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Senior Advisor

Re: FAUST- How are things looking South of Interstate 80 in Iowa?

How do prevent plant claims compare to disaster claims?  I've never had a prevent plant claim and it rarely happens if ever in this neck of the woods.

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Advisor

Re: FAUST- How are things looking South of Interstate 80 in Iowa?

Shaggy - prevent plant claims result in (if I remember correctly) about 60% or 70% of the original coverage at what ever level elected . . .  i.e. 70% or 75% of regular coverage.  I think an example would be (and there are people on here who know better than me) if you had an acre of soybeans insured for 75% of your yield (say 40 bu.) then you would have a yield guarantee of 30 bu. x the rate of insurance say $12.00 a bushel that would yield a full indemnity under "planted" coverage of $360 an acre.  

 

If you cannot plant, then you take 60% x $360 = $216 indemnity.  I also carry PT10 (which most do here in the rural backwater) that adds another 10%, so under this formula the total prevent plant indemnity would be around $216+21.60 = $237.60 an acre.  

 

If you elect the Harvest Price Option and prices at harvest are more than the indemnity price per bushel when you signed up, you will receive the higher price on the prevented planted bushels.  In past years, the HPO was higher in most cases than the original

priced bushels when the policy was signed.  I think that is about how it works.

 

In most cases, you are still farther ahead if you can get the crop in the ground even after the 15th of June, since after that date  you lose 1% per day on your coverage.  So if you had 75% coverage and got the crop planted by June 20th, your full coverage would be reduced to 70% of those acres planted.  

 

That is why most farmers will go ahead and run beans in up until the July 1, if they can in Southern Iowa.   Because, if you cannot get it planted your indemnity rate will never be less than what the Prevent plant payment would be. I guess the real question is the cost of the treated, and innoculated beans at $65 a bu. per acre reduce the income below what it would be if you did not go ahead and plant the crop after the 15th of June.  John

 

 

  

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Senior Advisor

Re: FAUST- How are things looking South of Interstate 80 in Iowa?

Thanks Faust, appreciate the explanation.

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