2019 Prevent Plant Still Has Market Implications

11:54AM Jan 29, 2020
Prevent Plant 2019
Planting in 2019 brought a myriad of challenges for corn and soybean farmers.
( Sonja Begemann )

“On our farm [prevent plant] wasn’t a choice; it was muddy and our tractors would have torn up the ground irreparably—we took a lot of prevent plant,” says DuWayne Bosse, Britton, S.D., corn and soybean farmer and broker for Bolt Marketing. “For the first time in the history of our farm, we were not able to work the prevent plant acres to prepare them for the next year.”

South Dakota ranked No. 1 in prevent plant in 2019 with 3.9 million unplanted acres. This state alone represented nearly 20% of all prevent plant fields.

This past year's record prevent plant acres won't just affect last season's marketing, but will continue to play out this year. Ending stocks aren’t as high as originally predicted, and 2020 could be another year with higher-than-normal PP. What does this mean for marketing? In addition, do farmers who have to take another year of PP have any options?

“The unfortunate truth is, when you have to take PP you have no upside; check you receive is all you’re going to get,” Bosse says. Many farmers who took PP in 2019 held onto their 2018 crop longer because they assumed there would be a huge rebound. Bosse says you shouldn’t change your marketing program.

“When there is a spike in crop prices, take advantage of it just like a normal year,” he adds.

In terms of 2019, ending stocks are slightly down from predictions, but they’re still healthy. Plus, even if farmers see six to eight million acres of PP, as Bosse expects, in 2020, that still means there are more than 10 million acres coming back into production, Bosse says. “We can still have healthy 2020 corn, soybean and wheat ending stocks.”

He anticipates any potential rally would be in soybeans based on PP soybean acres in North Dakota and potential for more China demand. Add that with any potential production issues in Brazil, and farmers might see a jump.

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