Crop Insurance And Early Planting

Understand the risk and rules involved before you plant prior to crop insurance dates. In Iowa it's April 11 for corn, April 21 for soybeans.

Published on: Apr 6, 2012

With the exceptionally warm, dry weather we've had this spring, there are farmers who've planted some corn a month or so earlier than normal in Iowa. Not a lot, but some corn has been planted prior to the April 11 crop insurance date. What does that crop insurance date mean? What is involved regarding risk that the insurance won't provide coverage on this early planted corn?

"We've been warning people who are planting corn prior to the crop insurance dates that they are running the risk of their insurance policy's replant provision not providing coverage for the cost of replanting--if they end up having to replant the early-planted corn," says Steve Johnson, Iowa State University Extension farm management specialist in central Iowa.

Crop Insurance And Early Planting
Crop Insurance And Early Planting

Federal crop insurance rules set the date for early planting of corn and soybeans—as to when the coverage begins. In Iowa it's April 11 for corn and April 21 for soybeans. If you plant before those dates, the cost for replanting the early planted acres won't be covered by crop insurance. And you may need to replant if the crop freezes or you have a poor stand caused by other problems such as poor emergence or hail damage.

It's only the replant provision you violate by planting so early

"One thing people need to understand is it's only the replant provision you are violating by planting corn prior to April 11," says Johnson. Question is, are you willing to take the risk of planting early and possibly having damage occur? A frost could hit in May and kill or cripple the corn. If the corn was planted prior to April 11, crop insurance wouldn't pay for replanting.

"What the federal crop insurance rules state is you can no longer make a claim for replant coverage if you planted the corn prior to April 11," he says. "The replant maximum payments for 2012 are roughly $45 per acre on corn this year in Iowa, $38 on soybeans. Each farmer has to consider risk vs. reward. Are you willing to run the risk of putting a crop in the ground early, having it damaged and not being able to collect on your replant provision?"

USDA's Risk Management Agency has rules on early planted crops

USDA's Risk Management Agency has specific rules about early planted crops with regard to multi-peril crop insurance coverage. For each county and crop, RMA has set an "early planting date" for farm-level products such as Revenue Protection (RP) and Yield Protection (YP). The earliest planting dates allowed for in counties in the state of Iowa are April 11 for corn and April 21 for soybeans. Dates will vary in other states.

Acres planted before these dates are no longer eligible for replant coverage payments should it be necessary to replant them. The maximum replant payments each year are equal to 8 bushels of corn and 3 bushels of soybeans, times the RMA projected price for that year, which is the February average futures price for December corn and November soybeans used to establish the value of the insurance guarantees the producer purchases. For 2012 the projected prices are $5.68 per bushel for corn and $12.55 for soybeans, so the maximum replant payments are $45.44 and $37.65 per acre, respectively.

Any acres planted before the earliest planting dates lose replant coverage, even if the entire farm or insurance unit hasn't been planted. However, early planting doesn't affect a farmer's actual production history (APH) yield or revenue guarantee, as long as all other good management practices are followed throughout the growing season. That guarantee is still in effect, and any indemnity payments will depend on the final harvested yield.

Johnson strongly advises farmers to "Always contact your crop insurance agent should you have particular questions or concerns regarding your coverage."

Most Iowa corn acres have some type of crop insurance coverage

Most of the crop insurance products, whether it is YP or RP, all have this replant provision.

Did more farmers than in years past buy crop insurance in 2012? "We won't know those numbers for a while yet but I believe after holding meetings and talking to farmers in January and February, farmers really recognize the importance of crop insurance," says Johnson. "With the new Trend Adjusted yield option this year many of them are using the TA option."

Based on recent history, Johnson estimates roughly 80% of all the tillable acres in Iowa are insured with RP crop insurance policies. Smaller portions are insured with county-based products such as Group Risk Plan or GRP products, and Group Risk Income Protection or GRIP products. "All totaled, Iowa farmers insure about 90% of all the state's tillable acres so I think most Iowa farmers are eligible for this replant provision," he says.

Dates for Iowa are April 11 for corn, April 21 for soybeans

When you plant early in Iowa, before April 11 for corn and April 21 for soybeans, you violate the replant provision. You won't be able to collect roughly $45 per acre for corn and $38 for soybeans if you end up having to replant. The reason farmers want to plant corn so early is they are likely to be able to harvest it earlier than normal to catch higher prices in early September.

"Again, it's the risk versus the reward you have to consider," notes Johnson. "Are you willing to take the risk of planting early and violating the replant provision?" Keep in mind all acres that are planted early still have full crop insurance coverage for yield, or revenue, as long as the insured farmer is using good management practices. The replant coverage is what you give up when you plant before the crop insurance planting date.

It's kind of like a speeding ticket, he says. Are you willing to get a first violation and pay a fine? If you plant corn in Iowa before April 11 and soybeans before April 21 you're likely going to have to pay a fine. That is, if you don't lose your driver's license. You just won't be able to collect on the replant provision for federal crop insurance on the acres you planted so early—should you run into problems and have to replant.

This is a replant situation; you still have the other coverage

What if you plant corn early and it doesn't freeze and the crop is growing fine? But the weather turns hot and dry in July and it suffers yield damage? You'll still be covered by crop insurance. "When planting corn prior to April 11 and beans prior to April 21 we're talking strictly about a potential replant," says Johnson. "If you have other crop issues, such as drought or hail and you have yield damage--you'll still have coverage."

Another question: What happens if the reason you have to replant isn't necessarily freeze or frost related? For example, what if corn acres planted before April 11 are flooded out in May and you still have time to replant? What if they are hailed out? In these cases, since you planted those acres before April 11 they wouldn't be covered by the replant agreement.

The replanting provision is only affected by the date you put the seed in the ground, emphasizes Johnson.

If you plant an insured crop, you must keep track of information

Everyone who plants an insured crop should be keeping track of what day they planted each field and how many acres they planted. That information has to be reported on the FSA 578 form—the acreage report. You are documenting when you planted the crops.

"If your early planted corn is hailed out, you are covered by hail insurance--by the multi-peril crop insurance coverage," says Johnson. "For example, if you planted corn April 3 and it hails you out on May 20 and you still have time to replant the corn, would you be covered? Yes, you would be covered for the yield loss from hail damage because you have a multi-peril issue that occurred. But you would not be covered for replant cost."

In this case you'd miss out on getting approximately $45 an acre on corn and $38 on soybeans. As Johnson says, it's like getting a speeding ticket. If you violate the planting date—you can't collect on the replant provision.

For farm management information and analysis, go to ISU's Ag Decision Maker site www.extension.iastate.edu/agdm and ISU Extension farm management specialist Steve Johnson's site www.extension.iastate.edu/polk/farmmanagement.htm.