CENTRAL ILLINOIS (WCIA) — Since most farmers did not begin planting until a month after they regularly would, the issue of a prevented planting payment from crop insurance becomes a quandary for those farmers who cannot get finished planting corn by early June.
University of Illinois ag economist Gary Schnitkey is recommending farmers keep planting and not think twice about taking a prevented planting payment from crop insurance.
“June 5 is the deadline for most of Illinois except the extreme southern counties and that is May 31,” Schnitkey said. “After that date farmers can take a prevent plant payments and they are eligible for those again after that June 5th, May 31st date. The challenge this year, if you will, is that the market’s going to be giving a pretty good incentive to plant corn even after that date.”
“Corn prices right now are well above the projected price. If you are looking at what’s likely to be paid at harvest, it’s above the projected price and that will make planting look very attractive, even after that final plant date,” Schnitkey continued. “However, if you are doing it after that final plant date, you are giving up a known prevent plant payment and taking some risks there and your crop insurance guarantee will be going down one percent every day afterward.”
Are we looking at a time when yields will be going down and that being adjusted on the fly in some of those economics?
“Yeah, if you are planting after June 5, your expected yield will be lower than planting end of April or mid-April,” Schnitkey said. “We took that into consideration when we did our economics and we had tools that build in that. Even given that yield decline, we’ll still be looking at profitability for corn planting. The other negative about planting corn after the final plant date is that yield will go into the calculation of APH or approved yield for that year and that could be lower, and would lower the APH moving forward.”