NDSU Offers Program to Compare Prevented Planting With Planting

It is decision time for many North Dakota producers because wet weather has pushed them beyond the date where they can opt for prevented planting insurance.

A comprehensive, yet easy to use, program is available to help with this difficult decision, according to Andy Swenson, North Dakota State University Extension Service farm management specialist.

The program compares prevented planting with growing either the same crop for which a prevented planting payment could be received or some other crop.

The prevented planting indemnity is offset partially by the direct costs, such cover crop seed, chemicals and fuel, to maintain the land that will not be used for crop production in 2011. This is compared with the income that could be obtained from growing the crop after the additional direct costs of production have been subtracted.

Two critical assumptions are the expected yield and market price if one seeds later. The risk of lower yields and quality is elevated. The analysis also considers crop insurance indemnities, which may be received if a producer plants the crop late and yields suffer.

“Fortunately, the crop insurance coverage level only diminishes 1 percent per day for the first several days after the date when producers can choose prevented planting,” Swenson says. “Therefore, if a producer still can plant a few days late, he or she still can have a fairly strong safety net and have the upside revenue potential on better than expected yields and market prices.”

The program is available at http://www.ag.ndsu.edu/farmmanagement/prevented-planting.

NDSU Agriculture Communication – June 3, 2011