Corn and soybean yields have been better than expected for many farmers in Iowa for 2023, but for many farmers who were caught in the drought areas, reduced yields plus the reduced Fall harvest insurance price for both corn and soybeans may trigger crop insurance payments.
A farmer who uses the cash accounting method may elect to postpone reporting insurance proceeds on damaged crops from the year of damage to the following year if 50% or more of the crop is normally sold the year following production. This is determined on a crop-by-crop basis.
Read the full article from Charles Brown, extension farm management specialist, in this month’s Ag Decision Maker newsletter, https://www.extension.iastate.edu/agdm/articles/brown/BroNov23.html.
For 2023 corn, USDA raised its yield estimate by 1.9 bushels per acre (to 174.9 bushels per acre; Iowa’s estimate came in at 200, up a bushel). The yield change pushed production up by 170 million bushels. Feed usage was increased by 50 million bushels, as were exports, along with a 25 million bushel bump for ethanol. Thus, 2023-24 ending stocks increased by only 45 million bushels. Given the larger stocks, USDA decreased its 2023-24 season average price to $4.85 per bushel (down 10 cents).
For 2023 soybeans, USDA raised its yield estimate by 0.3 bushels per acre (to 49.9 bushels per acre; Iowa’s estimate remains at 58). The soybean production estimate rose by 25 million bushels. Seed and residual usage was decreased by less than 1 million bushels. There were no other changes to soy usage. So 2023-24 ending stocks increased by 25 million bushels to 245 million. USDA maintained its 2023-24 season average price at $12.90 per bushel.
For the 2024 crops, USDA has lower corn planting, higher soy planting, continuing struggles to boost usage leading to higher ending stocks, and lower prices across the board.
The Rainfall Index – Pasture, Rangeland, Forage (PRF) Insurance policy is an area-based insurance plan that covers perennial pasture, rangeland, or forage used to feed livestock. It provides producers a risk management tool to cover forage losses due to lack of the precipitation needed to produce forage for their operation. The coverage is based on precipitation expected during specific intervals and is not design to insure against ongoing or severe drought. This policy is available for all counties in Iowa.
United States Department of Agriculture Risk Management Agency (RMA) offers seven livestock plans and an annual forage insurance plan. Talk to your crop insurance agent to help you decide the option that is right for your operation, or use the Agent Locator to find one near you.
A common misconception in farm estate and succession planning is that an estate plan is only used after an individual passes away, when in fact, a comprehensive estate plan considers long-term care needs, health care directives, and more. The October Ag Decision Maker article and replay of our recent Women Managing Farmland webinar provides further insight on End-of-Life Taxes and Expenses, both provided by by Kitt Tovar Jensen, staff attorney for the Center for Agricultural Law and Taxation and Beginning Farmer Center coordinator.