Grain Test Weight Considerations for Corn

R.L. (Bob) Nielsen
Agronomy Dept., Purdue Univ.
West Lafayette, IN 47907-2054
Email address: rnielsen at purdue.edu
Twitter: @PurdueCornGuy

Among the top 10 most discussed (and cussed) topics at the Chat ‘n Chew Cafe during corn harvest season is the grain test weight being reported from cornfields in the neighborhood. Test weight is measured in the U.S. in terms of pounds of grain per volumetric “Winchester” bushel. In practice, test weight measurements are based on the weight of grain that fills a quart container (37.24 qts. to a bushel) that meets the specifications of the USDA-AMS (FGIS) for official inspection (Fig. 1). Certain electronic moisture meters, like the Dickey-John GAC, estimate test weight based on a smaller-volume cup. These test weight estimates are reasonably accurate but are not accepted for official grain trading purposes.

The official minimum allowable test weight in the U.S. for No. 1 yellow corn is 56 lbs/bu and for No. 2 yellow corn is 54 lbs/bu (USDA-AMS (FGIS), 1996). Corn grain in the U.S. is marketed on the basis of a 56-lb “bushel” regardless of test weight. Even though grain moisture is not part of the U.S. standards for corn, grain buyers pay on the basis of “dry” bushels (15 to 15.5% grain moisture content) or discount the market price to account for the drying expenses they expect to incur handling wetter corn grain.

Growers worry about low test weight because local grain buyers often discount their market bids for low test weight grain. In addition, growers are naturally disappointed when they deliver a 1000 bushel (volumetric bushels, that is) semi-load of grain that averages 52-lb test weight because they only get paid for 929 56-lb “market” bushels (52,000 lbs ÷ 56 lbs/bu) PLUS they receive a discounted price for the low test weight grain. On the other hand, high test weight grain makes growers feel good when they deliver a 1000 bushel semi-load of grain that averages 60 lb test weight because they will get paid for 1071 56-lb “market” bushels (60,000 lbs ÷ 56 lbs/bu). Continue reading

Gibberella Ear Rots Showing up in Corn: How to Tell It Apart from Other Ear Rots

Author(s): Pierce PaulFelipe Dalla Lana da Silva

Over the last two weeks, we have received samples or pictures of at least two different types of corn ear rots – Gibberella and Trichoderma. Of the two, Gibberella ear rot (GER) seems to be the most prevalent. Ear rots differ from each other in terms of the damage they cause (their symptoms), the toxins they produce, and the specific conditions under which they develop. GER leads to grain contamination with mycotoxins, including deoxynivalenol (also known as vomitoxin), and is favored by warm, wet, or humid conditions between silk emergence (R1) and early grain development. However, it should be noted that even when conditions are not ideal for GER development, vomitoxin may still accumulate in infected ears.

A good first step for determining whether you have an ear rot problem is to walk fields between dough and black-layer, before plants start drying down, and observe the ears. The husks of affected ears usually appear partially or completely dead (dry and bleached), often with tinges of the color of the mycelium, spores, or spore-bearing structures of fungus causing the disease. Depending on the severity of the disease, the leaf attached to the base of the diseased ear (the ear leaf) may also die and droop, causing affected plants to stick out between healthy plants with normal, green ear leaves. Peel back the husk and examine the suspect ears for typical ear rot symptoms. You can count the number of moldy ears out of ever 50 ears examined, at multiple locations across the field to determine the severity of the problem.

Ear rot symptoms

Continue reading

Do your Ears Hang Low? – Premature Ear Declination in Corn

Collapsed ear shank of droopy ear

Collapsed ear shank of droopy ear

Taken from Purdue Extension, Chat and Chew Cafe – September 11, 2020 – Issue 2020.24 – By Bob Nielson

Droopy ears are cute on certain breeds of dogs, but droopy ears on corn plants prior to physiological maturity are a signal that grain fill has slowed or halted. Ears of corn normally remain erect until some time after physiological maturity (black layer development) has occurred, after which the ear shanks eventually collapse and the ears decline or “droop” down. The normal declination of the ears AFTER maturity is desirable from the perspective of shedding rainfall prior to harvest and avoiding the re-wetting of the kernels. PREMATURE ear declination, however, results in premature black layer formation, lightweight grain, and ultimately lower grain yield per acre.

What Causes Premature Droopy Ears? The most common contributing factor is severe drought stress that extends late into the grain-filling period. I have seen droopy ears in quite a few fields around Indiana these past few weeks in areas afflicted with severe drought stress. Even though Indiana has not experienced a lot of excessively hot (≥ 95o F) days in 2020, drought conditions coupled with sunny days and unusually low humidity (i.e., low dew point temperatures) result in significant evapotranspiration demands on the crop during grain filling. In most of the affected fields, the severity of leaf rolling and premature leaf death (senescence) due to drought stress was also high. Continue reading

Tar Spot – What is it?

Figure 2. Tar spot symptoms on leaves both on the lower and the upper canopy. (Photo Credit: Darcy Telenko)

While I have been out in Paulding county scouting in the last week, I have not noticed any tar spot in our cornfields as of yet.  It could be there though as I am not walking in every field. I wanted producers to take note of what Tar Spot looks like and some monitoring from our neighbors in Indiana and information from a previous CORN New Article.  Continue reading

Potential for Nitrate Problems in Drought Stressed Corn

Have very dry soil conditions increase the potential for toxic levels of nitrates in corn harvested for silage? Nitrates absorbed from the soil by plant roots are normally incorporated into plant tissue as amino acids, proteins, and other nitrogenous compounds. Thus, the concentration of nitrate in the plant is usually low. The primary site for converting nitrates to these products is in the growing leaves. Under unfavorable growing conditions, especially drought, this conversion process is slowed, causing nitrate to accumulate in the stalks, stems, and other conductive tissue. The highest concentration of nitrates is in the lower part of the stalk or stem. For example, the bulk of the nitrate in a drought-stricken corn plant can be found in the bottom third of the stalk. If moisture conditions improve, the conversion process accelerates, and within a few days, nitrate levels in the plant return to normal. Continue reading

Corn Silage Harvest Timing

The milk-line of on these ears is about one-fourth to one-third down the kernel. This stage might be about right for oxygen-limited silos but could be too late for conventional tower or bunker silos.

Silage harvest has begun in some parts of Ohio. Proper harvest timing is critical because it ensures the proper dry matter (DM) concentration required for high-quality preservation, which in turn results in good animal performance and lower feed costs. The proper DM concentration is the same whether it is a beautiful, record-breaking corn crop or a severely drought-stressed field with short plants containing no ears.

The recommended ranges for silage DM are:

Bunker: 30 to 35%

Upright: 32 to 38%

Sealed upright 35 to 40%

Bag: 32 to 40%

Chopping corn silage at the wrong DM concentration will increase fermentation losses and reduce the nutrient value of the silage.  Harvesting corn too wet (low DM concentration) results in souring, seepage, and storage losses of the silage with reduced animal intake. Harvesting too dry (high DM concentration) promotes mold because the silage cannot be adequately packed to exclude oxygen. Harvesting too dry also results in lower energy concentrations and reduced protein digestibility. Continue reading

Corn Smut in my Fields

Last week on our Coffee Talk, we had a producer talking about Corn Smut.  Today, as I listened to the Michigan State virtual breakfast, they were talking about Corn Smut also.

Here is a little bit of information about Corn Smut from Peter Thomlison, retired Corn Specialist from OSU.

Corn Smut

Source: P. Thomison, OSU

Common Corn Smut in-ears at R5   Source: P. Thomison, OSU

Source: P. Lipps, OSU Plant Pathology

Source: P. Lipps, OSU Plant Pathology

Symptoms: The smut gall is composed of a great mass of black, greasy or powdery spores enclosed by a smooth white covering of corn tissue. The gall may be 4-5 inches in diameter. The corn plant may be infected by smut at any time in the early stages of growth, but becomes less susceptible after the formation of the ear. Above-ground parts may be infected, but it is more common to see the smut galls on the ears, tassels, and nodes than on the leaves, internodes, and brace roots. After the spores mature, the covering becomes dry and brittle, breaks open, and the spores sift out. Greatest yield losses occur when the ear becomes infected or if the smut gall forms on the stalk immediately above the ear. Common corn smut is not associated with mycotoxins. In Mexico, immature smut galls are consumed as an edible delicacy.

Cause: Corn smut is caused by the fungus, Ustilago zeae, that survives as a resistant spore over winter, and possibly for 2 to 3 years in the soil. These spores can be blown long distances with soil particles or carried into a new area on unshelled corn and in manure from animals that fed on infected corn stalks. Spores germinate in rainwater that has collected in the leaf sheaths. This leads to infections that are visible in 10 days or more. Wounds from various injuries (including hail, wind, and insects) provide points for the fungus to enter the plant.

The smut fungus is sensitive to temperature and moisture changes. In a warm season, the amount of smut is related closely to the amount of moisture in the soil, especially during June. When temperatures are lower than normal, there may be little smut even though soil moisture may be high.

Management: Seed treatment is of no value for smut control because few spores are on the corn seed.

Spraying for corn borer control helps in cases when insect populations are high. Avoid injury of roots, stalks, and leaves during cultivation. Tillage to bury diseased corn stalks in the fall will help give some control.

References: White, Donald G. (ed.). 1999. Compendium of Corn Diseases (3rd Edition). APS Press, The American Phytopathological Society.

Making Corn Silage in Dry Conditions

The primary goal of making corn silage is to preserve as many nutrients in the corn plant as possible, to produce a feed that is acceptable to cows, and to minimize any risks associated with feeding the silage.  The following are important considerations for making corn silage when growing conditions have been dry.

Chop at the correct dry matter concentration (Editor’s note: see the accompanying article “Corn Silage Harvest Timing”). Drought-stressed corn plants are often much wetter than they appear, even if the lower plant leaves are brown and dried up.  Before starting chopping, sample some plants (cut at the same height as they will be with the harvester) and either analyze DM using a Koster tester or microwave or send it to a commercial lab (turn-around time may be a few days if you send it to a lab).  If the plants are too wet, delay chopping until the desired plant DM is reached.  The plant may continue to accumulate DM (increase yield), and you will not suffer increased fermentation losses caused by ensiling corn that is too wet. Continue reading

The Ohio Crop Tour Goes Virtual

This article originally appeared in Ohio’s Country Journal and Ohio Ag Net

Due to the COVID-19 pandemic, the Ohio Ag Net and Ohio’s Country Journal crop tour is moving to a virtual experience for 2020! We are inviting growers from across Ohio to send in their yield data using the form below. This data will be posted completely anonymously, however, we are asking you to enter your contact information to be eligible for a drawing for a $500 gift card to Rural King. Each field entry is another entry for the drawing.

Worksheets

Print our handy worksheets to help you with your calculations and to take notes in the field! You are free to make as many copies as you would like.

Click to download the corn worksheet.

Click to download the soybean worksheet.

Click to submit your data.

Revisiting Corn Use for Ethanol

By: Todd Hubbs, Department of Agricultural and Consumer Economics, University of Illinois.  farmdoc daily (10):133

Stronger export numbers and lower acreage boosted corn prices since the end of June.  Concerns about demand weakness in ethanol production emerged recently.  A recovery in economic activity helped ethanol plants ramp up production as gasoline demand increased.  A resurgence in virus incidences threatens ethanol production over the short run and injects uncertainty into long-run prospects.

Gasoline demand recovered to almost 89 percent of pre-coronavirus lockdown levels in early July.  Despite this positive development, the recovery in demand flattened out over the last few weeks.  Gasoline stocks began to recede but still sit substantially above levels seen at this time of the year.  Attempts to reopen the economy hit a snag as the virus spread rapidly around the country after initial hopes saw a rapid opening in many areas.  At 8.648 million barrels per day, demand recovered substantially from the low point of 5.311 million barrels per day seen in early April.  The path back to normal gasoline demand levels appears stalled.  Ethanol production followed this recovery and will feel the implications of flattening gasoline use. Continue reading

Drought Projections Do Not Go Well With Fungicide Applications

By Anne Dorrance and Pierce Paul, CORN Newsletter

Several calls this past week for fungicide applications on corn and soybean at all different growth stages.  So let’s review what might be at stake here.

Soybeans.  Frogeye leaf spot and white mold on susceptible varieties when the environment is favorable for disease easily pay the cost of application plus save yield losses.  Let’s dig a bit deeper.  Both of these diseases are caused by fungi but the frogeye leaf spot is a polycyclic disease, meaning that multiple infections occur on new leaves through the season while the white mold is monocyclic and the plant is really only susceptible during the flowering stage.  Both of these diseases are also limited geographically in the state.  White mold is favored in North East Ohio and down through the central region where fields are smaller and airflow can be an issue.  Frogeye has been found on highly susceptible varieties south of 70, but it is moving a bit north so it is one that I am watching.

White mold is also favored by a closed canopy, cool nights, and high relative humidity.  So farmers in these areas should double-check their variety ratings first.  If it is moderate to low score for resistance (read the fine print) then this year a spray may be warranted.  We have gotten consistent control of white mold with Endura at R1.  Herbicides that are labeled for white mold suppression have also knocked back this disease, but if a drought occurs or no disease develops, losses of 10% or greater can occur due to the spray alone.  For these purposes, R1 is a flower on the bottom of 1/3 of the plants in the field. Continue reading

Choosing The Right Nitrogen Rate For Corn Is Important To Profitability

Nitrogen (N) rate on-farm trial in the field with hog manure applied in early August the previous year. The 16-row strips that are the most yellow-green only received 30 lbs N / acre as a starter fertilizer and no sidedress N application. The economic optimum N rate for the trial turned out to be 147 total lbs of N applied per acre, with an average yield of 234 bushels/acre. The photo was taken on 14 August. (Source: Bob Nielsen, DJI Zenmuse X4S camera on DJI Matrice 200 UAV at 400 ft flight altitude.)

By: Jim Camberato and Bob Nielsen Purdue University

Although nitrogen (N) fertilizer can be costly, it is needed to optimize profit in Indiana cornfields. Applying too little N reduces profit by reducing grain yield. Too much N does not return value and can also damage the environment.

Results from 167 field-scale N response trials conducted over more than 10 years underpin current region-based N recommendations. These data-driven N recommendations replaced the old yield-goal based system1, which was proven ineffective. Current recommendations represent the N rate for maximum profit over the long-term, but differences in soil type, management, and weather can result in lower or higher N requirements in any given situation. Rainfall after N application will primarily determine the efficiency of applied N2, with excessive rainfall causing higher N loss and greater need for fertilizer N.  Although N applied prior to planting this season has not been subject to conditions promoting N loss in most areas of Indiana, N loss can occur season-long, particularly prior to the V8 growth stage when corn N uptake and water use are relatively low. Continue reading

OSU Extension Seeking Farmer Cooperators for Fallow Syndrome eFields Trial

By:  Stephanie Karhoff, AgNR, Williams County

Wet weather conditions last spring prevented Williams County farmers from planting over 85,000 acres (USDA-Farm Service Agency Crop Acreage Data). When fields are left unplanted or fallow, there may be a decline in beneficial mycorrhizal fungi, which is commonly referred to as fallow syndrome.

Mycorrhizae are beneficial fungi that colonize plant roots. They aid plants in scavenging for soil nutrients, by extending the root system via thread-like structures called hyphae. In return, plants provide sugars produced during photosynthesis to the mycorrhizae.

Stunting and phosphorus deficiency are common symptoms associated with the fallow syndrome. Continue reading

2020 Northwest Ohio Crops Day

Received from Garth Ruff, Extension Educator, Henry County

Join Henry County OSU Extension Office on Friday, February 7 from 8:00 a.m. to 3:30 p.m. for the 2020 Northwest Ohio Crops Day at the Bavarian Haus (3814 SR 18, Deshler, Ohio). Highlighting this year’s program is Greg Roth, Penn State University Extension grain crops specialist. Other speakers include Ben Brown, Mark Loux, Aaron Wilson, Greg Labarge, and Bruce Clevenger. Vendors will also be onsite.

The registration fee is $35 by January 30, or $45 after the deadline. Light breakfast, lunch, and a presentation folder are included in the registration fee. Register at 419-592-0806 or ruff.72@osu.edu.

Education credits offered are:  1-hr ODA Fertilizer Recert; 3-hrs ODA Private Pesticide (Cat 1, 2, 6, CORE) Recert; 2.5-hrs ODA Commercial Pesticide (CORE, 2c, 10c); and 4.5-hrs CCA.

Please see the schedule of the day here: https://cpb-us-w2.wpmucdn.com/u.osu.edu/dist/4/75282/files/2019/12/2020-NW-OH-Crops-Day-Web-Flyer_Page_1.jpg

Corn – Soybean Day in Fulton County – January 17

From Eric Richer, Fulton County Ag/NR Educator

Please hold Friday, January 17, 2020, for the annual NW Ohio Corn-Soybean Day in Archbold at Founders Hall on the Sauder Village Campus.  Program runs from 8 am to 3 pm and includes a 3 hr Private Pesticide recertification plus 1 hour fertilizer; 2.5 hrs Commercial Recertification including 2d, 2c, core and fertilizer; and 4 hours of CCA credits. Prepaid registration is $35 if postmarked by Wednesday, January 8th.  A registration form/agenda for attendees is attached; print and send in ASAP with payment.  Please see the agenda for the day, located here: 2020 Corn-Soy Day agenda

Prevented Planting Decision for Corn in the Midwest

Taken from May 14, 2019 farmdoc daily (9):88

Gary SchnitkeyKrista SwansonRyan Batts
Department of Agricultural and Consumer Economics, University of Illinois

Carl Zulauf, Department of Agricultural, Environmental and Development Economics, Ohio State University

Continued wet weather and saturated soils over much of the Midwest suggest that many farmers will be facing decisions on whether to take prevented planting.  Prevented planting is available for those individuals purchasing the Common Crop Insurance (COMBO) product. Once the final planting date has arrived, the farmer can choose to take a prevented planting payment, plant corn, or plant soybeans or another crop. A cover crop can be planted on prevented planting farmland, but there are restrictions on haying and grazing the cover crop. In many cases, taking the prevented planting payments will have higher expected returns than planting.  However, market and policy dynamics this year make forming expectations on alternatives very difficult.   This article discusses considerations in making these decisions.

Need to Contact Crop Insurance Agents

Farmers who are considering taking prevented planting payments need to contact their crop insurance agents.  Eligibility and reporting requirements are key to assuring that a prevented planting payments can be received.  Moreover, for farmers electing prevented planting payments, the payments will be significant sources of farm income this year.  As a result, getting the details wrong can have large impacts on the financial positions of farms.

Eligibility for Prevented Planting Payments.

Prevented planting payments are eligible for plans in the Common Crop insurance (COMBO) policy.  These plans include Revenue Protection (RP), RP with the harvest price option, and Yield Protection.

For corn, the full prevented planting payments will be 55% of the guarantee. A buy-up option to 60% was available at crop insurance signup.  Take, as an example, an RP policy at an 85% coverage level and a 200 Trend-Adjusted Actual Production History (TA-APH) yield for corn.  The projected price for corn in 2019 is $4.00 per bushel.  In this case, the prevented planting payment in is $374 per acre (55% prevented planting payment times 85% coverage level times 200 TA-APH yields times $4.00 projected price). Lower RP coverage levels will have lower prevented planting payments.

Note also that the harvest price does not enter into prevented planting payments.  Prevented planting payments will not increase if the harvest price is above the projected price, even on RP policies.

Some farmers purchased the Supplemental Coverage Option (SCO) this year.  Prevented planting payments are not made on SCO coverage, only on the underlying COMBO product.

Prevented planting payments are not available on Area Risk Protection Insurance (ARPI) policies or Margin Protection.

Linkages between Commodity Title Programs and Market Facilitation Program Payments

Receiving prevented planting payments will not influence Agricultural Risk Coverage (ARC) or Price Loss Coverage (PLC) payments.

However, taking prevented planting claims could influence payments from a 2019 successor to the 2018 Market Facilitation Program (MFP). In 2018, the MFP resulted from President Trump Administration’s desire to compensate farmers for losses due to trade disputes. Payments were $1.65 per bushel for soybeans and $.01 per bushel for corn on 2018 production.  If prevented planting is taken, no bushels will be produced and any future MFP-like payments paid by bushel produced will not occur. If the program is repeated, 2019 MFP payment levels could be different than in 2018. The program could have a different structure. Press articles suggest that aid will be forthcoming to farmers, although no plans for distribution have been released at this time (see Reuters).

Acres Eligible for Prevented Planting

Each insurable unit will have different acres eligible for prevented planting.  Knowing how many acres are eligible is key to not being surprised when making prevented planting decisions.  Crop insurance agents can aid in determining acres eligible for prevented planting payments.

As a general guideline, the maximum acres eligible for prevented planting payments equal the maximum acres of corn planted in the last four years in that insurable unit, adjusted for acreage increases, fewer corn acres planted in 2019.  Other planting requirements come into play as well.

As a simple example, take a 100-acre insurance unit that has remained the same size in the last four years. If the maximum number of acres in corn in one of the four years is 75 acres, then 75 acres is the maximum number of acres on which prevented the planting of corn can be taken.  If this farm gets 50 acres of corn planted, then only 25 acres are eligible for a prevented planting payment on corn.

Farmer-paid Premium and Enterprise Units

Enterprise units have significantly lower premiums than basic or optional units. To be eligible for an enterprise unit, a farmer must plant the lower of 20 acres or 20 percent of planted acres in at least two sections. Note that the requirement is based on planted acres.  Prevented planted acres do not enter into the calculations. If no planting occurs, the farm will receive prevented planting payments, but will not be eligible for the lower enterprise unit premiums.

APH Yields

Generally, prevented planting will not impact the APH yield in future years unless a second crop is planted on prevented planting acres.

Take as an example an insurable unit that has 500 acres and 400 acres are planted to corn. Prevented planting payments are taken on 100 acres and a second crop is not planted on those 100 acres. In this case, the yield used in calculating the APH for this insurable unit will be based on production from the 400 planted acres divided by 400 planted acres.

Decisions Following the Final Planting Date for Crop Insurance Purposes

For crop insurance purposes, the final planting date for a crop is key.  After the final planting data has arrived, a prevented planting payment can be taken.  There also is a late planting period that varies by state and crop and is 20 days after the final planting date for corn in Illinois.  Planting of corn after the final planting date can still occur, but the insurance guarantee is reduced 1% for each day the crop is planted after the final planting date.  After the 20 days late planting period, the guarantee will be 60% of the original guarantee.

Final planting dates for corn in most Midwest states will arrive soon. It is May 25 for much of the Great Plain states, upper Minnesota, and upper Wisconsin; May 31 for southern Minnesota, southeast North Dakota, southeast South Dakota, most of Wisconsin, Iowa, northeast Missouri, extreme southern Illinois, and Kentucky; and June 5 for most of Illinois, Indiana, Ohio, and Michigan. A map showing these dates is available in the May 7 farmdoc daily article.

Once the final planting date arrives, a farmer with a COMBO product has four options:

  1. Take a prevented planting payment and not plant a crop to be harvested or grazed.
  • The prevented planting payment equals 55% of the guarantee unless an additional 5% buy-up to 60% was purchased. Take a Revenue Protection (RP) policy at an 85% coverage level and a 200 bushel per acre Trend-Adjusted Actual Production History (TA-APH) yield. Given a 55% prevented planting payment factor, the prevented planting payment is $374 per acre (55% payment factor x 85% coverage level x 200 TA-APH yield x $4.00 projected price).
  • APH yield is not impacted. If all acres in the insurable unit are not planted, the 10-year history will not change between 2019 and 2020. If some acres are planted, the average yield on planted acres will enter the APH history.
  • Full prevented planting payment for an insurable unit requires no field crop is harvested in 2019 on prevented planting acres on that insurable unit.
  • A cover crop can be planted and fully prevented planting payment received if the cover crop is not hayed or grazed before November 1.
  • The full farmer-paid premium for corn must be paid on the prevented planting acres. Note that farmer-paid premiums may be higher if the enterprise unit requirements are not met (see above discussion).
  1. Plant corn.
  • No prevented planting payment will be received.
  • Acres will be insured but the guarantee will decrease throughout the late planting period. Again, take an RP policy with an 85% coverage level, a $4.00 projected price, and a 200 TA-APH yield. Before the final insurance planting date, the minimum revenue guarantee is $680 per acre. This guarantee will be reduced by 1% for each day after the final insurance planting date. The guarantee will be $673 per acre one day after the final planting date, $666 per acre two days after the final planted date, and so on. After 25 days, the guarantee is fixed at 60% of the original amount, or $408 per acre (60% times $680).
  • In most cases, the 2019 yield will enter the APH history and impact future APH yields on acres planted to corn. The only exception would be if Yield Exclusion is declared for a county, allowing the yield for that year to be not included in APH histories.
  • The farmer must pay all of the farmer-share of premium on corn.
  1. Plant another crop. A farmer can plant another crop on acres intended to be corn. In most of the Midwest, this crop will be soybeans.
  • No prevented planting payment is received.
  • If the farmer signed up for crop insurance on the planted crop for the insurable unit, the acres will be covered by that policy. The insurance guarantee is not reduced until that crop’s final insurance planting date is reached. For soybeans, this date ranges from June 10 to June 30 in Midwest states (see farmdoc daily, May 7, 2019 for maps of final planting dates). If the crop that is planted was not signed up for insurance on that insurable unit, crop insurance cannot be purchased at the final sales date has passed.
  1. Take 35% of the corn prevented planting payment and plant another crop for harvest after the late planting period.
    1. In this option, the corn prevented planting payment equals 35% of the full prevented planting payment. In double-crop situations, obtaining the full prevented planting payment while planting double-crop soybeans is possible.
    2. The crop must be planted after the late planting period for corn.  This date will be in late June. Key management questions are whether an adequate stand will occur and whether an early frost will reduce yield.

The following discussion will focus on options 1 through 3.  Option 4 will be dealt with in a farmdoc daily article after the final plant date has occurred.  Option 1 is a precursor of option 4.  It is unlikely that option 4 will have a higher expected return than option 1.

Calculating Expected Returns from the Three Options

The farmdoc Prevented Planting Module will be used to aid in making calculations for each alternative. The Prevented Planting Module is part of the Planting Decision Model, a Microsoft Excel spreadsheet within the FAST series available for download on farmdoc (here). The specific spreadsheet is available (here).

Calculations will be illustrated for a farm in Champaign County, Illinois that has chosen an RP policy at an 85% coverage level.  For Champaign County, the final planting date for corn is June 5 and for soybeans is June 20. The RP policy for corn has a 200 TA-APH yields and a 55% prevented planting payment factor applies for corn. Note that the tool gives the prevented planting payment for both corn and soybeans (see Figure 1).

Prevented Planting Payment on Corn: The prevented planting payment for corn will be $374 per acre. There will be costs associated with this alternative. We built in $25 per acre of weed control costs, which could include planting a cover crop. An $18 crop insurance premium also is included. Net returns from taking prevented planting are $341 per acre. Note that land and other costs are not included in the $341 value as they will not vary for the three options. The $341 per acre is not the net income from an acre under prevented planting.  In most cases, net income after considering overhead and land costs will be negative.

Plant Corn: Planting in this example is assumed to take place on June 6. On this date, planting will result in a slight reduction in the crop insurance guarantee to $673 per acre.  Those reductions will increase the later planting occurs during the late planting period.

In our example, the expected yield is 171 bushel per acre, as is estimated using parameters in the Prevented Planting Module. Users can override expected yields produced by the model. The expected insurance harvest price is $3.70 and the estimated harvest cash price is $3.40 in this example, close to the central Illinois market in mid-May. Given the 171 yields and $3.40 cash price, crop revenue is expected to be $581 per acre. Revenue includes a crop insurance payment of $41 per acre, bringing total estimated revenue to $622 per acre.

The example assumes that there are $469 per acre in “costs yet to be incurred”.  These are costs that can be avoided if corn is not planted, but will be incurred if corn is planted and harvested. The example shown in Figure 1 assumes that all fieldwork and all inputs still need to be applied, as is the case on many farms as a wet fall precluded much field work.  Several items to note:

  • Fertilizer costs are $145 per acre and include nitrogen, phosphorus, and potash.  If nitrogen fertilizer has already been applied, then it should not be included in costs as it has already been incurred and cannot be avoided by not planting.
  • Drying costs are at $18 per acre.  Late planted corn likely will have a higher moisture level at harvest, resulting in a higher drying charge.  Harvesting corn in the high 20 percent moisture levels could result in much higher drying charges, perhaps near $50 per acre.
  • Field operations are charged at estimates of total machinery costs. Some reduction for planting and fieldwork may be warranted, but this will change results very little.

Net revenue from planting corn is $153 per acre. This is substantially lower than the $341 per acre net revenue from taking the prevented planting payment assuming no fieldwork is done and no input has been used and that all inputs are refundable.  Again, both figures are prior to land costs and therefore not equivalent to net income.

Plant Soybeans: Soybeans planted on June 6 are estimated to have a 59-bushel yield. The harvest insurance price is $8.30 and the expected cash price at harvest is $8.00. Costs to be incurred for soybeans are $256 per acre.

Net returns from planting soybeans are $219 per acre. Planting soybeans have higher returns than planting corn, but still notably less than taking the prevented planting payments for corn.

Planting Corn versus Taking a Prevented Planting Payment

For this example, expectations are that net returns from taking corn prevented planting exceeds returns from planting either corn or soybeans. Obviously, realized prices and yields will impact returns. The Planting Decision Model prepares a table giving net returns for corn under different prices and yields. These net returns include both revenue from crop sales as well as crop insurance payments (see Table 1).  Net returns above that from taking the corn prevented planting payment are highlighted in red. Note that net returns from prevented planting are above net returns from corn planting except when prices exceed $4.25 or yields are above 200 bushels per acre. Even at 210 bushels per acre, corn price needs to be above $4.00 before planting corn has higher net returns than taking prevented planting payments.

The example in Figure 1 and Table 1 uses an 85% coverage level.  Lower coverage levels will have lower prevented planting payments and net returns:

80% coverage level:  $352 prevented planting payment and $309 net return

75% coverage level: $330 prevented planting payment and $287 net return

70% coverage level: $308 prevented planting payment and $265 net return

As net returns are lowered, planting corn will become a more attractive alternative, but, even at a 70% coverage level, expected net returns from taking prevented planting payments exceed that from planting corn.

Two other considerations in the decision to plant corn or take the prevented planting payment:

  • Planting corn has the potential to lower APH yield in the future.
  • There is a possibility of MFP-like payments on corn that are higher than the $.01 level in 2018.  Higher MFP payments could increase revenue from planting corn.

Switching to Soybeans versus Taking a Prevented Planting Payment

Soybean net returns are $219 per acre, higher than corn’s net return of $153 per acre, but still below the $331 per acre net return from taking the prevented planting payment.  Those net returns suggest taking the corn prevented planting payment has the highest expected return.  Planting soybeans have the same considerations as planting corn, but three seem critical:

  • Net returns are based on a 59 bushel per acre yield.  This yield may be high given the late planting.
  • An MFP payment in 2019 similar to the 2018 payment would change returns.  Adding a $1.65 per bushel MFP to the example in Table 1 would increase returns to $314 per acre, coming close to the $331 per acre net return on taking the prevented planting payment on corn.
  • Low yield in 2019 will lower APH yields in future years.

Market and Policy Dynamics

Uncertainty about market and policy dynamics cause prevented planting decisions to be more difficult this year than is typical.  Items contributing to these uncertainties include:

  • The trade war with China leads to uncertainty about the level of soybean exports from the United States.
  • The presence of African Swine Fever in southeast Asia further reinforces the potential for lower export demand for soybeans.
  • The likely existence of a successor to the Market Facilitation Program in 2019 could influence market dynamics. Press reports suggest that President Trump’s administration is considering about $15 billion in aid to American farmers, more than occurred in 2018.  If this aid is tied to production as the 2018 MFP payments were, decisions related to prevented planting will impact MFP-like returns, potentially changing decisions of farmers.
  • The late planting contributes to uncertainty about acreages that will be planted and yields that will be harvested in the U.S.

In a late planting year, the expected dynamics are for corn acres to decrease and soybean acres to increase, leading to upward pressures on corn prices and lower soybean prices.  Offsetting these movements would be MFP payments at 2018 levels: $.01 per bushel for corn and $1.65 per bushel for soybeans.  The level of MFP payments in 2019 could offset the current lower soybean prices.  How this will impact planting decisions and resulting market conditions is difficult to predict.

At this point, market dynamics in corn and soybean markets are being influenced by elements not seen in the past, causing difficult projections to be even more uncertain.

Summary

Prevented planting decisions are always difficult, but the market and policy dynamics make 2019 decisions even more difficult.  Given no MFP-like payments, our analysis suggests that prevented planting has the highest expected return relative to planting corn or planting soybeans.  An individual’s situation will matter.  In particular, planting may be more economical if some of the inputs, especially fertilizer on corn, have already been applied.

An individual’s expectation on another round of aid similar to last year’s MFP payments also will influence planting decisions.  Press reports suggest that aid is being considered and that aid will be larger than last year.  If this aid is targeted to 2019 production, incentives will be reduced to take prevented planting payments.

The above analysis is for a central Illinois farm situation.  Expected returns from the alternatives will vary across regions.  Farmers should conduct their own analysis. Still, the considerations and dynamics presented in this paper will apply to all farmers in the Midwest facing late planting decisions.

Market and policy conditions are very fluid this year. This article contains the best information available as of this date, but conditions may change.  Farmers should check with crop insurance agents when making prevented planting decisions.

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