Full Prevented Planting and Late Period Planting Return Comparison Tool
The wet spring of 2019 with rains and flooding has kept many fields unplanted across Iowa. With the final planting dates in the state of May 31 for corn for grain and June 15 for soybeans, the provisions of the Prevented and Late Planting aspects of crop insurance are important considerations for farmers faced with these decisions. This tool helps compare projected returns from full prevented planting payments under crop insurance with returns from corn and soybeans planted during the late planting period in Iowa. With the tool, it is possible to evaluate projections based on different assumptions including farm history. This tool should only be used to help inform what full prevented planting payments and late planting returns could look like. Consider price risk and other impacts for your farm. Include potential impacts on your longer-term situation and outlooks as well as immediate circumstances. Consult your approved crop insurance agent, banker, and other trusted advisors when determining the best decision for your operation. Within the tool, reductions for projected yields are assumed using Iowa State University (ISU) Extension estimates for relative yield impacts and delayed planting dates. Following is one example using certain assumptions showing the different expected net returns for taking full prevented planting compared with planting corn and soybeans in the late planting period using this decision aid tool. A spreadsheet that you can fill with your farm information can be downloaded from the Iowa Farm Bureau. The completed example with your farm information will provide more relevant information for your consideration by selecting various coverage levels, planting dates, yields and cost information. All cells with text in red can be edited in the file linked above.
Yield Reduction for Crop Loss Coverage and in Expected Harvest
Yields reduce drastically when corn or soybeans are planted during the late planting period in Iowa. During the late planting period crop Insurance revenue guarantees are reduced 1% each day. These tables show how corn and soybean relative yields reduce depending on when a crop is planted. For corn, the late planting period begins on June 1 and the soybean late planting period begins on June 16, and each lasts 25 days in Iowa.
For corn, a plant density of 30,000 was used as an example to demonstrate relative yield reductions due to late planting. Corn planted during the late planting period received relative yields of 69% of established potential from June 1-5 and 53% of established potential from June 6-26.
Source: ISU Extension
Soybeans planted in Central Iowa were used as an example to demonstrate the relative yield reductions from during the late planting period. Soybean relative yields declined to 59% of established potential if planted from June 16-26 and only 45% of established potential from June 27-July 11. Iowa production numbers from ISU Extension were used to determine yield reductions in the tool.
* Not statistically different from 100%
Source: ISU Extension
Prevented Planting and Late Planting Crop Insurance Additional Details
For full prevented planting a producer will receive 55% of the revenue guarantee for corn and 60% of the revenue guarantee for soybeans. Crop Insurance revenue guarantees are reduced 1% each day during the late planting period. Further examinations of projected cost and returns of scenarios in Iowa can be found in the article Negative Projected Returns for Principal Crops in Iowa Challenging Farmers in 2019. In Iowa, the last day to file for prevented planting is June 28 for corn and July 13 for soybeans. Iowa specific details can be found in the Delayed and Prevented Planting Provisions for Multiple Peril Crop Insurance article by ISU Extension. When considering prevented planting you have many options that you need to be aware of. The Risk Management Agency Fact Sheet lists options that are available to producers.
Chris Mandt, Research Analyst, Decision Innovation Solutions (DIS). DIS is an Iowa-based economic research firm which provides regular farm economic research for the Iowa Farm Bureau Federation.