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Flood damaged crops, crop insurance payments, and lease contracts

William Edwards, retired extension economist, on issues from flooding regarding crop insurance, rented acres and looking ahead to 2017.

edwardswm_finalSome Iowa corn and soybean producers are facing substantial if not complete crop losses due to flooding. Fortunately, nearly 90 percent of Iowa’s corn and soybean acres are protected by Multiple Peril Crop Insurance (MPCI).

Crop insurance

Most Iowa producers purchase crop insurance policies with a 75 to 85 percent level of coverage. This means that if crops are a total loss, the producer must withstand the first 15 to 25 percent of the loss. However, in 2016 nearly 90 percent of the crop acres insured in Iowa were covered under Revenue Protection policies, which offer an increasing guarantee if prices increase between February and October. So far, this has added about $.80 per bushel to soybean guarantees, while the current corn futures price is actually below the February average. Moreover, since Revenue Protection (RP) policies are settled at the average nearby futures price during the month of October, rather than local cash prices, farmers receive a bonus equal to the fall grain basis in their area.

Producers with crops that have been totally destroyed by flooding will not have to incur the variable costs of harvesting. This could save around $20 per acre for soybeans and perhaps $50 per acre for corn, depending on potential yields and drying costs. Nevertheless, even producers who carried insurance at a high coverage level could be looking at net revenues near or below those obtained from normal yields this year.

2016 flooded bean field

Potential losses

For example, assume an insured tract has an expected corn yield and insurance proven yield of 175 bushels per acre. A normal crop marketed at $3.00 per bushel would bring $525 per acre. The insurance indemnity payment for an 80 percent RP guarantee, zero yield, and a February futures price of $3.86 would equal 175 bu. x $3.86 x 80% = $540. Saving $50 in harvest costs would give an equivalent of $590 per acre, or $65 above the value of a normal crop.

For soybeans, assume both the expected yield and the proven yield are 60 bushels per acre, and the crop could be marketed at $9.00 per bushel. Gross income for a normal crop would be $540 per acre. The insurance payment for a complete crop failure and a $9.65 October futures price would be 60 bu. x $9.65 x 80% = $463. Savings of $20 in harvesting costs brings the equivalent of $483 per acre, or $57 below the value of a normal crop.

In many cases, of course, flooded acres will make up only a portion of the insured unit, so production from non-flooded acres will be averaged in with the zero yields from the flooded acres.

The real question is how much will it cost to clean up fields and bring them back into production next year? Most Iowa farmers have not had experience with fields being under water for extended periods of time, so effects are difficult to estimate. Problems will range from physically removing debris to leveling eroded areas to restoring fertility.

Flooded field, 2016

Rental contracts

What do these questions imply for rental contracts? A great deal of uncertainty, for one thing. Lease agreements in Iowa continue in effect for another year under the same terms if they were not terminated on or before September 1.

Landowners will have to bear the burden of mitigating flood damages – that goes with owning property. But, a better solution may be for renters and owners to work together to repair the damage and bring the land back into production. Farm operators may have access to machinery that can help accomplish the job that owners do not. In return, tenants should be compensated for their efforts, either directly, through a significant discount on the 2017 rent, or with a long-term lease.

Next year

In some cases there may be doubt as to whether land flooded this year can even be planted next year. Risk Management Agency rules state that land must be physically available for planting to be insurable. Land that cannot be planted due to weather events that occurred before the sales closing date (March 15 in Iowa) is not eligible for prevented planting payments. When operators report their 2016 production, they can request that their 2016 yield histories reflect a value equal to 60 percent of the county “T-yield” rather than a zero or very low yield.

Close communication and cooperation between owners, crop insurance agents and renters can be a “win-win” strategy in the long run, but recovery may take several years.

Additional information about managing flood damaged cropland will be available from Iowa State University Extension and Outreach as the waters recede and the situation is assessed. Keep in mind, dealing with issues from flooding can be stressful. Reach out to resources such as the Iowa Concern Hotline, with trained staff who are available to listen.

Iowa Concern –All calls, chats, and emails are free and confidential. Language interpretation available.

  • 24/7 Phone Support – Trained staff take your calls via a toll-free hotline at 1-800-447-1985.
  • Live Chat Services – Live chat for online, one-on-one support.
  • Email an Expert – Send your questions related to legal issues, finance, stress and crisis or disaster to our staff.

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2014 Farm Bill: Noninsured Crop Disaster Assistance Program

Contributed by Kristen SchulteFarm Business Management Specialist, Iowa State University Extension and Outreach, kschulte@iastate.edu, 563-547-3001

schultek_finalThe 2014 Farm Bill extended the Noninsured Crop Disaster Assistance Program (NAP), and the program expanded its coverage by allowing producers to purchase additional coverage. Producers have the opportunity to make this change for policies set for the 2015 crop year until January 15th, 2015.

What does NAP cover?

  • Crops (not livestock) that are commercially produced for food and fiber for which catastrophic coverage under Federal Crop Insurance is not available.
  • Losses due to damaging weather (drought, hurricane, freeze, etc.), adverse natural occurrences (volcanic eruption, flood, etc), and other adverse natural occurrences (ex. excessive heat, insect infestation, ect.).

Signing up for NAP?

  • Producers must apply by application closing date; application is completed with form CCC-471. Application closing dates may vary by crop.
  • To be eligible for NAP, producers must report crop type and variety, location of acres, producers and related shares of crop, growing practice, crop planting date, and intended use of crop commodity. After planting or harvest, producers must also report acres planted, quantity of harvest, and disposition of crop. Production records may be required by FSA.
  • Application must also include service fee. Service fee is $250 per crop or $750 per producer per administrative county. Premiums are also due if electing buy-up coverage.
  • Beginning, limited resource, and traditional underserved farmers are eligible for a waiver of the service fee and 50% premium reduction (file form CCC-860).

What are the NAP coverage levels?

  • Catastrophic Coverage (CAT) covers losses greater than 50 percent at 55 percent of the commodity price.
  • Additional coverage, with premium, is available from 50 to 65 percent in 5 percent increments for production loss at 100 percent of average market price.
  • Premiums for additional coverage is equivalent to 5.25 percent of calculated crop covered value (accounts for share of crop, eligible acres, approved yield, coverage level, and average market price)

Crop losses and NAP?

  • When a loss occurs, notify the FSA office within 15 days of the natural disaster occurrence, prevented planting due to natural influences, date damage is apparent, or normal harvest date (whichever date comes first).
  • For hand-harvested crops that require a timely assessment of loss before deterioration, notify FSA of losses within 72 hours for certain crops.
  • Losses must be verified by the producer by completing form CCC-576, additional documentation/evidence may apply.
  • Average market values are used. At the state level, FSA may set separate market prices for a crop based on represented farming practices or sales to different markets within the state.
  • Retroactive pay for 2012 NAP assistance is available for losses to fruit crops (trees or bushes) in counties that had Secretarial disaster designations due to frost or freeze are available.

Additional Information

  • Grazed acres can only participate in NAP at the CAT level; however, these acres can only participate in either NAP or Livestock Forage Disaster Assistance Program
  • Annually, payments are limited to $125,000 per individual or entity.
  • Additional information can be found at fsa.usda.gov/nap.
  • A decision tool is available through FSA and collaborating universities, http://fsa.usapas.com/

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New Guidelines for Cover Crop Termination Affects Crop Insurance

Contributed by Steven D. JohnsonFarm Management Specialist, Iowa State University Extension, sdjohns@iastate.edu, 515-957-5790

Johnson_Steve_sm

If you planted a cover crop last fall and need to terminate it this spring in fields that will be planted to corn or soybeans, when should you kill the cover crop? Timing for termination of a cover crop can affect whether the crop insurance coverage attaches for the corn and soybean crop yet to be planted.

The USDA’s Risk Management Agency (RMA) has issued new guidelines for cover crop termination in 2014 that are slightly different from last year.  RMA officials made these changes after meeting with officials from USDA’s Natural Resources Conservation Service (NRCS) and the Farm Service Agency (FSA). Through the interagency working group a consistent and flexible cover crop policy can be applied across all USDA agencies.

With the new guidelines farmers can hopefully obtain the conservation benefits of cover crops while minimizing risk of reducing yield to the following crop due to soil water use.

The NRCS Guidelines for 2014 use four strategic management zones across the nation. Iowa has two of those zones. As the accompanying map shows, about a third of Iowa (western portion) is in Zone 3, while the rest of Iowa is in Zone 4.

If you are in Zone 3, you must terminate the cover crop at or before planting the subsequent crop, which is likely corn or soybeans. In Zone 4, the rest of Iowa, you must terminate the cover crop at or within 5 days after planting the subsequent crop if you want the subsequent crop to be insured.

cover crop termination zones 2014

Termination is not about a date; it’s about when you are going to plant the subsequent corn or soybean crop.  The cover crop, if it is not 100% destroyed, will compete with corn or soybeans for moisture in the soil. That’s the reason for the different zones.

Termination means growth has ended for 100% of the cover crop in the field. These NRCS Guidelines basically state that you have to terminate growth of the cover crop before crop insurance coverage attaches to the corn or soybean crop you plant in that field.

You can still graze or hay a cover crop, but crop insurance will not attach to the crop following a cover crop if termination of the cover crop is not done according to these new guidelines. The key is you want to kill the cover crop if you want the crop insurance coverage to attach. Contact your crop insurance agent if you have questions. The 2014 Cover Crops Crop Insurance and NRCS Cover Crop Termination Guidelines FAQs are at: http://www.rma.usda.gov/help/faq/covercrops2014.html.

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Final Harvest Prices for Crop Insurance Determined

Contributed by Steve Johnson, Extension Farm Management Field Specialist, sdjohns@iastate.edu.

Johnson_Steve_smHarvest prices determined in the month of October appear to be $4.39 per bushel for corn and $12.87 per bushel for soybeans. These are the average futures prices for December CME corn and November CME soybean contracts in the month of October. These final numbers are still to be verified by the USDA Risk Management Agency (RMA).

This and the farm’s actual 2013 yields are the final pieces in determining the potential crop insurance indemnity claim for both corn and soybeans. Those final harvest prices suggest that crop insurance revenue policies on corn will trigger indemnity payments this year. This is especially true if the insured purchased a revenue policy at higher levels of coverage (80 or 85 percent). Farmers experiencing yields below their Actual Production History (APH) should keep good production records and report these to their crop insurance agent immediately upon completion of harvest.

It would take a significant drop in yields to trigger such an indemnity payment. For corn, the harvest price dropped by more than 22 percent from the projected price of $5.65 per bushel determined in February. Since revenue protection coverage guarantees yield times price, those higher levels of coverage will trigger if the actual harvest yields falls below the insured’s APH.

For soybeans, the harvest price is exactly the same at the projected price, $12.87 per bushel. That’s the average settlement price of the November CME soybean futures contract during February. To trigger an indemnity payment in soybeans, the actual yield will need to fall at least 15 percent below the APH for an 85 percent level of coverage. So a substantial yield loss on soybeans will have to occur before crop insurance indemnity payments would be triggered.

Since corn and soybean yields will vary across farms and many insureds use enterprise unit coverage, crop insurance indemnity payments will also vary. A farmer should contact their crop insurance agent with their estimated yields to determine the potential for an indemnity claim. Keep good production records and report the final production immediately upon completion of harvest. This will help expedite an indemnity claim for 2013 and help determine the APH for 2014 crop insurance decisions.

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Estimating Crop Insurance Indemnity Payments

Contributed by Steve Johnson, Extension Farm Management Field Specialist, sdjohns@iastate.edu.

Johnson_Steve_smHarvest prices determined in October will have a large impact on the size of the potential crop insurance indemnity payments for corn and soybeans. Current futures prices suggest that crop insurance revenue policies on corn will make indemnity payments on some farms, particularly those that purchased revenue policies at high coverage levels and are experiencing yields below their Actual Production History (APH). In Iowa, there’s a better chance for insurance indemnity payments on corn than there is for soybeans this fall. It would likely take a significant drop in soybean yields to likely trigger such a payment.

Crop Insurance Indemnity Payments

The 2013 projected price for corn is $5.65 per bushel. That’s the average settlement price of the December Chicago Mercantile Exchange (CME) corn futures contract during February. This projected price is used to set crop insurance guarantees and the premium paid by farmers. The harvest price is used to calculate revenue on which crop insurance indemnity payments are based. The harvest price for corn equals the average of settlement prices of the December CME corn futures contract during October. Settlement prices during the first 10 days of October suggest a harvest price of $4.40 per bushel. The final harvest price can vary before the end of the month, but this number provides a good starting point for evaluating corn payments.

An estimate of a $4.40 harvest price is 78% of the $5.65 projected price ($4.40 harvest price divided by $5.65 projected price = 78%). If actual yield equals the guarantee yield on revenue polices of an 80% level or greater coverage levels, it will likely trigger an indemnity payment. So an actual yield that falls 22% or more below the APH should command attention by the farmer. They will need to notify their crop insurance agent and make sure good records can verify this actual yield.

The projected price for soybeans is $12.87 per bushel. That’s the average settlement price of the November CME soybean futures contract during February. The first 10 days of settlement prices during October for November soybean futures suggest a harvest price of $12.75 per bushel. Similar to corn, the soybean harvest price is not yet known, but $12.75 is a useful starting point for evaluating a potential insurance indemnity payment on soybeans.

A $12.75 harvest price is 99% of the $12.87 projected price. Because 99% is above coverage levels offered by crop insurance revenue products, a yield loss has to occur before crop insurance indemnity payments would be made. Since corn and soybean yields will vary across farms and most farmers use enterprise unit coverage, crop insurance indemnity payments will also vary. A farmer should contact their crop insurance agent regarding the actual yield records necessary for an indemnity claim, updating their APH with this year’s harvest numbers or making their 2013 premium payment.

For farm management information and analysis visit Ag Decision Maker at www.extension.iastate.edu/agdm; ISU farm management specialist Steve Johnson’s site is at www.extension.iastate.edu/polk/farm-management.

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Prevented Planting FAQ

Contributed by Steve Johnson, Extension Farm Management Field Specialist, sdjohns@iastate.edu.Johnson_Steve_sm

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 is extended in Iowa to July 15, 2013.

 

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 policies—such as GRP & GRIP.

 

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

Answer: 60% of the initial revenue guarantee.

  • For corn, here’s how it’s figured: 180 bushels APH x 80% x $5.65/bu = $814 initial revenue guarantee  x 60% = $488/acre PP payment
  • For soybeans, an example is 50 bushels APH x 80% x $12.87/bu = $515 initial revenue guarantee x 60% = $309/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, 2013. 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 (180 bu/A APH X 60% = 120 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
  • The Iowa Farm Service Agency (FSA) acreage report deadline has been extended to July 15
  • 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.

 

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 web site . 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.

Additional information on recovering from flooding can be found at http://www.extension.iastate.edu/content/dealing-flooding-2013.

 

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Flooding Impact and Crop Insurance FAQs

Johnson_Steve_smContributed by Steve Johnson, Extension Farm Management Field Specialist, sdjohns@iastate.edu.

The frequent rains that have soaked Iowa this year have left many corn and soybean fields unplanted or with flooded areas.  Many producers have questions regarding what options they have under their multiple peril crop insurance (MPCI) policies.

Fortunately, over 90 percent of the insured corn and soybean acres in Iowa are covered by MPCI, which includes replant, delay and prevented planting coverage. The following are questions that are commonly asked by producers with MPCI that are facing replant, delay, and prevented planting decisions.

Q: What should a producer do if their planted crops are affected by the flooding?

A. Notify their crop insurance agent within 72 hours of the loss. If they qualify, the replant option provides a payment reflecting 8 bushels of corn or 3 bushels of soybeans per acre times the projected price of $5.65 per bushel corn and $12.87 per bushel soybeans, respectively. So replant will provide about $45 per acre for corn and over $38 per acre for soybeans in 2013.

Q: What if a producer didn’t have their crops planted yet, what are the late planting dates in Iowa?

A: May 31 – Final planting date for Corn
    June 15  – Final planting date for Soybeans

In Iowa, the crop insurance “late planting period” for corn begins on June 1.  Corn can still be planted after this date, but the insurance guarantee on those acres is reduced by 1% per day until they are planted.  Corn acres planted after June 25 will receive insurance coverage equal to 60% of their original guarantee.  Producers should keep accurate records of planting dates on all remaining acres.  The late planting period for soybeans in Iowa is from June 16 through July 10.

Beginning June 1, corn producers with unplanted acres have three choices: plant corn as soon as possible with a reduced guarantee, shift to soybeans with full insurance coverage, or apply for prevented planting.  Prevented planting acres are insured at 60% of their original guarantee. Those acres may have a cover crop established on them or may be left idle (black dirt).

Q: If I am prevented from planting by the final planting date, what are my choices under the terms of my policy provided I meet all other policy provisions and I do not qualify for double cropping?

A: You may:

  • Plant the insured crop during the late planting period, if applicable, and insurance coverage will be provided. The late planting period is generally 25 days after the final planting date but varies by crop and area. For most crops, the production guarantee is reduced 1 percent per day for each day planting is delayed after the final planting date.
  • Plant the insured crop after the late planting period (or after the final planting date if a late planting period is not applicable), and insurance coverage will be provided. The insurance guarantee will be the same as the insurance guarantee provided for prevented planting coverage.
  • Leave the acreage idle (black dirt) and receive a full prevented planting payment.
  • Plant a cover crop and receive a full prevented planting payment provided the cover crop is not hayed or grazed before November 1, or otherwise harvested at any time. If the cover crop is hayed or grazed before November 1, the prevented planting payment on the first crop is reduced to 35 percent of the first crop prevented planting guarantee.
  • Plant another crop (second crop) after the late planting period, or after the final planting date if no late planting period is applicable, and receive a prevented planting payment equal to 35 percent of the prevented planting guarantee.

These plus additional commonly asked questions pertaining to delayed, prevented, and replanting crop insurance decisions can be found on the Iowa State University Extension and Outreach Dealing with Flooding – 2013 page at http://www.extension.iastate.edu/Documents/Flood/FloodCropInsuranceFAQs.pdf.

ISU Extension Resources

More information can be found in the ISU Extension publication “Delayed and Prevented Planting Provisions,” file A1-57 on the Iowa State University Extension and Outreach Ag Decision Maker web site, at: http://www.extension.iastate.edu/agdm/crops/html/a1-57.html

 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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Delayed Planting, Prevented Planting and Replant Crop Insurance Coverage

Johnson_Steve_smContributed by Steve Johnson and William Edwards, Iowa State University Extension and Outreach Farm Management Specialists.

The frequent rains that have soaked Iowa this year ave left many corn and soybean fields unplanted or with flooded areas.  Many producers are wondering what options they have under their multiple peril crop insurance (MPCI) policies.

In Iowa, the crop insurance “late planting period” for corn begins on June 1.  Corn can still be planted after this date, but the insurance guarantee on those acres is reduced by 1% per day until they are planted.  Corn acres planted after June 25 will receive insurance coverage equal to 60% of their original guarantee.  Producers should keep accurate records of planting dates on all remaining acres.  The late planting period for soybeans is from June 16 through July 10 in Iowa.

Choices

Beginning June 1st, corn producers with unplanted acres have three choices: plant corn as soon as possible with a reduced guarantee, shift to soybeans with full insurance coverage, or apply for prevented planting.  Prevented planting acres are insured at 60% of their original guarantee, and the insured may either leave the acreage idle “black dirt” or be required to plant a cover crop that cannot be hayed or grazed before November 1.

Acres that have been planted, but need to be replanted, may qualify for a special replanting insurance payment. Payments are based on the value of 8 bushels of corn or 3 bushels of soybeans per acre, times their respective projected insurance prices. In 2013, that is about $45 per acre for corn and $38 per acre for soybeans.  To qualify for an indemnity payment under the replanted or prevented planting provisions, a minimum area of 20 acres or 20% of the insured unit, whichever is smaller, must be affected

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 web site .  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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Crop insurance and prevented planting in 2013

The following is a news release from USDA RMA regarding late and prevented planting in 2013. Contact: Duane Voy (651) 290-3304, duane.voy@rma.usda.gov

Heavy rainfall, floods and cool temperatures across the Midwest have slowed planting this spring. The final planting date for corn in Iowa is May 31.  The final planting date for soybeans in Iowa is June 15. Final planting dates and other crop insurance information can be found at www.rma.usda.gov/aboutrma/fields/mn_rso/.

Prevented planting is a failure to plant an insured crop with the proper equipment by the final planting date designated in the insurance policyʼs actuarial documents or during the late planting period, if applicable, due to an insured cause of loss that is general to the surrounding area and that prevents other producers from planting acreage with similar characteristics. More information can be found on the Prevented Planting fact sheet at www.rma.usda.gov/fields/mn_rso/2013/2013preventedplanting.pdf.

Here are some basic guidelines if you are unable to plant because of an insurable cause of loss by the final planting date. You may:

  • Plant during the 25-day late planting period. For most crops, the timely planted production guarantee is reduced one percent per day for each day planting is delayed after the final planting date.
  • Plant after the late planting period. The insurance guarantee will be the same as the insurance guarantee provided for prevented planting coverage.
  • Not plant a crop and receive a prevented planting payment.
  • Plant a cover crop and receive a prevented planting payment.
  • After the late planting period ends, plant the acreage to another crop (second crop) and receive a reduced prevented planting payment.

The most important thing you can do if you are unable to plant the crop by the final planting date is contact your crop insurance agent to review your policy and options before you make a decision. You are required to provide notice that you were prevented from planting an insured crop within 72 hours after the final planting date.

An Ag Decision Maker Information File is available, along with a Decision Tool to aid late planting and replanting decisions.

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Farmers encouraged to contact insurance provider about haying or grazing a cover crop this spring

News release from USDA Risk Management Agency, contact Dustin Vande Hoef, 515/281-3375.

Iowa Secretary of Agriculture Bill Northey today encouraged farmers with cover crops to contact their insurance provider if they are interested in haying or grazing after May 10, 2013.  The USDA Risk Management Agency (RMA) has provided new guidance that insurance providers may allow farmers to continue to hay or gaze the cover crop until May 22, 2013.

“It is critically important for farmers to work with their insurance provider and receive approval if they are interested in haying or grazing a cover crop past May 10,” Northey said.  “It has been a very challenging spring for farmers and hopefully this announcement will provide farmers with some additional flexibility.”

USDA had previously provided guidance to farmers interested in insuring a spring crop following a cover crop that they must not hay, graze or otherwise harvest the cover crop after May 10, and terminate the cover crop prior to planting the spring crop.  The cover crop must be terminated with tillage or herbicide, grazing is not considered terminating the crop.

“This new guidance from RMA only affects farmers interested in haying or grazing a cover crop past May 10,” Northey added.  “Otherwise, a farmer only has to terminate the cover crop prior to planting.  So, if they aren’t able to get into a field due to wet weather they still have time to kill the cover crop prior planting and not have it impact their crop insurance.”

In addition to contacting their insurance provider, farmers can also contact the USDA Risk Management Agency’s Saint Paul Regional Office for more information via phone at 651-290-3304, email at rsomn@rma.usda.gov, or online at http://www.rma.usda.gov/aboutrma/fields/mn_rso/.

Bulletin – Haying and Grazing of a Cover Crop for the 2013 Crop Year

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