What is in this article?:
- Prevented Planting Payments versus Planting Soybeans
- Farm Scenarios
- Corn Prevented Planting Payments versus Planting Soybeans
- Soybean Prevented Planting Payments versus Planting Soybeans
Soybean Prevented Planting Payments versus Planting Soybeans
In some cases, all corn acres have been planted, but soybean acres are not planted. After the final planting date, the relevant comparison is between the returns from taking a soybean prevented planting payment and returns from planting soybeans.
For planting soybeans to have higher returns than taking the prevented planting payment, soybean revenues must exceed the net prevented planting payment ($243/acre) plus soybean costs ($215/acre), for total revenue of $458/acre ($243 prevented planting payment + $215 soybean costs). At a $12.70 soybean price, soybean yields would have to exceed 38 bushels per acre for planting soybeans to be more profitable than taking the soybean prevented planting payment.
Achieving 38 bu./acre of soybeans may be possible, but lower yields are more likely. As planting is further delayed, expected yields decline, thereby increasing the desirability of taking the prevented planting payment.
The above example is for a particular situation. While the particulars vary across scenarios, the example illustrates the tradeoffs fairly common across a range of situations. Of course, farmers should look at their own case in particular. The prevented planting module in the Planting Decision Model will be useful in making these calculations. This spreadsheet can be downloaded from the FAST section of the farmdoc website.
Farmers need to consult with crop insurance agents on prevented planting. Crop insurance agents can aid in determining the number of acres on which prevented planting can be taken. There are also deadlines for signing up to take the prevented planting payment. Contacting a crop insurance agent sooner rather than later is advisable.
You might also like: