FOCUS ON AG
June 6, 2022
PLANTING PROGRESS IMPRPOVED IN SOME AREAS
The Spring of 2022 has been a battle for crop producers in many portions of the Upper Midwest, as they have tried to get corn and soybeans planted on a timely basis. Some favorable weather conditions during last week of May and the first few days of June has allowed for significant planting progress in the many areas; however, there is still a significant amount of corn and soybeans remaining to be planted in North Dakota, as well as in portions of Central and Northwest Minnesota. Frequent rainfall events from late April through most of May has resulted in the serious planting delays across this region. In addition, excessive rainfall and flooding also resulted in poor germination and drown-out damage in some fields that were previously planted.
Total rainfall amounts across the Upper Midwest during the month of May were quite variable; however, most areas of Minnesota, North and South Dakota received above average rainfall during the month. Some portions of North Dakota and the Northern two-thirds of Minnesota, as well as adjoining areas of South Dakota, recorded as much as 7-9 inches of rainfall or more during May. This has resulted in delayed planting, as well as some standing water, in portions of the region. In areas that received more moderate amounts of precipitation during May, planting progress and crop development have advanced further.
Based on the May 31 USDA Crop Progress Report, 86 percent of the corn in the U.S. was planted, which is nearly the same as the five-year (2017-2021) average of 87 percent planted. This was a remarkable recovery, considering that U.S. corn planting progress was only 49 percent on May 16, which was about 20 percent behind normal. The May 31 report showed that States such as Iowa, Illinois, Indiana, Nebraska, Ohio, and Wisconsin were either at normal or above normal corn planting progress levels, after being well behind normal in mid-May. The same would be true for the southern one-third of Minnesota, as well as in South Dakota, which had 86 percent of the corn planted by May 31, compared to only 31 percent planted on May 16.
The two States with slowest corn planting progress on May 31 were North Dakota at only 56 percent, compared to a normal of 83 percent planted, and Minnesota with 82 percent planted, compared to a normal 92 percent planted. However, both States made a remarkable recovery from the corn planting progress on May 16, when the percent of the corn planted was only 4 percent in North Dakota and 35 percent in Minnesota. Some additional planting progress was likely made during the first few days of June. Many of the remaining corn acres to be planted in North Dakota and the northern half of Minnesota could be very difficult to plant due to the continued wet field conditions.
The May 31 USDA Report indicated that 66 percent of the anticipated U.S. soybean acreage was planted, which was also very near the 5-year (2017-2021) average of 67 percent by that date. Similar to corn, the May 31st report showed that the largest planting progress deficits were in North Dakota with only 23 percent of the soybeans planted, compared to a 5-year average of 70 percent, and Minnesota with 55 percent, compared to the 5-year average of 80 percent. South Dakota was only slightly behind normal with 61 percent of the soybeans planted by May 31, compared to a 5-year average of 64 percent. Iowa, Illinois, Indiana, Nebraska, Ohio, and Wisconsin were either at or above normal for soybean planting progress as of May 31.
Based on data in the March 30 USDA Planting Intentions Report, it is estimated that there were approximately 4 million acres of corn and over 11 million acres of soybeans remaining to be planted in North and South Dakota and Minnesota, as of May 31. The big question with the unplanted crop acres is: “How many of the unplanted corn and soybean acres will actually get planted and how many acres will be put under prevented planting insurance coverage ?” We will probably not get a clearer indication of the final corn and soybean planting numbers until the June 30 th USDA Crop Acreage Report and the 2022 prevented planted acreage data.
CROP INSURANCE CONSIDERATIONS We have now passed the “final planting date” of May 25 or May 31 for planting corn with full insurance coverage in 2022 for North and South Dakota, Minnesota, Iowa, Nebraska, most of Wisconsin. The “late planting period” for corn lasts for the next 25 days, which would extend until June 19 in Northern Minnesota and most of North and South Dakota, as well as Nebraska. The “late planting period” for corn extends until May 31 in the Southern two-thirds of Minnesota, Iowa, and most of Wisconsin. During the 25-day “late planting period”, there is a reduction in the maximum insurance coverage level of one percent for each day that corn planting is delayed past the “final planting date” for full crop insurance coverage. Following the late planting period, the maximum crop insurance coverage is 55 percent of the original crop insurance guarantee, which is comparable to the insurance compensation for “prevented planted” crop acres.
For soybeans, the “final planting date” is June 10 in all of Minnesota and Nebraska, 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 in Iowa and the southern one-third of Wisconsin is June 15, with a late planting period lasting until July 10. As with corn, there is 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 for corn or soybeans, 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 (RP) 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. The potential insurance prevent plant payment could possibly be increased by 5 percent, if a “buy-up” option was purchased by the March 15th crop insurance deadline.
One factor that may affect prevented planting decisions are the Federal Crop Insurance policies. One provision requires farmers to have at least 20 acres or 20 percent of the total acres in an insured farm unit that can not be planted, in order to qualify for prevent plant coverage. A majority of farmers in the Upper Midwest carry a crop insurance policy utilizing “enterprise units” to insure their corn and soybean acreage, which groups all acres of a given crop in a County together for calculating potential prevented planted acres and possible insurance indemnity payments. By comparison, a crop insurance policy with “optional units”, insures crops down to individual sections within a given Township. The type of unit structure on a crop insurance policy can make a big difference when it comes to calculating prevent plant acres and potential crop insurance prevent plant payments.
Producers should contact their crop insurance agent for more details on final planting dates and prevented planting options with various crop insurance policies, before making a final decision on prevented planting. The prevented planted acres need to be reported to their crop insurance agent. The USDA Risk Management Agency (RMA) has some very good crop insurance fact sheets and prevented planting information available on their web site at: https://www.rma.usda.gov/en/Topics/Prevented-Planting
Kent Thiesse, Farm Management Analyst, has prepared an information sheet titled: “Late and Prevented Planting Options for 2022”, which contains details on prevented planting requirements and considerations, as well as Tables comparing the potential results for options of late planting or prevented planting with normal production for corn and soybeans. To receive a copy of the information sheet, please send an e-mail to: kent.thiesse@minnstarbank.com
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Note — For additional information contact Kent Thiesse, Farm Management Analyst and Sr. Vice President, MinnStar Bank, Lake Crystal, MN. (Phone — (507) 381-7960) E-mail — kent.thiesse@minnstarbank.com) Web Site — http://www.minnstarbank.com/