Farmers nationwide have been impacted by poor weather, low prices and trade disruption. Crop insurance, disaster assistance and trade assistance payments will help farmers survive what has been a challenging 2019 crop season, but many questions still exist around what each will entail.
Farmers who were prevented from planting a crop will receive a portion of their crop insurance guarantee without the benefit of the harvest price option. For corn, that portion is 55 percent of their guarantee. That coverage is part of the Federal Crop Insurance Program, which farmers can choose to purchase and is available each year.
On a related note, the USDA Risk Management Agency (RMA) has moved the date that cover crops on acres that were prevented from planting can be hayed or grazed from Nov. 1 to Sept. 1 for this year only. The date change addresses the potential forage shortage due to this year’s weather. For additional questions please consult this FAQ from RMA.
The Minnesota Natural Resources Conservation Service is currently conducting a special sign up for farmers to receive cost-share funds through the Environmental Quality Incentives Program for cover crops for fallow fields. Farmers need to check with their local NRCS office for eligibility? and sign-up before July 12.
Additionally, on July 1 the USDA Farm Service Agency (FSA) announced farmers will have until July 15 to report prevented planting acres to maintain eligibility for FSA program benefits. This extension only applies to FSA and does not impact RMA crop insurance reporting requirements. Farmers are also encouraged to check with their local FSA office regarding prevented plant provisions for Noninsured Crop Disaster Assistance Program.
Prevented Planting, Actual Production History (APH) and Yield Exclusion
Crop insurance uses APH to establish coverage. Farmers are eligible to exclude eligible yields from their production history in years where a natural disaster or extreme weather impacts their yield in a particular year. As long as conditions are met, farmers can exclude yields from more than one year in their APH.
Crop years are only eligible to be excluded when the per planted acre yield for the county is at least 50 percent below the simple average of the per planted acre yield for the crop in the county for the previous 10 consecutive crop years. RMA will identify crop years eligible to be excluded.
Supplemental Disaster Aid
A $3 billion supplemental disaster aid bill was passed by Congress, but the total covers a wide range of events, in addition to flooding in the Midwest. As of now, it is not known how the money will be distributed.
What we do know is the disaster bill includes coverage for lost stored grain due to flooding, which is not covered by crop insurance. The disaster bill also includes the option for Secretary Perdue to supplement prevented planting crop insurance coverage.
In addition, the disaster bill allows USDA to indemnify a producer on losses (including on prevent planting losses) through crop insurance and disaster aid up to 90 percent of a loss if the producer has crop insurance. However, it is exceedingly unlikely that coverage will be boosted to the 90 percent level, with some speculating there could be an extra 10 percent on top of crop insurance coverage. And, sources also indicate that, while no final decision has been announced, USDA is exploring the possibility of incorporating the Harvest Price into prevent plant coverage.
Market Facilitation Program
Due to ongoing trade disputes, President Trump ordered USDA to administer a $16 billion package for farmers who experienced trade disruption. While we know the total amount, the methodology and payment rates have not been published and likely will not be announced until at least mid-July.
The Minnesota Corn Growers Association will continue to work with its national partners to advocate that America’s corn farmers receive adequate temporary relief.
For additional details on each package, click here.