November 1 to September 1.) If the cover crop is planted during the late planting period and grazed, cut for silage (haylage or baleage), or hayed before September 1, no prevented planting payment will be made. If the cover crop is planted after the late planting period and grazed, cut for silage (haylage or baleage), or hayed before September 1, you will receive 35% of the prevented planting payment.
This information is designed to support and help clarify existing crop insurance policy provisions and procedures. For more detailed information on prevented planning, and options you may have, please consult a crop insurance agent. (June 3, 2019)
Trade Aid
On May 21, 2019 news stories suggested that the administration is considering a $2 per bushel soybean payment and a $0.04 per bushel corn payment. If this news turns out to be true, and the payment is linked to acreage, then expect market prices to adjust accordingly. The substantially higher soybean payment over the corn payment can result in producers who are having difficulty planting corn to shift acres to soybeans. This would further drop the soybean market price due to additional production, while possibly providing support to the corn market. If you can shift acres from corn to soybeans and are considering doing this, then consider forward contracts on a portion of those new soybean acres due to the potential impacts on already large soybean stocks.
