Hi, this is Paul Mitchell professor of Agriculture and Applied Economics at
the University of Wisconsin - Madison and UW Extension. I'm here today to talk
about crop insurance and late and preventive planning. What you see behind
me is a typical scene this year in Wisconsin. It's wet, just rained this
morning, in this afternoon fields are wet, people haven't been able to work. And
that's a common scene across Wisconsin and much of the Upper Midwest this year.
Most of our Wisconsin acres are insured for both corn and soybeans, around 75 to
80 percent of the acres each year. And part of that coverage includes late and
prevented planning. Late planting is triggered when you plant after specific
dates for specific crops in different parts of the state. For Wisconsin for
corn for silage and corn for grain and then we have soybeans we'll talk about
today. Corn for grain will be triggered in northern Wisconsin on May 25th, corn
for silage up in northern Wisconsin is on May 31st. Here in most of the state of
Wisconsin the trigger dates for late planning are May 31st and June 5th for
corn for silage, for soybeans it's June 15th for the southern third of Wisconsin
and the rest of the northern Wisconsin northern two-thirds is June June 10th. If
you're planning those crops after those dates, you are in the late planting phase
and you have a various options for those acres that you're looking at planting.
First is to take it as a late planting, still plant it but it's late and what
you do is you have to talk to your crop insurance agent tell him or her about it.
And then what happens for those acres the coverage is reduced by one
percentage point for each day you are late and so that's one percent times
your coverage and your coverage is the price times your yield history yield
your average yield and then the coverage level you chose when you bought the
insurance back in March. So that's your guarantee you take one
percent reduction in that each day that you plant late only on those acres.
The other option is to take a full prevented planted indemnity, and what that
is it's 55% of that that I'm guaranteed that I'd just be talked
about. So that would be a full indemnity for a preventative plant, you can't do
anything with that acres anymore until after November first.
You can plant a cover crop, you can still mow the weeds and
everything, but you're not allowed to harvest or graze anything until after
November 1st that's prevented plant you're not allowed to take any
productive crop off of that. If you take the full prevented planted
indemnity here in Wisconsin you can still establish a alfalfa crop for next year's
on production. So that's a viable option for some farmers is to go with this
summer is to plant in some alfalfa and have it ready to go next year for alfalfa
production. Another option is what they call a partial prevent plant indemnity.
What you do there is you only take 35% of the preventive plan identity and so
instead of taking 55% of your coverage you take 35% of 55% of your guarantee so
about 19.25%. Much more payment, but now you have the option to
do things with this property on these acres. You can plant in some, in
Wisconsin a good example is to plant forage, you can grow something and make a
forage crop off of it harvest it you don't have to worry about the November
1st date anymore, so that's a big option that a lot of farmers might find
valuable. It depends upon how much you need forage, how much productivity you
think you can get, and how that compares to the loss of the two thirds of the
prevented planted indemnity. The fourth option is to just leave it uninsured,
still plant whatever you want maybe corn, maybe some of the crop, do whatever you
want with it, it's just no longer insured and so you
don't have to worry about the crop insurance and rules. There are a few
other considerations that you want to make sure you talk to your crop
insurance agent about, he will work with you to know all the specifics for your
farm, and how the dates that are important for you, your yield histories
your coverage levels, and you can help pencil out which of these options is the
best for you to choose. You also have to tell him or her about the different
dates, if you plant late particularly.
Another issue to be concerned about if you are in the period of prevented plant or late
planting particularly is enterprise units. To qualify for enterprise units
you have to have acres planted in two sections in order to qualify, and
enterprise units are important for really reducing your premium.
In Dane County here it can cut your premium in half if you qualify for enterprise units.
All your grain is one big unit, but you pay a lot lower premiums.
If you plant less than 20% or less
20 acres in two sections you no longer qualify for enterprise units. That can
make a big surprise when your premiums come due later this summer, so you want
to make sure you make sure you get your corn planted or your soybeans planted
to qualify for enterprise units, if you are receiving the enterprise unit discount.
The last thing that's in the news lately is how it impacts your
payments, and that's unclear exactly. Our traditional arc payments would not
be affected by them, but the potential the market the market facilitation
program payments, it's unclear exactly how those will deal with prevented plants.
It seems at this time they will only pay for acres that are actually planted.
So potentially you would lose the option to get MFP payments for acres that you
declare is prevented plant. So you have to be concerned about how it affects
your yield histories, if you take out a full preventive plant,
it's as if you just left it out, it doesn't affect it at all. Whereas if you do
partial prevented plant, sometimes what it actually does it get counts as
60% of your average so it does affect your yield history.
A key issue to remember all of this is to always communicate the crop insurance
agent, he or she can sit down with you and know the specifics of your farm, they
will know your yield histories, they will to tell you specific how it affect your
yield histories, in the future they can tell you about the options and specific
dates that apply to your farm, the specific prices, your coverage levels.
And then you can sit down with him/her and work out the and do the penciling
out of which of these four options is the best way to go forward for you.
So hopefully today you've gotten some information how to use crop insurance
and your choices if you're facing late prevented planning issues this year.
Links are below to show you more information, the detailed maps for the
specific counties and the specific dates for corn for grain, corn for silage, and
soybeans here in Wisconsin. This is Paul Mitchell ag-economist out standing in the field.