Prevented planting options for crop producers
Farmers can opt to get a prevented planting payment. As an example, assume a farmer has purchased an 80 percent coverage policy and has a actual production history (APH) of 170 bushels per acre. The prevented planting guarantee is 60 percent of the production coverage. So in this example the production coverage is $768 per acre ($5.65 * 170 * 0.8). The prevent plant payment would be 60 percent of this – or $461 per acre. In this case the producer needs to leave the land idle or plant a cover crop. He can’t plant an alternate crop for harvest and receive the full prevent planting payment. The prevented planting acres will not affect the APH.
Farmers can shift the land to another crop, and insure the second crop. If this is the choice the producer is not eligible for a prevented planting payment. The second crop must be planted during the late planting period for corn, i.e. within 25 days after the final planting date. If the second crop is planted after the late planting period, the farmer can get a 35 percent prevented planting payment for the corn, but the planted acres receive a yield equal to 60 percent of the approved yield, which will tend to lower the APH in future years.
If the corn crop was planted, but washed out by flooding or some other problem and it is not practical to replant, the farmer can receive a full indemnity crop insurance payment and the land can be left idle or planted to a second crop that is not insured. Or the producer can plant and insure a second crop and receive a 65 percent reduction in the indemnity for the first crop. If the first crop can be replanted, but is not replanted, no insurance payment is available.
USDA will survey producers in early June about actual acreage, but the survey results will probably still need to be adjusted in later reports. The planting data and current weather suggest that actual corn acreage will fall short of the 97.3 million acres reported in March, but the deviation will probably be relatively small. Our current state-by-state analysis puts corn acreage at 95.7 million acres.
click image to zoom Farmers still have time to plant soybeans with planting often continuing through most of June. The five-year average shows about 10 percent of the crop still to be planted in mid-June, three weeks from the 44 percent reported on Tuesday. However, weather conditions will need to improve in early June for acreage to reach the 77.1 million acres reported in the March Prospective Plantings report. If corn acreage does drop below intentions, soybean acreage could turn out to be even higher than intentions.
There is a real chance that spring wheat acreage will fall short of intentions. As of Sunday, a total of more than 3 million acres remained to be planted. Most of that 3 million acres is in North Dakota where only 62 percent of the crop was in the ground as of last Sunday. The final planting date for spring wheat in North Dakota ranges from May 31 in the South to June 6th in the North. The planting window for sunflowers makes this a viable alternative if farmers can’t get the wheat planted.