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May 22, 2019

U.S. Farmers Consider Prevent Plant Options for 2019 Crops

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

As wet weather continues to delay planting across the Corn Belt, some farmers may be considering submitting a claim for "prevent plant" instead of actually planting their intended corn crop. Crop insurance is complicated and each farmer needs to do the calculations for his farm in order to determine if claiming prevent plant is a viable option. Without getting into too much detail (which by the way, I do not know much about), below I have outlined four broad options when it comes to claiming prevent plant. There are more options than this with many variations, but I think these four cover many of the general themes.

If a farmer has not been able to plant his corn crop by the insurance date which varies by region, he/she has basically four options.

  • Option 1 - Submit a claim to the insurance company that he was not able to plant due to excessive wet conditions. Once the claim is accepted, no other crop may be planted on that acreage other than an approved cover crop.
  • Option 2 - A farmer may plant a second crop before the final planting date for the first crop. For example, if a farmer decides to plant soybeans instead of corn before the final planting date for corn, then the soybean crop will be insured instead of the corn crop.
  • Option 3 - Submit a claim for prevent plant for corn and then plant soybeans on those acres. The payment for the corn crop will be reduced and the coverage for the soybeans will also be reduced as well.
  • Option 4 - Plant the original crop during what is called the late-planting period. The late planted period lasts for 25 days after the final planting date for the region. If the crop is planted during this 25-day window, the insurance coverage will decline 1% per day during that period.

The question now is how many acres of corn and soybeans may eventually be claimed as prevent plant? The 5-year average prevent plant for corn is 1.4 million acres. In 2018 there were 0.9 million acres and the worst recent year was 2013 when there were 3.6 million acres of prevent plant for corn.

The 5-year average prevent plant for soybeans is 0.78 million acres. In 2018 there were 0.3 million acres and the worst recent year was 2015 when there were 2.2 million acres of prevent plant soybeans.

If we combine the two crops, there could be 5-6 million acres of prevent plant. If you add in wheat, where the 5-year average is 0.98 million acres, the total could be 6-7 million. These numbers do not include potential abandonment which would occur later in the growing season.

To make the decision on prevent plant even more difficult for farmers, the administration has announced that they intend to do another bailout of American farmers due to the ongoing trade dispute with China. The method by which the payments for low soybean prices are determined could be an incentive or disincentive for farmers to plant soybeans later in June.