Prevented planting payment enhancements

Ray Grabanski
Special to the Farm Forum

09/10/19 — Weather forecasts continue to call for mostly above normal temps and normal to above normal precip for most of the Corn Belt. It will be wetter in the northern Corn Belt the next 7 days than the southern half, and the National Weather Service has the forecast warmer and wetter than many private forecasters. Temps are forecast to cool seasonably into mid and late September, but most forecasters still see above normal temps persisting. That’s good for crops, as we need extra time beyond the normal frost date to reach maturity of late season row crops.

News came out Monday 9/10 that prevented planting payments for farmers affected by weather this year will be eligible for an additional 10% of indemnity payments. Note that isn’t another 10% coverage or prevented planting percentage payment. It is simply adding 10% to your indemnity. For example, if you got $300/acre corn prevented planting payments, you could get another 10% of that ($30/acre) from the FSA. If you have the harvest revenue option, you could also get another 5% enhancement of your indemnity payment. Signup begins almost immediately, but many FSA offices may not be ready yet.

For farmers who struggled to plant crops late this spring (even into June for corn), they may now regret not taking an enlarged prevented planting payment instead of planting the crop. In many cases, cobs are small, the soils were too wet all year, and the crop will struggle to make maturity. (And then it’ll cost a fortune to dry down the below average crop this fall.)

Crop progress numbers showed that in spite of relatively warmer weather recently, we still lag normal progress by quite a bit. Corn is only 89% dough (8% behind normal), 55% dented (22% behind normal), and 11% mature (13% behind normal). Also this week corn conditions dropped a huge 3% to only 55% rated G/E, and interesting change for a week of weather that was mostly favorable for the crop. (Are they just admitting ratings were too high?) Soybeans are 92% podding (7% behind normal), with conditions at 55% this week (unchanged from last week). Our yield model for corn dropped 1.7 bushels to 173 bu/acre (a loss of 130 mb of production) on the big drop in conditions. Is this a realization finally that some corn won’t make maturity? Soybean yield models rose a small 0.17 bu/acre to 48.13, still below USDA’s number.

Other crops are not so far behind, with sorghum 97% headed (1% behind normal), 65% coloring (9% behind normal), and 27% mature (10% behind normal), and 22% harvested (2% behind normal). However, sorghum ratings are quite high at 68% G/E, up another 1% this week and well above last year’s 53% rating. Cotton is actually somewhat advanced, with 43% bolls opening (6% ahead of normal) and 7% harvested (1% ahead).

HRS wheat harvest is advancing, now 71% complete (16% behind normal). But quality is a real issue, with both falling numbers and vomitoxin an issue in the harvested grain. Falling numbers are discounted more heavily by the marketplace than the crop insurance allowance in most cases, with crop insurance only discounting from 5-15.5% production from 299 on down to 200 falling numbers. But once you fall below 200 falling numbers, it is a market-based discount for crop insurance.

Vomitoxin is more complicated, but farmers are treated much better with crop insurance discounts than falling numbers. If farmers are discounted for vomitoxin and sell within 30 days of the end of the insurance period, they get a market discount. If unsold, it goes by a chart which is very favorable from 2-10 ppm, with from 22% to 45% reductions in the production to count. In fact, so far it seems the chart is even more favorable than market discounts, so the crop insurance treats vomitoxin much more favorably than falling numbers. With these discounts combined with the 12.5% drop in HRS prices (from $5.77 to $5.05 this fall), there will likely be many HRS wheat claims in spite of yields better than average. If you don’t understand this, give our office a call or email, and we can explain it to you.

Barley harvest is 82% complete (10% behind average), with oat harvest only 89% complete (6% behind normal). Soil moisture levels are still quite high at 67% adequate/surplus topsoil (down 2% this week), and subsoil 70% rated adequate/surplus (down 1% on the week). These are still historically high soil moisture ratings for fall, and now its becoming an issue where many soils might be too wet to support harvest equipment. That could spell lots of problems for harvest, especially root crops like potatoes and sugarbeets. But it’s also difficult to support semis or tandem trucks full of corn, soybeans, or wheat, too. That might make it a difficult fall in areas with excessive rains.