The crop insurance final planting date for corn was Friday, June 5, and the numbers say that those with corn yet to plant should just opt out.
For higher coverage levels of crop insurance, the University of Illinois farmdoc team says it is difficult to build situations in which planting corn has higher expected returns than taking prevent plant. This is directly related to COVID-19 says Professor Gary Schnitkey and, unlike last year where there was more profit in planting corn, that’s not the case this year.
“Our parameters are 200 APH yield and 80 to 85 percent coverage level but those don’t matter much in the decision. If you get to June 5 and haven’t planted corn and can take a prevent plant payment, then you probably should.”
That’s the case all the way down to 70 percent RP crop insurance. By the numbers Schnitkey says taking prevent plant on corn is the right decision even if herbicide and nitrogen have been applied and you throw in a fairly stout MFP payment.
“On an 85 percent coverage level 200 APH yield, you are looking at returns from prevent plant exceeding that from planting corn by over $150 per acre. So, your MFP payment would have to be over $150 per acre, which probably isn’t likely. So, again, it is just the prices that we are looking at that cause prevent plant to look much more attractive this year than last year.”
That cash price in Schnitkey’s corn budget is $3.10 a bushel. Again, at that price, even those that have applied herbicide and nitrogen are better off taking prevent plant and that remains the case if you throw in a hefty MFP payment.