farmgate: Are You Planting Wheat, Or Filing For A Prevented Planting Insurance Payment?
“I haven’t planted wheat yet? Heck, I still have soybeans on my wheat ground!” And if you have either thought or uttered words to that effect, you may have totally forgotten about the crop insurance deadline for planting wheat. So let’s ease your mind a bit on that “minor” problem.
The crop insurance deadline for planting wheat across the northern part of the Cornbelt has already passed, and it will soon pass for wheat farmers across the southern part of the Cornbelt. And there is a good chance you have not only been unable to plant wheat, but probably your wheat ground may still have 2009 crops on them and certainly your seedbed is not yet ready. Mother Nature is not yet done watering it for you. So, if you have not met the planting date requirements for sowing wheat and you had planned to insure it with a revenue insurance policy, there are some alternatives says University of Illinois Farm Management Specialist Gary Schnitkey.
“Reaching the final planting date does not mean that wheat cannot be planted. Rather, guarantees will be reduced once the final planting date is reached. In addition, a farmer can choose to take a prevented planting payment and not plant wheat once the final planting date has been reached.” In a nutshell, that is Schnitkey’s message for those who are most concerned.
Delayed planting penalty
When your final planting date has arrived, and you have not yet planted wheat, there is a five day late planting period, in which the revenue guarantee drops 1% per day. However, that only gives you five days with a relatively small penalty, but if the sixth day arrives and the wheat is not planted, then the guarantee drops to 60% of your expected revenue, whether that is the initial or final guarantee, depending on the type of revenue insurance policy you have.
Prevented planting payment
If you have been unable to plant wheat because of the weather, or any other insurable cause, then you have the option to receive a prevented planting payment. Schnitkey says before the crop insurance company issues a prevented planting payment, it will have to be assured that your fields were too wet, and the reason was not the fact the field was full of uncut soybeans. A prevented planting claim must be filed within 72 hours of the final date for late planting, as well as including a report on the problem and the acreage involved. If you plant a spring crop, your prevented planting payment for wheat will be 35% of your guarantee, but a full payment would be issued if no spring crop is planted on the wheat acreage.
Strategy and considerations
Schnitkey says planting a second crop next spring will impact your APH yield for wheat, and it will be recorded as 60% of your APH yield. That will reduce your APH average in future years. However, yields may also be pulled down with late planted wheat.
Schnitkey also says most farmers will find a prevented planting payment advantageous. He says the size of it will outweigh the negatives of a decline in APH yields and the fact a spring crop may not be eligible for crop insurance coverage.
Summary:
Wheat growers are at the point of having to make decisions on what to do about crop insurance coverage if late harvest of row crops has prevented timely planting of wheat. The deadline is here for filing for prevented planting payments, if wheat ground remains too wet to plant. While there are minor deductions of benefits for the first five days after the deadline, the benefit drops to 60%. However, a prevented planting payment may be preferred over late planting benefits.
Posted by Stu Ellis on October 29, 2009 12:11 AM to farmgate