Prevented Planting Not an Easy Decision for Farmers

DTN Ag Policy Editor Chris Clayton reported this week that, “Leading into USDA’s Crop Progress report on Monday, May 13, roughly 79 million acres of soybeans and more than 71 million acres of corn were unplanted. Rains and cold weather hampered planting throughout major corn and soybean states this past week.

“Already, there are a lot of questions about how much acreage won’t be planted this spring because of widespread flooding. At the end of March, the data group Gro Intelligence estimated for Reuters that more than 1 million acres were flooded across nine states for at least seven dates in March.”

The article stated that, “While this year’s wet spring might look comparable to 2013, the payments for prevented-planting insurance have changed quite a bit, said Steve Johnson, a farm management specialist at Iowa State University. The coverage level is now lower for corn, and the price protection is also dramatically lower now.

“‘This is a different game for 2019 because the revenue guarantee is so much lower for corn and soybeans than it has been in recent history,’ Johnson said. ‘So the reality of prevent-plant is much different than it was. That’s why I don’t think it will be as big a deal as 2013 because of the financial constraints on a lot of these farms right now.’

Johnson cautions producers to push a pencil and have a long talk with their crop-insurance agent about their specific policies before making any decision. If they haven’t already, farmers should be photographing the damage to their fields.”

University of Illinois extension provided a more detailed analysis of prevent planted issues in an update yesterday titled, “Prevented Planting Decision for Corn in the Midwest.”

The update noted in part that, “Prevented planting decisions are always difficult, but market and policy dynamics make 2019 decisions even more difficult.  Given no MFP-like payments, our analysis suggests that prevented planting has the highest expected return relative to planting corn or planting soybeans.  An individual’s situation will matter.  In particular, planting may be more economical if some of the inputs, especially fertilizer on corn, have already been applied.

An individual’s expectation on another round of aid similar to last year’s MFP payments also will influence planting decisions.  Press reports suggest that aid is being considered and that aid will be larger than last year.  If this aid is targeted to 2019 production, incentives will be reduced to take prevented planting payments.”

The DTN article also pointed out that, “More details on prevented planting can be found at… and…

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