To plant or not to plant? Wisconsin farmers running out of time

A rainy May just finished up. This is true not just in Wisconsin, where the state had another month of well-above average levels of precipitation, but also in other parts of the Midwest. And that is preventing a lot of planting in America, according to statistics from last week/

In the 18 major corn producing states in the U.S., only 58% of corn acreage has been planted, according to a U.S. Department of Agriculture estimate issued Tuesday. This time last year, an estimated 90% of the corn acreage — which is also the average since 2014 — had been planted.

In Wisconsin, only 46% of the corn acreage has been planted. The 2014-2018 average for this time of year is 82%....

According to the USDA report, for the week ending May 26, in Wisconsin there were only about three days suitable for field work. Last year, nearly the entire week had weather that allowed Wisconsin farmers to do field work.

The situation is even worse for soybeans. Across the 18 major soybean producing states, only 29% of the soybean acreage has been planted. Usually by this time of the year, 66% of the soybean acres have been planted.

In Wisconsin, only 20% of the soybean acres have been planted. Typically, 59% of the state’s soybean acres are planted by now.

That adds to a number of woes in the agricultural sector of this country, where prices have been plummeting for many crops due to tariff retaliation measures reducing exports and causing surpluses of soybeans and other items. So even before the fields got wet, farmers had to wrestle with whether to plant this year. But the floods may make it even harder to make ends meet, and ironically, there was a key deadline on Friday where farmers had to make the call to get a full payment, should they choose not to plant. Which led to this recent article from a publication reminding farmers of the options, and the variables that go into that decision.

In order to receive full crop insurance coverage for 2019, the final planting date for corn is May 31 in the southern two-thirds of Minnesota, all of Iowa, and all but the northern few counties in Wisconsin; as well as a few counties in both southeast South Dakota and North Dakota. The late planting period for corn is 25 days, which would be from June 1-25, with a reduction in the insurance coverage level of one percent for each day that corn planting is delayed past May 31. In northern Minnesota and extreme northern Wisconsin, as well as many counties in North and South Dakota, the final date for corn planting with full insurance coverage is May 25, with the late planting date extending to June 19. Following the late planting period, the maximum crop insurance coverage is 55 percent of the insurance guarantee, which is the same as the insurance compensation for prevented planted crop acres.

For soybeans, the final planting date is June 10 in Minnesota, eastern North and South Dakota, and the northern two-thirds of Wisconsin, with the late planting period extending 25 days until July 5. The final soybean planting date is June 15 in Iowa and the southern one-third of Wisconsin, with the late planting period lasting until July 10. As with corn, there is a reduction of one percent per day in the maximum insurance coverage during the late planting period, with 60 percent maximum insurance coverage after that period.

Once the crop insurance final planting date for corn or soybeans has been reached, farm operators can opt to take the prevented planting insurance coverage (if they have that coverage option) rather than planting the crop. A large majority of producers in the upper Midwest carry Revenue Protection crop insurance with prevented planting coverage on their corn and soybeans. If they choose the prevented planting coverage, they will receive 55 percent of their original crop insurance guarantee for corn and 60 percent for soybeans on a specific farm unit. Every farm situation is different when it comes to making a decision on whether to utilize the prevented planting option, so it is important for producers to make individualized decisions for each farm unit.

Crop producers will have different yield potential, crop expenses, land costs, etc. on various farm units, as well as differences in their level of crop insurance coverage and revue guarantees on various farms. All of these factors become important when evaluating prevented planting crop insurance decisions. It is also important to note that the guaranteed payments for prevented planting with corn and soybeans are considerably less in 2018, as compared to several years ago. The decision your neighbor makes regarding prevented planting may not necessarily be the best decision on your farm, depending on the situation and the factors involved.

The flip side of the lack of planting in some crops is that the crops that do come in will bring a much higher price in the coming months.

Corn futures surged more than 20% to a three-year high over the past few weeks on fears farmers wouldn’t be able to get seeds in the ground ahead of crop-insurance deadlines. So-called prevented plant claims reached 3.6 million acres in 2013, according to the U.S. Department of Agriculture’s Farm Service Agency….

Such insurance claims are considered a last-ditch effort for farmers, who can receive about half of the value of their crop. Analysts in the Bloomberg survey cautioned estimates could still be skewed by the weather and the government’s market facilitation program, a $16 billion aid package to mitigate the impact of trade wars. Soaring corn prices could also prompt farmers to plant the crop without insurance.

“The MFP payment is dependent upon acres being planted,” said Karl Setzer, market analyst at Agrivisor in Bloomington, Illinois. Setzer estimated that 4 million to 5 million acres of corn could be left planted. However, “the recent rally in futures will also encourage planting beyond normal dates,” he said.

So needless to say, it's not just weather that's a volatile situation for Midwesterners as June begins. It's also the bouncy prices of certain crops who are either facing shortages or surpluses...and maybe both! Sure makes me wonder which direction inflation will be going at the grocery store in a couple of months.