Wet weather, planting: Preventative plant coverage

Seems like we can­not break this weather pat­tern. With fore­cast­ers call­ing for more wet weather next week, farm­ers are start­ing to think about the pre­ven­ta­tive plant­ing pro­vi­sions in their crop insur­ance poli­cies. Although most crop insur­ance poli­cies have some pre­ven­ta­tive plant pro­vi­sion, nei­ther GRP nor GRIP poli­cies have pre­ven­ta­tive plant cov­er­age, so check with your agent. One good thing is that we have a few choices, and farm­ers don’t have to rush into any deci­sions but need to be aware of their options before get­ting too busy when we can get back in the fields. The tar­get date for corn to be planted is June 5th and farm­ers can either take pre­ven­ta­tive plant­ing, switch to another crop, or still plant corn with a reduc­tion in coverage.

Many farm­ers have already locked in favor­able con­tract prices for their corn and will need to plant some corn to ful­fill those con­tracts, if they have not done so already. So, claim­ing pre­ven­ta­tive plant­ing wouldn’t be their first choice in 2011. But accord­ing to Chris Bruy­nis, assis­tant pro­fes­sor and exten­sion edu­ca­tor, if farm­ers choose to take pre­ven­ta­tive plant they will need either 20 per­cent or 20 acres of a unit, whichever is smaller, to have not been planted this year. Exam­ple: a farmer has 400 acres of corn insured, 20 per­cent of 400 would be 80 acres and since 20 acres is smaller, there would need to be at least 20 acres of pre­ven­ta­tive plant in order to file a claim. The max­i­mum num­bers of acres that a farmer can claim is equal to or less than the high­est num­ber of acres of that crop planted in the past four grow­ing sea­sons less the acres planted this year. Exam­ple: a farmer had 380 acres in 2007, 120 acres in 2008, 400 in 2009, and 340 acres in 2010 of corn. This year he is able to plant 200 acres of corn. He can claim 200 acres of pre­ven­ta­tive plant, 400 acres is the great­est num­ber of acres planted in the past four years less 200 acres he planted this year.

Bruy­nis says if pre­ven­ta­tive plant is cho­sen the farmer’s his­tor­i­cal aver­age will not be harmed. You will be eli­gi­ble for 60 per­cent of your guar­an­tee per acre. How­ever if pre­ven­ta­tive plant­ing is cho­sen and you plan to fol­low with another crop in 2011, you will have to wait until the end of the late plant period for corn, July 1 and your pre­vented plant claim would be reduced to 35 per­cent of your cov­er­age and only 35 per­cent of your pre­mium would be due. A pro­duc­tion of 60 per­cent of your corn’s his­tor­i­cal aver­age will be recorded reduc­ing your his­tor­i­cal aver­ages. If the farm plants soy­beans after the pre­ven­ta­tive plant date expires, he will also need insured the soy­beans, how­ever it will result in a reduced cov­er­age as July 1 is 11 days into the late plant period for beans. A pre­ven­ta­tive plant claim must be filed within 72 hours of the final plant date which is June 5th for corn and June 20th for soy­beans or within the late plant period for the crop. Basi­cally, the claim should be filed as soon as the deci­sion is made not to plant a crop on the affected acres after the final plant date has passed for the crop.

The most com­mon option is sim­ply switch­ing to another crop. Here in Ohio, most farm­ers will switch those pre­ven­ta­tive plant acres to soy­beans. This will be influ­enced by many fac­tors includ­ing con­tracted corn bushels, her­bi­cides already applied, avail­abil­ity of soy­bean seed, mar­ket price of soy­beans and plant­ing date.

A final option is to sim­ply wait it out and plant corn after the June 5th pre­ven­ta­tive plant­ing date. The late plant­ing win­dow that opens after June 5 allows for corn to be planted but with a reduc­tion in cov­er­age level. Bruy­nis says that each day after June 5 will result in the affected acres being reduced by 1 per­cent of your cho­sen cov­er­age lev­els. Exam­ple: if a 50 acre field did not get planted until June 10 then the cov­er­age will be reduced on those acres by 5 per­cent. If a farmer pur­chases cov­er­age that would result in a $600 pay­ment per acre, the pre­mium will remain unchanged and the cov­er­age would become $570 per acre in this sce­nario. If a farmer chooses this option and then can­not plant corn he can still file a pre­ven­ta­tive plant claim as long as it is still within the late plant period (until July 1).

To explore your options you should con­tact your insur­ance agent for spe­cific rules asso­ci­ated with your insur­ance coverage.

Rob Leeds is an OSU Exten­sion educator.

Posted by Rob Leeds on May 28 2011. You can follow any responses to this entry through the RSS Feed. Comments can be made below.