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RSS By: Kevin Van Trump, AgWeb.com

Kevin Van Trump has over 20 years of experience in the grain and livestock industry.

What You Need To Know About "Preventive Plant"

May 09, 2013

 I continue to hear a lot of information and talk floating around regarding "Preventive Plant." Since crop insurance isn't exactly in my strong suit, I often refer to various industry experts for the most up to date and accurate play. Below is a simple, yet concise, explanation of Preventive Plant insurance and how it works. 

Prevented planting coverage due to floods, hurricanes, or excess rain that occurs during the insurance period and prevents other producers from planting acreage with similar characteristics, is provided for most crops. Because conditions vary significantly between geographic areas, loss determinations are based on each producer’s circumstances. Producers must first contact their crop insurance agent to report a prevented planting loss.
 
Federal Multi Peril Crop Insurance policies cover prevented planting as follows:
  • You must have been prevented from planting by an insured cause. Generally this is conditions being too wet. 
  • The condition must be common to the area. In other words, if everyone else got their crop planted and you turn in a prevented planting claim, that claim may be denied.
  • In order to be eligible for a prevented planting payment, the area that was prevented from being planted must be at least the lesser of 20 acres or 20% of the insurable crop acres in the unit. The acreage that was prevented from being planted does not need to be contiguous.
  • Your prevented planting indemnity will be 60% of your guarantee. For example, if your Actual Production History is 130 bu./acre and you elected 75% coverage and chose the revenue product, Crop Revenue Coverage, your guarantee would be:130 X 75% = 97.5 X $4.04 = $393.90. Your prevented planting indemnity would be $393.90 X 60% = $236.34. If you plant a second crop after the late planting period, you will receive only 35% of the prevented planting indemnity and you must insure the second crop and pay the full premium on the second crop.
  • You can not have a prevented planting claim until after the final planting date for the crop. Additionally, you can not plant any crop including a cover crop during the late planting period which is 25 days after the final planting date for corn & soybeans. If you plant any crop during the late planting period, you do not have a prevented planting claim.
  • You must submit a notice of loss on a prevented planting claim within 72 hours of the time that you determined that you will not be able to plant the crop, but no later than 72hours after the end of the late planting period.
The Group Risk Plans of Insurance, GRP &GRIP do not cover prevented planting.
 
You can plant corn or soybeans after the final planting date. If corn or soybeans are planted after the final planting date, the production guarantee or amount of insurance is reduced by 1% per day for each day planted after the final planting date up to a maximum of 25 days.

Final Plant Dates by State *Make sure you check with your agent. Specific dates by crop, state and county could total over 18,000.  In addition a given county could have multiple dates depending on the types and or practices.
  • Iowa - Corn:5-31 / Soybeans: 6-15
  • Illinois - Corn: 5-31 & 6-5 / Soybeans: 6-15 & 6-20
  • Indiana - Corn: 6-5 / Soybeans: 6-20
  • Kansas - Corn: 5-20 & 5-31 / Soybeans: 6-25 & 6-30
  • Michigan - Corn: 6-5 / Soybeans: 6-15
  • Minnesota - Corn: 5-31 / Soybeans: 6-10
  • Missouri - Corn: 5-25 through 6-5 / Soybeans: 6-20 & 6-25
  • North Dakota - Corn: 5-25 & 5-31 / Soybeans: 6-10
  • Nebraska - Corn: 5-25 & 5-31 / Soybeans: 6-15
  • Ohio - Corn: 5-25 & 5-31 / Soybeans: 6-15
  • Pennsylvania - Corn: 6-10 / Soybeans: 6-10 & 6-20
  • South Dakota - Corn: 5-25 & 5-31 / Soybeans – 6-10
  • Wisconsin - Corn: 5-25 & 5-31 / Soybeans: 6-10 & 6-15
 
Don't forget that the USDA releases the "Crop Production" and "WASDE" reports tomorrow(5/10/2013) at 11AM CST.  If you follow the link below I will have my guys send you my break down.  Thanks

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COMMENTS (1 Comments)

Freeport, IL - Freeport, IL
It becomes a guessing game, whether to take prevent planting or continue planting during the late plant period. Our guesses show, if one expects corn prices to rise into the fall, because of reduced US production, than planting corn after the late date may be more attractive than prevent planting. If one does not expect higher fall insurance price than prevent planting makes sense if the cost of not planting can be reduced enough. (Need to make sure prevent planting nets enough after cost.) In our area late planted soybean yields hold up fairly well and with the increase chance of an insurance indemnity (although at a declining level each day after the late plant date), continuing to plant beans in the late planted period may make more sense than prevent planting soybeans. The late planted soybeans will generally not net as well as prevent planted corn (depends on fixed cost already in the crop that cannot be recouped). So one need to know the acres that are available for prevent plant corn as to not plant too many acres of late planted soybeans reducing prevent planted corn acres. It is worth a talk with your agent. Freeport, IL
11:58 PM May 9th
 

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