Many farmers are concerned about the cool spring weather and cold soil temperatures.
Usually, farmers have started planting by now. Hopefully, the weather will warm up and planting will progress.
Farmers have started to discuss prevented planting. As the planting season goes on, farmers will have to decide whether to plant or not to plant.
Final planting dates for corn producers are May 25(northern Minnesota) and May 31 (southern Minnesota). June 10 is the final planting date for soybeans for the whole state. If you decide not to plant, there is a formula to use to determine your prevented planting rate.
There is a simple payment rate of $5.90 multiplied by your APH and your insured percentage multiplied by 55% to get your prevented planting rate for corn.
For example, 85% coverage is $5.90 *180 bushels (APH)*.85 *.55=$496.49per acre payment less premium. For soybeans: $14.33*50 bushels (APH)*.85 *.60=$365.42per acre payment less premium. For every day after your final planting date, your coverage declines by 1%.
If you planted corn on June 9, your coverage level would decrease by 9% from 85%coverage to $5.90*180 *.85=$902.70, to $5.90 *180 *.85 *.91=$821.46, with crop yield potential expected to be lower by at least 36 bushels to 144 bushels. Selling these bushels for $7.15 cash in the fall would gross $1,029.60 and there would be no crop insurance payment. There would also be higher drying costs and lighter test weights with this example. If you decide to plant soybeans on June 15, your coverage will go down by 5%.
Your coverage would drop from $14.33 *50 bushels *.85=$609.03 to $14.33 *50 *.85 *.95=$578.57. What will your actual yield project be on June 15? Less than 35 bushels? Thirty-five bushels at $14.64 or a total of $512.40 per acre. There would be an insurance payment in this example of over $66.17 per acre with total costs per acre projected at $551per acre. If a farmer chooses the prevented plant option, the yield used for their APH will not be affected unless a second crop is planted. The yield used for 2022 would be 55%of farm corn APH and 60% of soybean APH. The current fall prices available show a farmer would be able to cover their cost by planting, even past the final planting date.
There is a spreadsheet that shows the impacts on income based on several scenarios at:
Search Extension’s website for more information. Go to extension.umn.edu and type prevented planting in the search box.