Posts

Quality Issues Raise Crop Insurance Questions

Producers in some areas have experienced a perfect storm in weather in 2018. After a delayed growing season, crops caught up and matured ahead of normal, only to have rain delay harvest. That opened the door to quality problems ranging from soybean pod shattering to mycotoxin contamination.

In fact, USDA’s Crop Progress report this week shows harvest in the 18 states behind average for all crops, and Kansas is among those with crops still in the field:

Corn remaining (%)

 

Corn
5-year average remaining
Soybeans remaining (%) Soybeans
5-year average remaining
Sorghum remaining (%) Sorghum 5-year average remaining Sunflower remaining (%) Sunflower 5-year average remaining
Kansas 11 5 26 10 38 20 37 8
Reporting states  

16

 

13

 

12

 

7

 

27

 

16

 

39

 

25

 

More than a quarter of the beans in Kansas are still in the field, according to USDA’s count. “We were hearing reports of quality problems,” said Ruth Compton, crop insurance officer in Hiawatha. “I don’t believe it’s been a huge problem but with a lot of soybeans still in the field, there is a continued concern.”

Different situations

The crop insurance claim process differs depending on the situation. For instance, if a field is flooded and has standing water, you are not allowed to harvest for food use. You have the option to sell to a salvage buyer if you can find one who will take your production or you can destroy the crop and take a zero on your Actual Production History (APH). If you have a quality issue that your elevator discounts less than 8 percent, it doesn’t support a claim.

And, although the price drop from the spring guarantee of $10.16 to the harvest price of $8.61 appears large, in almost all cases, it would not produce a claim on its own, depending on the yield. The table below illustrates the yield needed to trigger a claim given various revenue guarantees. The October average falls between the $8.65 and $8.66 rows in the table.

revenue guarantee table

revenue guarantee table

In all cases, you need to weigh the impact on APH against the amount a claim might be worth. Your Frontier Farm Credit insurance offer can help identify the avenues you can use to ensure the impact on your APH is minimized.

A bigger question this year may be the effect on your Market Facilitation Program (MFP) payment. That is paid strictly on the bushels produced. The first of two possible payments is $1.65 on half your production. So the question is: Is it better to combine the crop to collect the 82 cents, plus a likely additional payment, or save the cost of combining and file a claim?

Your Frontier Farm Credit insurance team can help you make that determination – and guide you through the claims process when quality is at issue.

For those who want to review before proceeding, click to view the USDA/Risk Management Agency fact sheet on Soybean Kernel Damage Quality Adjustment Procedure.

Winter wheat

Winter wheat planting also is a bit behind average, with 90 percent completed in Kansas, 8 points behind usual. 77 percent has emerged, well behind the 89 percent average. As of Nov. 11, USDA rates 44 percent of the crop good/excellent, compared with 54 percent in the 18 reporting states. Fourteen percent is poor/very poor in Kansas while 12 percent falls in those categories in the 18 states, headed up by Oklahoma, Oregon and Texas.

Image: Purple seed staining of soybean in south central Nebraska. Photo courtesy of Jennifer Rees, UNL CropWatch

Ripe corn with snow

Poor Weather Stalls Harvest

Even though crops are largely mature, harvest has fallen behind average due to farmers getting just what they didn’t need right now — moisture. In the week ended October 12, Iowa and South Dakota had less than a day of suitable fieldwork, Kansas had one full day and Nebraska 1.3 days.

In the 18 reporting states, 39 percent of corn has been harvested, ahead of the 35 percent average. Soybeans, however, are 15 points behind the usual 53 percent for this week. The states in our area are slightly behind on corn and significantly behind on soybeans:

CORN

SOYBEANS

Oct. 14, 2018

5-year average

Oct. 4, 2018

5-year average

Iowa

17

24

19

51

Kansas

63

64

16

33

Nebraska

25

25

39

54

South Dakota

17

21

29

65

18 States

39

35

38

53

 

USDA’s condition ratings are unchanged for corn, at 12 percent in the bottom two categories and 68 percent in the top two. Soybean ratings slipped one point on the top and gained one point on the bottom.

Sorghum is six points behind average, at 42 percent harvested. Nebraska stands at 32 percent, five ahead of average. But Kansas and South Dakota – at 19 and 21 percent respectively – are both behind nine points.

Winter wheat, at 65 percent complete in the 18 reporting states, also has slipped two points behind average. Kansas and Nebraska are each three points behind, at 62 percent and 89 percent respectively; South Dakota is eight points behind at 82 percent complete.

Better weather in the week ahead will help, at least on fields that aren’t too wet for machinery.

 

Ripe corn field with standing water

Season Ends Much as It Started: Wet

Soggy conditions have slowed field work and narrowed the gap between this year’s progress and the five-year average. Days suitable for field work in the week ended October 7 ranged from 1.6 in Iowa to 1.9 in South Dakota, 3.2 in Nebraska and 4.6 in Kansas.

Corn harvest progressed to 34 percent, compared with 26 percent on average in the 18 states and soybeans, at 32 percent, trailed the average by four points.

Oct. 7, 2018 CORN SOYBEANS
Percent harvested Points gained in week Average Percent harvested Points gained in week Average
Iowa 15 4 13 18 3 31
Kansas 59 12 52 14 7 19
Nebraska 23 6 6 36 9 33
South Dakota 16 5 5 28 7 41

Corn and soybean condition in the 18 states was unchanged other than a loss of one percentage point on the high end for corn. Corn was rated 12 percent poor/very poor and 68 percent good/excellent; soybeans, 10 percent and 68 percent.

Sorghum harvest is complete in Kansas (equal to average), 23 percent complete in Nebraska (16 percent average), and two points behind average in South Dakota at 16 percent.

Soggy soils

Just as farmers were frustrated by wet fields at the start of planting, they are experiencing similar difficulties at harvest. The map below shows soil moisture in large portions of the Corn Belt and our service area are 40 to 160 millimeters above normal.

calculated soil moisture anomoly graph

crop protection network imagePlant diseases related to moisture, including northern corn leaf blight, gray leaf spot and tar spot, as well as Fusarium and Gibberella ear rots, are a concern in high-moisture areas. Lodged corn is at particular risk for developing mycotoxins.

Producers are encouraged to inspect their fields before harvest for signs of mold or mycotoxins. It’s important to work with your crop insurance agent to arrange an inspection of the field.

For those cutting silage, concerns caused by early plant maturity combined with inability to get into soggy fields go beyond mold and mycotoxins, which can develop and grow in storage. These include:

  • Higher dry matter silage: If dry matter is more than 40 percent, the digestibility of fiber and starch are reduced;
  • Less dense packing and greater oxygen content

South Dakota State University Extension offers the tips to improve results.

Looking ahead, an El Nino is likely in the weeks and months ahead. That points to a warmer than average winter in our service area. The Southwest and Southern Plains could see above normal precipitation. So much so in fact that during a webinar for our customers, Mike Murphy of Cattlefax predicted soil moisture in Texas and Oklahoma “could be fine by next spring.”

Corn now a week ahead; soybeans slightly less advanced

Corn harvest jumped 10 points to 26 percent in the final week of September. This is well ahead of the 17 percent average for the 18 reporting states. Eighty six percent of the crop is mature, 15 points ahead of average, so combines will continue roll, weather permitting.

Harvest in our territory also continues to run ahead of average, despite a lack of suitable field days in many areas.

State Percent Harvested 9/23 9/30 Average
Iowa 5 11 6
Kansas 30 47 39
Nebraska 43 65 42
South Dakota 5 11 7

 

Soybean harvest also advanced, reaching 23 percent complete in the 18 states. That is up 9 percentage points from the prior week and three ahead of average.

With 83 percent of beans dropping leaves (average, 75 percent), condition is rated unchanged at 68 percent good/excellent and 10 percent poor/very poor. Kansas and South Dakota have 58 percent in the top categories, Iowa 74 percent and Nebraska 85 percent.

Grain sorghum is running slightly behind average, with 34 percent harvested in the 11 reporting states (average is 36 percent); 62 percent mature (63 percent average) and 97 percent (2 points ahead of the 95 percent average). Its condition worsened one point at each end, with 54 percent good/average and 17 percent poor/very poor.

Winter wheat planting also jumped in the past week, from 28 percent complete to 43 percent, which is three points ahead of average. Progress in our states varies somewhat, with Nebraska slightly behind average:

State 9/23 Average
Kansas 41 32
Nebraska 72 74
South Dakota 67 65

 

Pasture and range conditions continue to improve, with 42 percent now rated good/excellent and 23 percent poor/very poor. Kansas is rated 53 percent good/excellent and 19 percent in the bottom categories.

Soil moisture in South Dakota continues to be short in some parts of the state:

  Very short Short Adequate Surplus
Topsoil moisture 8 20 65 7
Subsoil moisture 14 29 53 4

 

These two maps tell the story.

palmer drought index - Sept 2018

 

drought map 9-25-2018

Ripening corn

Combines – and planters – rolling

A string of clear weather days jump-started harvest. In the 18 reporting states, 16 percent of corn and 14 percent of soybeans are combined, compared to 11 percent and 8 percent on average.

All of the states in our service area are ahead of average in development and harvest:

Corn dented Corn mature Corn harvested
Sept 24 Average Sept 24 Average Sept 24 Average
Iowa 97 94 74 51 5 3
Kansas 98 96 80 69 30 27
Nebraska 98 96 69 53 9 6
South Dakota 98 92 67 43 5 3
18 States 97 93 72 53 16 11

 

Corn condition continues favorable, with the 18-state rating improving one point in the top categories to 69 percent and the bottom two unchanged at 12 percent. The rain was too late to boost the Kansas crop into better-than-half good/excellent; it stands are 47 percent, while 26 percent falls in the bottom categories. South Dakota is slightly below average, at 63 percent good/excellent and 18 percent poor/very poor. Both Iowa and Nebraska are above average.

Soybean progress and harvest also are ahead of average, by a wide margin in some states.

Dropping leaves Harvested Condition
Sept 24 Average Sept 24 Average Good/excellent Poor/very poor
Iowa 72 49 8 3 22 7
Kansas 49 43 2 2 60 10
Nebraska 84 69 13 6 83 6
South Dakota 83 74 12 6 61 15
18 States 71 57 14 8 68 10

 

Grain sorghum’s progress is closer to average, and more of a mixed bag, with several measures behind average.

Coloring Mature Harvested
Sept 24 Average Sept 24 Average Sept 24 Average
Kansas 93 90 32 33 6 6
Nebraska 95 97 48 41 6 4
South Dakota 85 90 24 35 1 4
18 States 94 90 50 53 30 32

 

Condition is better than average in our service area. Nebraska is rated 84 percent good/excellent and 2 percent poor/very poor compared to the 11-state average of 55 percent and 2 percent; Kansas is 71 percent and 7 percent; and South Dakota, 67 percent and 5 percent.

Winter wheat planting

Even as corn and soybeans are coming out of the field, 28 percent of the winter wheat crop is planted, two points ahead of average. Kansas farmers have 21 percent in, compared with 16 on average; Nebraska is three points behind average at 53 percent; and South Dakota is six points ahead of average at 53 percent.

Rains have helped Kansas pasture and range condition, which has reached 50 percent good/excellent. That compares with only 29 percent at the start of August. However, 17 percent remains in poor or very poor condition.