Crop Insurance – Delayed and Prevented Planting Provisions
David Reinbott, Agriculture Business Specialist, University of Missouri Extension
(Adapted for Tennessee by Chuck Danehower, UT Extension)
A colleague of mine, David Reinbott with University of Missouri Extension recently put out some good crop insurance information on delayed and prevented planting provisions of crop insurance. I have taken it and adapted it for West Tennessee. As David mentions below, contact your crop insurance agent before making a final decision and I would add have that agent run through your alternatives. I have picked up some confusion among producers on their coverage in relationship to the prevented planting provisions. The confusion stems from how many acres is covered under prevented planting. It is not necessarily your intended acres, but your highest planted acres of the last 4 years planted history of that crop on that farm. So that issue needs to be squared away with your crop insurance agent as well as the provisions on planting a second crop and receiving the prevented planting payment. If I can assist you in evaluating your alternatives, please give me a call at 731-635-9551 or drop me an email at cdanehow@utk.edu. Many thanks to David Reinbott for the reuse of his material.
My goal is to give some insight and clarity to the delayed and prevented planting provisions of crop insurance. The most important first step is to contact your crop insurance agent before you make any decisions on the planting, replanting or abandoning of acres. There are many rules and regulations that need to be followed so it is important that you stay in close contact with your crop insurance agent. Each crop and insurance product has its own special rules and regulations that need to be followed.
Below are links to 3 guides that will help you in understanding the delayed and prevented planting provisions. At the end of the publication from Iowa State, there is a flow chart that I found very helpful.
Iowa State University
http://www.extension.iastate.edu/agdm/crops/html/a1-57.html
University of Illinois
http://www.farmdocdaily.illinois.edu/2011/05/prevented_and_late_planting_pr.html
USDA – Risk Management Agency
http://www.rma.usda.gov/pubs/rme/ppflood.pdf
You must remember the final planting dates and the late planting periods are different for each state and for each crop.
Planting Dates for West Tennessee
Corn – May 20 Final Planting Date Late Planting Period 25 Days – Ends June 14
Corn Replant Payment equals 8 Bushels X $6.01
Soybeans – Full Season – June 15 Final Planting Date Late Planting Period 20 Days – Ends July 5
Soybeans Behind Wheat – June 25 Final Planting Date Late Planting Period 20 Days- Ends July 15
Soybean Replant Payment equals 3 Bushels X $13.49
Cotton – May 20 Final Planting Date Late Planting Period 15 Days – Ends June 5
Important Points to Know
If a second crop is planted before the end of Late Planting Period for the Prevented Planted crop, no prevented planted payment will be paid.
The Revenue guarantee will be reduced 1% per day on all crops planted within the Late Planting Period. The original planting date and acreage on replants should be reported to your insurance agent as soon as possible. If the first crop fails and you are not planting back to the same crop, make sure you call your crop insurance agent. First crop losses must be reported and a claim submitted before you can plant a second crop.
Delayed and Prevented Planting Examples
I want to go through some situations and options a farmer may have. In each situation I will use corn as my original crop and final date to plant corn May 20. I will also use Revenue Protection (RP) in my examples and a Revenue Guarantee of $676/acre (150 bushel APH X $6.01 corn price X 75% coverage level). Also in the situations where the crop was planted and damaged due to the flooding, the crop insurance company projected a 100% loss.
The first situation is when the corn crop cannot be planted on time – Prevented Planting.
1. Corn is initially planted after final planting date of May 20
There is a 25-day late planting period that begins after the final planting date. As I mentioned earlier, for West Tennessee the final planting date is May 20. Any acres initially planted during the late planting period (May 21 – June 14) will receive a lower revenue guarantee than those acres planted earlier. The coverage is reduced 1 percent per day for each of the next 25 days. If corn is initially planted on May 30, the revenue guarantee will be reduced 10% to $608, ($676/acre X (1- .10 (10 days X 1% per day)).
2. Corn is initially planted after the late planting period June 14.
The Revenue Guarantee is reduced to 60% or $406 ($676/acre X 60%). The producer has the option to insure the corn crop if initially planted after the end of the late planting period.
3. Corn is declared prevented planting and nothing is planted
If nothing is planted, an indemnity payment will be made of 60% of the Revenue Guarantee of $406 ($676/acre X 60%). (Please note, that for cotton, this provision is 50% of the Revenue Guarantee and for soybeans 60% of the Revenue Guarantee.)
4. Corn is declared prevented planting but soybeans are planted after the late planting period of June 14.
The soybeans must be insured and an indemnity payment will be made equal to 35% of the prevented planting payment of the corn of $142 ($676/acre X 60% X 35%). Also, a yield equal to 60% of the approved yield for the prevented planting corn acreage would be entered into the 2011 APH.
The second situation is when the corn crop was planted before the final planting date but is severely damaged by the flooding
1. Leave the corn crop and harvest as is
The Revenue Guarantee will be $676/acre (150 bushel APH X $6.01 corn price X 75% coverage level). If the yield is severely damaged, an indemnity payment will be made if the fall harvest revenue is below $676/acre.
2. Replant the corn crop and collect a replant payment
If the corn crop is projected to produce less than 90% of the guarantee yield, the producer can receive a payment equal to the projected price of $6.01 X 8 bushels or $48.08. In this example with a 150 APH and 75% coverage level, the corn yield would need to be less than 101 bu/acre (150 bu X 75% X 90%).
3. Plant a second crop of soybeans not insured
In this situation the crop insurance company projects a 100% loss and allows the corn crop to be destroyed. A 100% indemnity payment will be made based on the estimated yield loss on the corn. If corn is estimated as a 100% loss, indemnity payment is $676/acre (150 bushel APH X $6.01 corn price X 75% coverage level).
4. Plant a second crop of soybeans and buy insurance
In this situation the crop insurance company projects a 100% loss and allows the corn crop to be destroyed. If the soybean crop is insured, the producer will first receive 35% of loss payment of the corn, $237 (150 bushel APH X $6.01 corn price X 75% coverage level X 35%). If the soybeans do not have a loss, the other 65% will be paid at harvest, $439 acre (150 bushel APH X $6.01 corn price X 75% coverage level X 65%). If the soybeans do have a revenue loss, the producer can choose to take the second 65% corn payment, $439, or the soybean loss, whichever is greater.
5. The corn crop is destroyed or released and nothing is planted back
In this situation the crop insurance company projects a 100% loss and allows the corn crop to be destroyed. A 100% indemnity payment will be made of $676/acre (150 bushel APH X $6.01 corn price X 75% coverage level).
