A Comprehensive Look: Should Farmers Use Prevent Plant or Plant?

09:03AM May 28, 2019
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It has been a tough spring for farmers across the Corn Belt with a wet spring, lack of planting and trade concerns.

Wet fields are stretching across the Midwest, leading to a historically slow start to spring. It’s to the point where most areas are passing the date to plant corn and be fully covered under federal crop insurance. Now, farmers have to add in yield drag, variety issues and it makes the decision harder.

“When we move to a full season corn to a mid to an early season corn, you’re going to give up yield,” said Ken Ferrie, Farm Journal Field Agronomist.

So do you plant and take a financial hit, switch to soybeans or take prevent plant?

“I’ve had some customers who say [they can’t] make money trying to plant this crop at current levels,” said Jim McCormick with AgMarket.Net.

The switch to plant more soybeans can be complicated, especially since domestic soybean stocks are much higher.

“Last year’s ending stocks [were] at 438 million bushels,” said Ted Seifried with Zaner Ag Hedge. “This year, USDA has ending stocks at 995 million bushels, under that billion bushel mark. That is more than double in the increase from what we had last year to what we had at the end of this year.”

On top of that, the department announced the second round of Trump Tariff Aid payments to farmers with limited details.

“Certainly, we have not disclosed details that would distort planting intentions or intentional purposes,” said Perdue.

USDA says it may be weeks until farmers known just how much money they could receive with the new China trade aid. Agriculture Secretary Sonny Perdue saying USDA is intentionally not releasing the new payment amounts for trade aid right now to prevent a sway in planting decisions.

“I want to let people know they need to make their planting decisions and cropping decisions, all production decisions based on where they see the market and where they see their own weather pattern and when they can get into the fields in their own area,” said Perdue.

Farmers are eligible for three possible payments. The only one guaranteed right now is expected to be released in July. Perdue says there will be a cap on how much farmers will be able to receive under payments. Will it give more of an incentive to plant something or take preventative plant payments? One analyst says generally speaking, corn acres in prevent plant usually receives a larger payment than soybeans. It also depends on a farmer’s coverage and yield.

USDA says farmers should not let the new trade aid payments determine what they plant. However, with payments in the mix, the number of acres is anyone's guess.

“The talks of 10 to 12 million prevent acres for corn and soybeans, that may be overstated at this point just for the promise of getting a payment on planted acreage,” said Seifried. “Honestly, if I’m looking the same payments for corn and soybeans. It’s a lot more attractive to plant corn, especially with the rally we just had.”

Prevent Plant Decisions 052819