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Esteemed Advisor

A question in hopes of bringing some sense of reason to the discussion

Many are speaking of farmers taking Prevented Planting and not planting the crop. In our area, in the past, it was always better to plant the crop and earn the insurance payout if yield and price declined. In many cases yields did not decline, just depends on hurricane moisture in August. Regardless of that, I am questioning if there really is an economic incentive to take PP.

 

Can some of you who are considering taking PP, or some insurance gurus,  run throught the numbers for us to prove it is economically a better choice. TIA for helping me understand the real way this insurance game is going to be played.

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Contributor

Re: A question in hopes of bringing some sense of reason to the discussion

     If you plowed in the fall instead of taking it easy with your no-till (no-dry out), you would have been done already.  You wouldn't be in a public chat room crying that you aren't done planting corn.  Fancy boy Kenny can brag about his tiling and no-tilling, but in the end he can't get his work done in bad weather.

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Advisor

Re: A question in hopes of bringing some sense of reason to the discussion

Frankly John..you might be right. There is a lot to say about the drying of conventional or mulch till soils as opposed to no-till soils. That is...unless someone put a cover crop out..and knows how to manage it. So..when the powers that be decide that they don't want your manure, sediment and fertility washing off your fields over the winter, filling their ditches..and rivers... you're going to be asking someone who's been no-tilling a few years how to go about it. Hope you don't mind when they tell you to figure it out yourself.

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Senior Contributor

Re: A question in hopes of bringing some sense of reason to the discussion

What's the matter you got a burr up your butt!!! Or maybe you sold all your corn too soon at $4.75.

 

Do you have any friends in your own community? Mosty likely not!

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Esteemed Advisor

Re: A question in hopes of bringing some sense of reason to the discussion

Well John, glad to see your willingness to expose your ignorance behind a screen name.   :-)

 

If you were better informed, you would know that we were the first to plant beans in our township. Yes, we started corn 12 hours after the neighbors, who frankly have invested over $350k to plant that first 100 acres in tough conditions. They are very good folks who know how to do it extremely well without costing yield potential. They were paying us to tile for them while they planted. Both of us won that afternoon. As I said, they are very good people.

 

Maybe we just make you drink the run-off from your fields. Or, maybe just make your wife give it to your dogs and cats. As someone once said, "facts are tough things."

 

So, since I am not complaining about not having the crops planted, how about we get back to my question which has SERIOUS implications for risk management for everyone. We have always got the crop planted, yields keep increasing,  and we will this time. (2 of 3 years finishing in June in Indiana is pretty unusual though).

 

I am just very curious about how economical PP really is for the farmer. Any serious thinkers have ideas?

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Veteran Advisor

Re: A question in hopes of bringing some sense of reason to the discussion

I was wondering the same thing. Good question to be asking this at this time. I am not a insurance guru infact I do not have any.  The thing is that with these numbers I can't believe that it is better to have no crop planted rather than something planted.

JohnQ  you need to get a life!

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Honored Advisor

Re: A question in hopes of bringing some sense of reason to the discussion

Well, beans could be planted as late as June 20 with hopes of 35 bu.   at $12  that`s around $400/a, probably better than PP would pay out.  Plus you wouldn`t ding your history with a goose egg year.

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Veteran Contributor

Re: A question in hopes of bringing some sense of reason to the discussion

Time-

We have been asking the same questions here in Ohio.  I think your premise is right that it is usually better to plant late then never... especially if you take the harvest option price.  Suppose I plant a field in June that may only yield 120.  If the harvest price (in October) is $7.00, the revenue is much higher than the prevented planting payment.

 

On the other hand, since we are on enterprise units, there is also a case for taking the PP option.  We have at least two fields that will not get planted until very late.  If most of our farm yields 150 and the two late fields yield 100, we may not have an insurance payout.   In this case it would have been better to take the prevented planting at 60% of our revenue guarantee and return our seed and 28%.

 

I don't think there is a right or wrong answer to these decisions... it's kinda like guessing on the markets.

 

By the way... what are you thinking on the markets?  I believe we are going higher from here.  Too many lost acres and weather issues ahead.

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Senior Contributor

Re: A question in hopes of bringing some sense of reason to the discussion

 Not sure about your area, but here In central Missouri we can get in the no-till fields much sooner after a rain. The convention till fields will still be a mess while across the fence in no-till we are planting.  Patrick

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Advisor

Re: A question in hopes of bringing some sense of reason to the discussion

  In our heavy ground here we can get on no till fields much sooner than on fall tilled fields.

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