Focus on Ag

Focus Shifts to Soybean Planting, Prevented Planting

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The cool, wet weather conditions continued during the week of June 3-9 across the areas of southern Minnesota and northern Iowa, which have been hardest hit with delayed corn and soybean planting in 2013. There was some limited corn and soybean planting completed in wettest areas of southeast Minnesota and northeast Iowa, while planting progress was more prevalent in south-central and southwest Minnesota, and adjoining areas of Iowa. Most of the planting focus has now switched from unplanted corn acres to the unplanted soybean acres.

May 31 was the final date to plant corn in Minnesota and Iowa and receive full crop insurance coverage. Now that we are passed that date, many farm operators with unplanted corn acres, who had a significant crop insurance guarantee, have opted to collect the prevented planting crop insurance payment, rather than planting a corn crop in 2013. The prevented planting crop insurance payment was 60% of the original crop insurance guarantee. It is not known how many producers or how many corn acres will be impacted by prevented planting for the year. Some livestock producers have continued with late planted corn past June 1, in order to assure adequate feed needs for their livestock.

In the USDA Weekly Crop report on June 3, 57% of the soybeans were planted in the U.S., compared to a normal soybean planting of 74% on that date. In Minnesota, only 55% of the soybeans were planted by June 3, compared to a normal planting level of 88% , while in Iowa a mere 44% of the soybeans were planted by June 3, which is far below the normal level of 91%. Soybean planting across the two states made some progress during the week of June 3-9, but was very slow in the extremely wet areas of southeast Minnesota and northeast Iowa.

The prevented and delayed corn and soybean planting in Minnesota is likely to have a bigger impact on the final statewide average yield in 2013 than in some other years, due to the fact that the unplanted acres are in some of the highest production areas of the state. In 2011 and 2012, The southeast MN region had an average corn yield of 179.3 and 178.5 bu./acre, respectively, compared to statewide average yields of 156 and 165 bu. Similarly in soybeans, the southeast Minnesota average yields were 47.3 and 50.3 bu./acre in 2011 and 2012, compared to the statewide average soybean yields of 39 and 43 bu. for those two years. Most of the hardest hit counties of Minnesota are in the portions of the state with some of the highest historic production.

While many producers have finalized their decision for crop insurance prevented planting for unplanted corn acres, the prevented planting decision is not quite as easy with soybeans. The final planting date for soybeans, in order to receive full crop insurance coverage for 2013, is June 10 in Minnesota and the northern two-thirds of Wisconsin, and June 15 in Iowa and the southern one-third of Wisconsin. The late planting period for soybeans extends for 25 days until July 5 in Minnesota and northern Wisconsin, and until July 10 in Iowa and southern Wisconsin.

For crops planted after the final dates for the late planting period, crop insurance coverage is set at a maximum of 60% of the original insurance guarantee, which is the same as the prevented planting insurance coverage. Once the final planting date for soybeans has been reached (June 10 or 15), farm operators can opt to take the prevented planting insurance coverage, which is 60% of the crop insurance guarantee, if they have that coverage option, rather than planting the crop. Soybean yield potential in southern Minnesota is probably 35-40 bu./acre, when planting in mid-June.

Every farm situation is different when it comes to making a decision on whether to utilize the prevented planting option, so it is important for producers to make individualized decisions for each farm unit. Crop producers will have different yield potential, crop expenses, land costs, etc. on various farm units, as well as differences in their level of crop insurance coverage. All of these factors become important when evaluating prevented planting crop insurance decisions. Producers should contact their crop insurance agent for more details on final planting dates and prevented planting options with various crop insurance policies, before making a final decision on prevented planting. Producers need to report prevented plant acres to their crop insurance agent.

The University of Illinois has developed an excellent spreadsheet for analyzing various options for the 2013 corn and soybean crop in Minnesota and other states, when considering the Federal Crop Insurance prevented planting option, compared to raising a crop in 2013. Producers can enter their state, county, crop insurance guarantees, expected yields and prices, production costs, etc., and get farm unit specific scenarios. This spreadsheet can be accessed free of charge on the U of Illinois FarmDoc website.

Kent Thiesse has developed an information sheet, “Crop Insurance Prevented Planting Options,” which contains details on prevented planting coverage, as well as examples. To receive a copy, please send an e-mail to kent.thiesse@minnstarbank.com

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