Agricultural Commodity Risk Management - Prevent Plant

Without any doubt, as a fellow member of the farming community, you have been asking more questions this year regarding what to plant, and where, than probably at any time in the past decade - or two. With the U.S. / China trade war continuing its roller coaster ride, the White House considering renegotiations with several other trading partners, a heavily reduced demand for soybeans due to both the trade war and swine flu and the historically adverse weather conditions of this spring, the markets have been all over the map.

However, it is the weather which has been recently causing the most movement within the commodity markets; especially considering that planted acres this year (2019) are half of what they were, at this time, last year (2018). For this reason, coupled with the sluggish demand for soybeans, farmers are quickly trying to plant more corn this year, and less soybeans... But then... the weather.

The expectation is that this year's corn harvest will be markedly reduced, compared to last year's, due to the unusually wet spring, which is expected to continue through late June and slow down or prevent many acres from being planted into corn.

Many farmers are not only asking themselves which crop to plant, but also whether their acres are even able to be planted...

As part of your crop insurance / risk management program, the federal government has allowed the inclusion of the Prevent Plant program, which assists farmers in the event that they are unable to plant due to muddy or submerged acres.

However, the deadlines for the Prevent Plant program are rapidly approaching, and there are rules of engagement. Not adhering to the proper deadlines or qualifying rules may disqualify your farm from this program.

Please make sure to contact us, at MidPlains Ag, as soon as possible to determine the best course of action for your non-ariable acres.

  1. Prevent Plant Rule #1: Last date for planting corn is May 25, 2019. For each day which corn is planted after that date, the APH (Approved Production History - determined by annual production reports due by April 25 each year) for Prevent Plant is reduced by 1%. (Last date for planting soybeans is June 10, 2019.)
  2. Prevent Plant Rule #2: Farmers can turn in a Prevent Plan claim, for corn, after May 25, 2019. (If, on May 26th, you have decided not to plant corn, MidPlains Ag can proceed with turning in your claim for Prevent Plant.) The window for submitting claims is 10 days after last planting date. If you have decided to pursue Prevent Plant assistance, please make sure to contact MidPlains Ag as soon as possible.
  3. Prevent Plant Rule #3: Prevent Plant pays 55% of your insurance guarantee on corn; 60% for soybeans. (CORN EXAMPLE: APH x $4.00 x insurance level x 55% - corn) If your APH is 220 bushels and your insurance level is 80%, you will be paid 220 bu. x $4.00 x 80% x 55% or $387.20 per acre)
  4. Prevent Plant Rule #4: The 20/20 acreage qualification rule applies to Prevent Plant. If you have included Enterprise Units within this year's operational risk management planning, you will need to have 20 acres assessed to qualify as Prevent Plant acres (non-plantable)(per crop / per county) to qualify for the program. If you have included Optional Units, the lower of 20 acres, or 20%, of the crop acres on each section would need to qualify as Prevent Plant acres.
  5. Prevent Plant Rule #5: The acres determined to be un-plantable, need to have been able to be planted / farmed at least once in the last 4 years. If the acres are typically muddy / submerged / un-plantable, then they do not qualify and are not counted within the 20/20 rule.
  6. Prevent Plant Rule #6: Forage, planted on acres qualifying for the Prevent Plant program can only be grazed after November 1, 2019.

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