Prevented Planting FAQ for 2018

Steve Johnson photoWright, GaryReviewed by Gary Wright, Extension Farm Management Field Specialist, gdwright@iastate.edu

Originally Contributed by Steve Johnson, Extension Farm Management Field Specialist

Question: When is prevented planting available?

Answer: Prevented planting must be due to an insured cause of loss that is general in the surrounding area and that prevents other producers from planting acreage with similar characteristics. Failure to plant when other producers in the area were planting will result in denial of the prevented planting claim.

There’s also the 20/20 Rule–a minimum of 20 acres or 20% of the unit must be affected. Total acres of planted and prevented planted cannot exceed the total cropland acres. Prevented planting claims must be filed with your crop insurance agent by June 28 for corn and July 13 for soybeans. Prevented planting acres must be reported on the FSA Form 578 acreage report. That deadline in Iowa is July 15, 2018.

Question: When is prevented planting not available?

Answer: On ground that is insured through a New Breaking Written Agreement; Conservation Program Reserve land—first year out of CRP; on ground where a pasture or forage crop is in place during the time of planting; when other producers in the area are able to plant; on county-based crop insurance area policies—such as AYP & ARPI.

Question: How much do I get paid for prevented planting?

Answer: 55% of the initial revenue guarantee on corn and 60% on soybeans.

  • For corn, an example of how it’s figured: 190 bushels APH x 80% x $3.96/bu = $602 initial revenue guarantee  x 55% = $331/acre PP payment
  • For soybeans, an example is 55 bushels APH x 80% x $10.16/bu = $447 initial revenue guarantee x 60% = $268/acre PP payment
  • Note that payments for prevented planting use the projected price (new crop futures price average in February).

Question: How are eligible acres for prevented planting determined?

Answer: The insurance company considers each of the insured’s crops in each county. They look at the maximum number of acres reported for insurance and certified in any of the four most recent crop years. The acres must have been planted in one of the last three crop years.

What happens if you are prevented from planting and there are not enough eligible acres for the crop being claimed? When the insured runs out of acreage eligibility for one crop, the remaining prevented planting acres will be “rolled” to another crop, such as corn to soybeans.

Question: What happens to my APH—actual production history– if I take prevented planting?

Answer: The insured farmer who receives prevented planting on a crop does not have to report the actual yield for the year. Generally, prevented planting will not impact the APH yield in future years, unless a second crop is planted on prevented planting acres.

Question: What happens if the first crop is prevented planting, but the second crop is planted?

Answer: If the second crop is planted it MUST be insured if there was insurance for that crop elected on or before March 15, 2018. The second crop must have been planted AFTER June 25 for corn and July 10 for soybeans. If the insured farmer plants a second crop they will still receive 35% of the indemnity for the prevented planting crop and pay only 35% of the premium.

Planting a second crop on prevented planting ground affects the following year’s APH:

  • 1st Crop – you get 60% of the approved yield (190 bu/A APH X 60% = 114 bu/A)
  • 2nd Crop – actual yields are used for APH

Question: What will crop insurance adjusters need to do for prevented planting claims?

Answer: Visually inspect all prevented planting acres to determine:

  • Acres are within 5% of what was on the acreage report
  • Whether the acres are left idle, or whether a cover crop or second crop has been planted
  • What the cause of loss was, and if it is general in the area
  • Determine eligible acres
  • Roll acres to other crops if insured is short of eligible acres for reported prevented planting crop

Question: What are the deadlines for filing prevented planting in Iowa?

Answer: These dates vary by state, but tend to be 3 days after the last day of the late planting period.

  • The deadline for filing prevented planting with your crop insurance agent is June 28 for corn and July 13 for soybeans
  • Acreage reporting deadline is July 16th. (This date is usually July 15th but this year the date falls on a Sunday)
  • Prevented planting acres listed on your acreage report (FSA Form 578) should match the information provided your crop insurance agent in order to qualify for a full indemnity payment
  • Work with your crop insurance agent well in advance of these dates regarding a prevented planting claim and whether a cover crop or a 2nd crop will be planted.

Question: To qualify for enterprise units on my crop insurance policy, I have to have at least the smaller of 20 acres or 20% of my planted acres in two or more different township sections.  If I have to leave some of my acres unplanted (prevented planting), will they still count toward my eligibility for enterprise units?

Answer: Only planted acres are considered when determining eligibility for enterprise units.  For example, a farm with 200 acres each in two sections would normally qualify for enterprise units. However, if fewer than 20 acres are planted in one of the sections, the farm would no longer qualify.  Possible increases in crop insurance premiums due to a change in unit designation should be considered when deciding whether or not to file for a prevented planting claim on some acres.

Question: If I take prevented planting on some of my fields and plant a cover crop, when can I harvest or graze the cover crop?

Answer: If you plant any kind of cover crop and expect to receive a crop insurance indemnity payment for prevented planting, you cannot harvest or graze those acres until after November 1.

ISU Extension Resources

More details can be found in the publication “Delayed and Prevented Planting Provisions” on the Iowa State University Extension and Outreach Ag Decision Maker website. An electronic decision spreadsheet is also available to help analyze alternative actions. Producers should communicate with their crop insurance agent before making decisions about replanting or abandoning acres.

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Chad Hart imageThe first official tour of the nation’s fields this summer resulted in better crop yield and production estimates than the market was expecting. The national corn yield estimate came in at 169.5 bushels per acre, down 1.2 bushels from trend, but that was still a couple of bushels above trade expectations. If realized that points to a 14.15 billion bushel corn crop, which would be the 3rd largest ever, continuing a string of large corn crops. The soybean yield estimate was 49.4 bushels per acre. That is 1.4 bushels above trend and sets up this year’s crop to exceed last year’s. So bushels and bins would continue to overflow with these estimates.

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Pricing drought damaged silage

Contributed by William Edwards, extension economist

Corn that has suffered severe drought damage is sometimes harvested as silage instead of as grain. It can still have significant feed value if harvested at the right stage. See the article “Alternatives for Drought-damaged Corn—Grain Crop or Forage” for harvesting recommendations. Any damaged acres that are covered by crop insurance should be viewed by an adjuster and released by the insurance company before harvesting takes place.

Grain producers may be willing to sell to the corn standing in the field, to be harvested by the livestock producer or a custom operator. The buyer and the seller must agree on a selling price.  The seller would need to receive a price that would give at least as good a return as could be received from harvesting the corn as grain. The buyer would need to pay a price that would not exceed the feeding value of the corn.  Within that range the price can be negotiated.

One ton of normal, mature standing corn silage at 60% to 70% moisture can be valued at about 10 times the price of a bushel of corn. For a $3.50 corn price, a ton of silage would be worth about $35 per ton. However, drought stressed corn may have only 5 bushels of grain per ton of silage instead of the normal 6 to 7 bushels. A value of about 9 times the price of corn would more appropriate. For silage with little grain content, a factor of 8 times the price of corn can be used.

If the crop is sold after being harvested and transported, those costs must be added to that value, typically $5 to $10 per ton, depending on whether it is done by a custom operator or the buyer, and the distance it is hauled. A buyer would only consider the variable costs for harvesting and hauling, whereas a custom operator would need to recover fixed costs, as well.

More information on valuing forage in the field, including an electronic spreadsheet for estimating a value for corn silage, for both the buyer and the seller, is available from Ag Decision Maker.

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