Crop Insurance Impacts from Recent Flooding
June 20, 2008
Recent flooding in the Corn Belt has created a number of questions related to crop insurance and producer options. As with any disaster, the first issue is the health and well-being of family members. Once it is determined that all are safe, farmers will turn their focus to flooded fields and the insurance issues associated with lost crops.
First, the producers that have been unable to get a crop in the ground at all this spring will be faced with either late planting issues or possibly prevented planting options. The final date for corn planting in eastern Nebraska and Iowa is May 31, while the final date in much of Missouri is June 5. For soybeans, the final planting date in Nebraska and Iowa is June 15, and in most of Missouri it is June 20. For corn we are quickly approaching the end of the late planting period, which exists for 25 days after the final planting date. Soybeans can be planted for another three weeks with a reduction in insurance coverage.
For any crop planted in the late period coverage is reduced by one percent for each day planted after the final planting date up through 25 days. Anything planted after the 25-day, late planting period is uninsurable. For those producers carrying APH, CRC, or RA contracts, prevented planting is an option if the crop cannot be planted due to excess moisture or flooding. The rules for prevented planting are complex, and a visit with your insurance professional is recommended. Those producers who are carrying GRP or GRIP insurance are not eligible for prevented planting payments.
Farmers with a corn crop flooded out in the past several days have several options.
- Take a replant payment on the crop insurance, and plant another corn crop with a short season variety.
- Take a total loss on the crop, leave the field fallow for the summer, and collect a 100% loss payment.
- Take a total loss on the corn crop and plant another crop (soybeans, grain sorghum, etc.) on these acres.
- If another crop is planted, producers will receive an initial indemnity of 35% on the initial corn crop.
- If the second crop planted, such as soybeans, does not have any crop insurance loss (indemnity), the farmer will receive 100% of the corn loss.
- If the second crop, such as soybeans, has a loss, the producer will receive the soybean loss (indemnity), in addition to the 35% from the corn loss.
The rules apply similarly for crop loss due to flooding in soybeans, grain sorghum, wheat, or other insurable crops that were already planted. As with all crop insurance questions, it is important to ask questions and get the rules explained by your crop insurance agent and the crop insurance adjustor before deciding whether to destroy or replant a crop.
Extension Ag Economist