USDA Allows Expiring CRP Land Early Out
Senators Pitch Plan to Keep Farmers Planting After Final Insurance Dates
OMAHA (DTN) -- Members of Congress from northern states are calling on Agriculture Secretary Tom Vilsack to find a way to extend crop insurance coverage protection beyond the final planting dates to keep planters rolling and boost potential crop production in the United States this fall.
With planting progress behind schedule, high food inflation and heightened concerns about a possible crisis looming with global grain stocks, the four senators representing Minnesota and North Dakota, along with three Minnesota representatives and North Dakota's House member, wrote a letter to Vilsack on Wednesday asking USDA to provide payments to farmers that would offset declining crop-insurance insurance guarantees after the final insurance planting dates.
The senators noted crop insurance coverage declines 1% a day after the final planting date. "To mitigate the increased risk to farmers and incentivize planting, payment should be made to producers with qualifying losses equivalent to any reduction in their crop insurance guarantee," the lawmakers wrote.
In a Senate Agriculture Committee hearing with Vilsack on Thursday, Sen. John Hoeven, R-N.D., who spearheaded the letter with Sen. Amy Klobuchar, D-Minn., told Vilsack about the "excessive moisture" that has struck the Northern Plains and parts of the Midwest, delaying planting in most major corn- and soybean-producing states.
"Our farmers are butting up against the final planting dates," Hoeven said, leading to risks that more farmers will end up in the prevented-planting dates.
"Well, obviously at a time of high food inflation, we want as many of them as possible planting a crop," Hoeven said, pitching the proposal to use the Commodity Credit Corp. (CCC) to offset against declining crop-insurance protection. Such a move would help ensure farmers "will actually go ahead and get those crops in the ground even though they're going past that crop insurance end date.
The senators' plan pitches the use of CCC funds because crop-insurance policies are private contracts between producers and insurance companies. USDA officials have said in the past they are not able to change the terms of those contracts.
"That's how it would work out because it would actually save the USDA money, save the government money, from the standpoint that you're not paying out more prevent plant (claims)," Hoeven said. He added that USDA would need to move quickly because farmers will soon face making these decisions.
Vilsack said he hadn't had a chance to review the senators' letter but would talk with staff about it. He reiterated that the challenge is "making sure we don't compromise the relationship between the users and the producers, or the overall crop insurance program," but he added, "you know, we've exhibited in the past we're more than happy to provide help and assistance where it is needed."
PREVENTED PLANTING DETAILS
Most of North and South Dakota and northern Minnesota, along with Nebraska and Kansas, hit their final planting date for corn used for grain on May 25. Iowa, southern Minnesota and Wisconsin and some counties in the eastern Dakotas have a May 31 final planting date.
Final planting dates for spring wheat in North Dakota are May 31 or June 5, depending on the county, the same for most of Minnesota as well, though lower Minnesota's final planting dates are already expired.
Once the final planting date is hit, farmers can file a claim if they have a cause such as wet weather and soggy fields. Planting after the final planting date drops the coverage 1% each day for the next 25 days. That decline in protection reflects insurers' data on lower yield and production on those acres.
Once the late period ends, coverage on remaining acres would be 55% of the original guarantee for corn and 60% for soybeans. Those are the same coverage levels for farmers who halt planting after the final planting date.
For more see, Iowa State University Extension's primer on crop insurance dates at https://www.extension.iastate.edu/….
Soybean final planting dates for most of those states carry into June 10, though Iowa, southern Wisconsin and Northern Illinois have a June 15 final date. Other states can carry into June 20.
Farmers who hit the final planting dates for corn or wheat can switch to soybeans on those acres and receive the full guarantee -- if they can get seed and make the switch in that 10- to 15-day window.
In the 2019 prevented planting year with 20 million acres of unplanted crops, the Trump administration boosted the prevented-planting payment to farmers 10% and offered a $15 per-acre payment to plant cover crops that could later be used to hay or graze. That aid was at least partially provided because farmers who planted acres were receiving tariff aid payments.
As of May 22, North Dakota corn was only 20% planted compared to the 66% five-year average. South Dakota was at 62%, compared to 71% on average. Minnesota was at 60% compared to an 86% five-year average. Soybean planting is even farther behind in those states as well.
For more on prevented planting, see the University of Illinois farmdocdaily decision analysis at https://farmdocdaily.illinois.edu/….
CONDITIONS THIS WEEK
DTN Ag Meteorologist John Baranick noted Thursday that states such as North Dakota have had "a pretty dry week that has seen some good drying conditions that have allowed some to plant in North Dakota and the surrounding wet areas." However, Baranick noted, "the window will close with several waves of showers moving through the region going into next week."
Yet, a lot of other states are also behind schedule. Ohio farmer Chris Cooper noted to DTN on Twitter that the crop-insurance proposal "Would help in my area. Another inch in 30 min(utes) last night. Gonna be June before we get back in now."
USDA ON CRP, EQIP AND CSP
Rather than waiting until the end of their contracts on Oct. 1, landowners with acreage coming out of the Conservation Reserve Program will be able to open the ground up for production after primary nesting seasons end in their states.
USDA announced the plan and Vilsack highlighted it when senators asked about CRP flexibility, global supply chain issues and plans to help farmers increase production.
USDA said the move is a "one-time, voluntary termination" that will not require landowners to repay rental payments. The move was rolled out as a way "to help mitigate the global food supply chain challenges caused by the Russian invasion of Ukraine and other factors."
USDA also noted the department was providing additional flexibilities for producers to use the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) that would allow them to modify their plans to plant cover crops if they want to shift to a "conservation crop rotation," meaning they could follow up a high-residue crop such as corn or wheat with a rotation using vegetables, soybeans, some other field crop or a forage crop. Essentially, USDA is encouraging farmers in EQIP and CSP to look at double-cropping options.
The flexibility to shift from cover crops to double cropping on CSP ground may be one of USDA's biggest moves given CSP has more than 70 million acres enrolled.
The CRP plan should affect about 1.8 million acres. USDA originally had about 3.4 million acres set to end their contracts this year, but the latest CRP enrollment re-enlisted about 1.6 million that were set to expire.
The state that could benefit the earliest is Texas, which was initially set to see 707,196 acres expire -- before the latest CRP signup period.
Vilsack also told senators other farmers also have terminated their CRP contracts early, taking "about a million acres" out of the program as well. Texas cattle producers, already under drought conditions, would be able to graze those expiring acres after the nesting season ends June 1. Depending on the state, though, nesting seasons might not end until Aug. 1.
For a lot of acres, it would also provide the chance to work the ground and plant crops as early as fall, an indication USDA wants to see more winter wheat. Vilsack indicated that in a comment to Sen. John Thune, R-S.D.
"We're basically suggesting they can voluntarily terminate without penalty for those acres coming out of the program so they would be in a position to do work now on those acres coming out of the program," he said.
The Farm Service Agency also "is encouraging producers to consider organic production." The press release highlighted farmers should look into the Natural Resources Conservation Service technical and financial assistance if they want to consider converting the CRP ground to organic production.
The National Grain and Feed Association thanked USDA for providing some flexibility in the conservation programs. NGFA, as well as Sen. John Boozman, R-Ark., have called for USDA to provide more flexibility to plant on more CRP ground. NGFA has specifically targeted "prime farm ground idled in the CRP" based on the 2017 National Resources Inventory ranking of that ground, "which represents one out of four acres in the program."
Regarding Thursday's moves, Mike Seyfert, president and CEO of NGFA, said. "These actions will allow producers to respond to market signals by putting farmland back into production while providing proven environmental best practices on working lands and continuing to protect our most environmentally sensitive agricultural lands. NGFA encourages USDA to consider next year's expiring CRP contracts as well and to make any announcements in a timely manner that would allow for the planting of 2023 spring crops."
See USDA primary nesting dates at https://www.fsa.usda.gov/…
Chris Clayton can be reached at Chris.Clayton@dtn.com
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