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As Insurance Deadline Looms, US Farmers Face Hard Choices

30 May 2019

Farmers across the US Midwest will be forced to make some hard decisions in the next few days and weeks as rain-drenched fields have turned the 2019 corn planting season into one of the worst on record.

“Final planting dates” for insurance purposes are quickly approaching, and farmers must soon decide whether their sodden fields can be salvaged or should be abandoned for the year. They must conduct an intense set of calculations to best assess what course of action will bring the highest revenue per acre. A host of unknowns, from future weather to commodity prices and trade flows, make those calculations especially complex.

The US corn crop was only 58% planted as of May 26, the USDA reported this week, far behind the five-year average of 90% and the slowest pace ever recorded as of that date. Severe flooding across much of the Midwest over the past few weeks has kept farmers from working their fields. It has also interrupted the transport of last season’s crops to export facilities—total grain tonnage moved through the Mississippi River year-to-date is down 36.6% compared with the five-year average.

Final planting dates vary by region. In Illinois, for example, the date is June 5, just days away. That marks a deadline for farmers to contact their insurance agent if they opt to leave their fields fallow and collect on their so-called prevent-plant insurance coverage, which pays about 55% of recent years’ income.

In most cases, farmers will be better off eschewing prevent-plant payments if they can still get a crop into the ground by a reasonable date. They might bet on good weather ahead and risk a late start to planting conventional corn. Research has shown, however, that yields typically are as much as 32% lower in crops planted after early-season flooding.

Another possible course of action: switch to a faster-growing crop, such as some hybrid varieties of corn, or soybeans. But this, too, can have consequences, including reduced yields, additional costs for new seed, or wasted investment if fields have previously been prepared for conventional corn.

In this Insight article, we describe which areas of the Corn Belt have the biggest planting delays following weeks of flooding. We also assess the choices farmers face as they weigh the relative risks of late planting, crop switching, and insurance payouts for fallow fields.

Read more:

What the Rains Brought
Weighing the Risks
Prevent-Plant Safety Net

What the Rains Brought

Corn-growing areas in the US Midwest most affected by excessive soil moisture are the eastern Corn Belt, including central Illinois, Indiana, and Ohio, and the Missouri River basin, along the border of South Dakota and Iowa, according to Gro Intelligence’s analysis of data from SMOS. These areas account for about 30% of total US corn production.

In the eastern Corn Belt, relentless rains in May have prevented most farmers from applying fertilizers or sowing seeds. Along the Missouri River, rainy conditions last fall saturated soils and pushed rivers to above-normal levels. The “bomb cyclone” blizzard in March, followed by rapid warming and more heavy rainfall caused flash flooding.

While corn planting was 58% complete nationally, the pace varied widely among regions. In Iowa and Illinois, the two top producing states, corn was 76% and 35% planted, respectively. Several states are at record delays behind their five-year average planted pace. Illinois is trailing its five-year average by 60 percentage points. (The state’s prior record, set in 1995, was 40 percentage points behind the five-year average.) Elsewhere, Indiana is 63 percentage points and South Dakota 65 percentage points below their average planting pace.

The map above shows relative saturation levels across the US Midwest, with excessive soil moisture shaded dark blue. The Missouri River basin, around South Dakota, is one area that has been especially inundated.


2013 and 2011 were two years in recent memory with significant planting delays, but both years were well ahead of 2019 by this stage in the growing cycle. Heavy rainfall and flash floods hit several Midwestern states in April 2013, and flood warnings were in effect from Michigan to northern Arkansas and Tennessee. By the end of May, 86% of corn was planted compared with a 90% average for the previous five years. In 2011, 86% of corn was planted by the end of May, compared with a five-year average of 95%. In April of 2011, two major storms, combined with the annual snowmelt, pushed parts of the Mississippi River to record heights and caused flooding in much of the Midwest.

For the current year, how many acres in the affected regions may be taken out of production is difficult to estimate, given farmers’ normal reluctance to leave land fallow. Some market guesses that prevent-plant acreage for corn could reach as high as 10 million acres, an unprecedented amount, have propelled corn futures prices sharply higher in recent days. By comparison, prevent-plant acreage for corn for the 2013 crop year was 3.2 million acres, while for 2011 it was 2.8 million acres.

Midwest flooding also has gummed up grain transportation along the Mississippi River, blocking barge movements in May just north of St. Louis. Total grain tonnage moved through the river is down 36.6% year-to-date in 2019 compared with the five-year average.

That should normally affect prices, because of grain surpluses in elevators to the north and shortages at the Gulf of Mexico. However, farmers have been reluctant to sell their stored crops due to low prices for both corn and soybeans over the past few weeks, which has kept basis prices relatively narrow. A few exceptions have emerged: Basis prices for spot deliveries to terminal elevators in Memphis reached 30 cents per bushel in early May, the highest for that period since 2013, according to data from AMS Grain.

The local basis price is the difference between the local cash price of a commodity and the corresponding futures price in the month closest to delivery. Basis price is influenced by variables such as local supply and demand, transportation costs, elevator storage capacity, the quality of the commodity, and weather volatility. Further, broad market factors like the ongoing trade war with China can influence futures prices more than local cash values and affect basis levels. The basis price is often used as a tool for hedgers and speculators looking to manage financial risk or turn a profit.

The chart above on the left shows this year’s planting progress for corn (bolded blue line) is well behind planting rates in past decades. The chart on the right shows this year’s planting progress in top corn producing states. Planting is most delayed in Ohio, Indiana, South Dakota, and Illinois.

Weighing the Risks

The ideal window for planting corn in the US Midwest has long passed. Final planting dates, in addition to acting as insurance deadlines, also mark a cutoff after which plants are at higher risk to heat and drought during their pollination phase, and to early frost late in the season. A University of Illinois study suggests that if farmers move quickly, the corn crop can be fully planted in 15 suitable field days. But with current forecasts calling for 1.5 to 4 inches of rain in the near term, a dry planting window is at least another week away.

Planting a field when it’s too wet risks damaging plants. Sidewall compaction, which occurs when heavy equipment moves over soggy soils, can restrict roots later in the season and limit plants' ability to take in water and nutrients and tolerate late-season stress. Shallow roots also make a plant more susceptible to root rot if the summer remains wet, stalk rot in a mid- to late-season drought, and other potential risks. Saturated soils also can cause a loss of nitrogen fertilizer through leaching or to the atmosphere, mainly as nitrous oxide gas. Research on corn conducted at Kansas State University has shown yield reductions from early-season flooding ranging from 5% to 32%, depending on soil nitrogen status and duration of flooding.

In 2013, Iowa suffered significant prevented-plant area. This graph highlights a few counties that were most affected. Yields in the areas that were able to be planted were below normal. Yields are likely to be similarly affected in many areas this season.


Switching to a faster-growing plant variety can buy a farmer a couple of weeks of extra time to safely get a crop into the ground and harvest it before typical freeze dates for that region. Many varieties of hybrid corn have been developed suitable to various regions and growing conditions that reach maturity more quickly, thus avoiding some risks of late planting. But these hybrid varieties typically yield less per acre than conventional corn.

Another option is to switch area intended for corn to soybeans. There are a number of reasons why this does not make economic sense in late May, but as planting is pushed into June soybeans become a viable option. Soybeans, which mature about two weeks faster than corn, also are less susceptible to hot and dry conditions than is late-planted corn.

There are potential downsides to switching to soybeans, however. Planting soybeans in the same ground that they grew last year results in a drop in yield—typically around 10%, according to long-term data compiled by Purdue University. Further, a late-season switch that throws off a 50/50 split between corn and soybeans will affect the next season's rotation and result in more soybean-after-soybean planted area.

Input decisions prior to planting will also impact a farmer's ability to switch to soybeans. If herbicides specific to corn were applied in the spring or the previous fall then soybeans aren’t an option. And if nitrogen fertilizer was already applied, then corn will likely be the best option, even if planted late. Soybeans utilize nitrogen fertilizer at a much lower rate, making the investment in fertilizer a waste. Farmers also could have difficulty obtaining high-yielding soybean seeds at such a late date.

Prevent-Plant Safety Net

For farmers, tapping prevent-plant insurance for leaving acreage idle is usually a last resort, because the policies normally pay out less in revenue per acre than would late planting or switching crops. Prevented planting is defined as a failure to plant an insured crop with the proper equipment by the final planting date or during a late-planting period. The insurance, which is available for most crops, covers floods, hurricanes, or excess precipitation that occurs during the insurance period and that also prevents other producers from planting acreage with similar characteristics.

Coverage for prevented planting is designed to cover the entirety of normal costs associated with preparing the land up to the point of the seed going into the ground, as determined by the Risk Management Agency. Maximum payouts for corn are limited to 55% of recent years’ average revenue.

Once the final planting date is reached, farmers have some options instead of receiving the prevent-plant insurance payout. They can still plant a crop during a late-planting period, which generally runs for 25 days after the final planting date but can vary by crop and region. Planting during this period, however, reduces crop insurance guarantees by 1 percentage point for each day after the final planting date. Crops planted after the late-planting period are insured at a reduced coverage rate.

Farmers also can plant a cover crop during the late-planting period and receive a full prevent-plant payment if they don’t hay or graze the cover crop before Nov. 1. Planting a cover crop after the late-planting period could qualify for partial prevent-plant insurance payouts.


Many US farmers with water-saturated fields will be closely watching weather forecasts and crunching numbers as they approach final planting dates for corn. Meanwhile, physical and financial traders will be making their own calculations forecasting planted acreage and how that affects basis and futures prices. It will be many months before the damage from a record wet spring can be accurately measured, but it is the primary focus for people all across the agricultural industry right now. Many fields are already impaired, but with informed decisions and benign growing weather, a decent season can be salvaged.

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