Weather Woes, Farmers Debate Next Move
Mother Nature has turned loose amazing rains on West Texas. Records have been broken. Fields have standing water. Playas are full. And farmers, experiencing a new extreme opposite conditions in 2011, are left debating their next move.
As farmers in the heart the of the Cotton Belt face the reality that many fields may or did not get planted by the crop insurance final plant date, there are many questions on their minds. Of all the questions, a seemingly new concept for this territory is at the top of the list—prevented planting (PP).
If a farmer takes PP on his cotton, then he has two options regarding that land. The first option is to plant a crop for harvest then take only 35 percent of the PP payment and only pay 35 percent of the cotton insurance premium. In this option, the producer will have a 2015 APH entry for the cotton unit equal to 60 percent of this year’s approved cotton yield for that unit. If the second crop is on a farmer’s policy, then it must be insured.
The second option is to plant a cover crop and not harvest, hay or graze this cover crop until Nov. 1. The farmer would not suffer any reduction in the PP cotton payment and could still hay or graze the cover crop, beginning Nov. 1. With this option, no entry is established in the APH cotton database for 2015.
In all cases, if a producer wants to plant a crop after taking cotton PP, the second crop must be planted after the end of the 7-day late planting period (LPP) of cotton. If the second crop is planted during the LPP, there will not be any PP payment.
Opportunity for Success with Sorghum
Even when the final planting date for cotton passes, there is still time to plant grain sorghum. Strong local and international demand is providing solid market opportunities for grain sorghum. As all commodity prices continue to drop, this is a very important factor to remember when farmers consider their bottom line profit potential.
Sorghum can be planted up until June 30 and be fully insured. This sorghum is eligible for the Price Loss Coverage (PLC) or Agricultural Risk Coverage (ARC) programs, depending on how the producer enrolled in the 2014 Farm Bill, if the sorghum is planted on generic base acres. Farmers who chose PLC would also be eligible for the $3.95 grain sorghum reference price guarantee, which National Sorghum Producers helped secure in the 2014 Farm Bill. Forage sorghum can also be planted even later than June 30, and, if not hayed or grazed until Nov. 1, will not reduce the cotton PP payment.
With a full moisture profile and summer sun, farmers can be sure sorghum crops have a prime opportunity for success later this summer. If you have any questions regarding your specific situation, do not hesitate to contact the National Sorghum Producers in Lubbock at 800-658-9808.
What is Prevented Planting?
Prevented planting (PP) is a particular coverage with multi-peril crop insurance policies addressing the failure to plant an insured crop with the proper equipment by the final planting date or during the late planting period. You must be prevented from planting by an insured cause of loss that is general to the surrounding area and that prevents other producers from planting acreage with similar characteristics.
The PP guarantee for most crops is 60 percent (50 percent for cotton) of the guarantee for timely planted acreage. Thus, with a 400 pound cotton APH, $0.64 cent price and 65 percent policy, the total guarantee would be $166.40; the PP indemnity would be 50 percent or $83.20. If a producer chooses to plant a second crop to harvest, the indemnity would be reduced to 35 percent or $29.12. Producers must notify their insurance agent within 72 hours after the final plant date if they wish to claim PP and not plant in the late plant period.
More information on prevented planting can be found at www.rma.usda.gov/pubs/rme/ppflood.pdf or from your local crop insurance agent.
Also published in this month’s edition of High Plains Ag