Crop insurance provides planting option


COLUMBUS – Wet weather has made it difficult for many farmers in Ohio to plant. But those who purchased crop insurance on corn have an option to put seed in the ground even now, said Allan Lines, Ohio State University Extension agricultural economist.

“Federal crop insurance provides a payment for ‘prevented planting,'” Lines said. “In the language of the insurance policy, the ‘final planting date’ for corn in Ohio is June 5.

“That means that beginning June 6, if because of weather – and that is the case in Ohio – the corn crop is unplanted, an insured corn crop is eligible for a ‘prevented planting’ insurance payment.”

For a producer to qualify, no other harvestable or substitute crop may be planted on the unplanted acres that would normally have been planted to corn, Lines said.

The calculations.

The payment calculations come out this way:

130 (APH proven yield per acre – proved by producer for the policy)

x .75 (75 percent yield guarantee – elected by producer in policy)

= 101.25 (guaranteed production per acre)

x .60 (60 percent “prevented planting” yield guarantee – specified in policy)

= 60.75 (“prevented planting” yield guarantee)

x $2.05 (APH price guarantee – specified in policy – or $2.46 if CRC policy)

= $124.54 (“prevented planting” payment per acre)

Is it worth it?

“The critical question for producers facing this situation is to decide if planting the corn late will net them – from this time forward – more cash than the $124.54 ‘prevented planting’ payment per acre,” Lines said.

“That means any costs already incurred or committed to, regardless if you plant or not, are irrelevant.”

Lines offered the following guide to determine net cash from this point forward, assuming a producer plants late anyway:


* Seed (not yet used) – $30

* Fertilizer (lost or side dress nitrogen) – $10

* Chemicals (yet to be applied) – $10

* Fuel (yet to be used) – $30

* Repairs (yet to be spent) – $10

* Miscellaneous (yet to be spent) – $5

* Interest – $5

* Total money yet to spend to plant, harvest and dry crop – $100


* Yield (75 percent of normal) – 97.5 bushels per acre

* Price (current harvest contract price) – $1.85

* Sale (income from corn) – $180.38

* LDP (estimate per bushel) – 10 cents

* LDP (estimate per acre) – $9.75

* Total income per acre – $190.13

NET CASH – $90.13 per acre from late planted corn – today forward.

A comparison.

Comparing the two options, the numbers add up like this:

* Net cash per acre from “prevented planting” payment: $124.54

* Net cash from late-planted corn: $90.13

* Gain (added net cash from “prevented planting” payment): $34.41

“Calculate your own numbers,” Lines advised. “They may be different from those above. But there is no reason to forego more net cash with zero risk if your numbers look like those above.

“Harvest price would have to rise to $2.30 to make it a break-even decision to plant late corn.”

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