What is in this article?:
- Crop insurance factors heavily in farmers' planting decisions
- Fertilizer a major cost
- There are a lot of factors that come into play when farmers are deciding how to manage their 2011 crop.
As the June 5 final planting date nears for the full crop insurance yield and revenue guarantees for corn, a Purdue Extension agricultural economist says there are a lot of factors that come into play when farmers are deciding how to manage their 2011 crop.
First, farmers need to take into consideration the type of crop insurance they've purchased for 2011 and whether or not the crop has been planted, said George Patrick.
There are two basic types of crop insurance. Farmer-based coverage is an individual policy based on a producer's yield history and actual yields. The farmer-based insurance includes coverage for a 25-day late planting period, replant coverage and prevented planting. In contrast, group or county insurance policies base indemnity payments on county yields and revenue.
"If producers have the farm-based insurance, they have a different set of management options than those who have group risk plans," Patrick said. "Farmers with the group risk plan really don't have a lot of management options as far as crop insurance is concerned."
Farmers with individual plans who have planted a corn crop that is now in poor condition have to decide whether to leave the crop as is, replant with the same crop or to shift to another crop.
"Those looking to shift to another crop need to work with their crop insurance agents to be sure they are complying with all regulations so they don't run into any problems with collecting on an indemnity," Patrick said.
If a producer with farm-based insurance has not yet been able to plant a crop, the decision comes down to a prevented planting payment versus late planting or perhaps a shift to soybeans. The final planting date for soybeans to qualify for the full yield and revenue guarantees is June 20.
Farmers who are unable to plant corn by June 5 may qualify for a prevented planting payment for corn. This payment is 60 percent of the guaranteed yield or revenue level they purchased for the 2011 growing season. Coverage levels range from 50 percent to 85 percent, with 65percent to 75 percent historically being the most popular.
After June 5 for corn, and June 20 for soybeans, yield and revenue guarantee levels are reduced by 1 percent each day during the 25-day late planting period.