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William Wymer (11) checks out the 2019 wheat crop at Kloster Farm in Lincoln County. The land is leased and farmed by John Wagner and his son, Jordan Wagner.
Photo by Diana Kloster

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Policy

Planting woes?

Tough field conditions leave farmers facing crop insurance decision

May 2019
By Trista Crossley

In some years, just getting seeds planted is a struggle for farmers. The fields may be too wet, or, conversely, too dry. The fields may be fine, but access to those fields may be blocked, thanks to flooded roads or washed-out bridges.

In any case, the longer a farmer has to wait to plant, the more likely it is that they’ll run afoul of the Risk Management Agency’s (RMA) final planting deadline, and when that happens, farmers will need to make a choice: forego planting altogether and receive a crop insurance payment (called prevented planting coverage), which is 60 percent of their total insurance guarantee, or plant late and take a deduction on their crop insurance production guarantee. For many Eastern Washington wheat farmers, neither of those choices makes them particularly happy.

At planting time (both in the spring and the fall), farmers have two dates they need to keep in mind: the final planting date and the late planting period. Both dates are set by the regional RMA office, and the dates vary according to crop and geographic location. In the event a farmer can’t plant by the final planting date, they can choose not to plant that crop and will be compensated for some costs they might have incurred while getting ready to plant. Farmers can still plant a crop after the final planting date. This falls into the late planting period, which typically extends 25 days after the final planting date. Every day after the final planting date costs a farmer 1 percent of their production guarantee. So if a farmer plants his crop seven days after the final plant date, their production guarantee is reduced by 7 percent.

In the spring of 2017 and again this year, the Washington Association of Wheat Growers (WAWG) asked RMA to either move the final planting deadline back a few days or waive the production guarantee deduction for a week or so to give growers a few more days to get their crops in the ground without penalty. Both times, the RMA regional office in Spokane denied WAWG’s request, saying such a move would constitute a change in the terms and conditions of policies that could result in a breach of contract between producers and their insurance companies.

Michelle Hennings, executive director of WAWG, said it is unfortunate that they were unable to come to a mutual agreement regarding the planting dates. With the current field conditions, an extension of the plant dates would have been a relief to many growers.

“Our farmers are hurting and could use every little bit of relief they can get,” she said. “While I understand RMA’s reasons for not moving the final planting date, I think there should be some flexibility in waiving the crop insurance penalty for a few days. It seems detrimental to penalize farmers who only need a few extra days to finish up their planting, and most farmers would rather put a crop in the ground than take a prevented planting payment.”

In Eastern Washington, final planting dates for spring wheat start as early as April 15 in parts of Adams, Benton, Grant and Walla Walla counties. The latest final plant date is May 15 in parts of Asotin, Douglas, Grant, Klickitat, Spokane, Whitman and Yakima counties.

At press time, spring wheat planting was behind schedule in multiple locations across Eastern Washington, and some farmers were facing the decision whether or not to take the prevented planting payment or plant late and take the crop insurance deduction (see sidebar on next page). According to the National Agricultural Statistics Service’s April 22 crop progress report for Washington state, spring wheat planting was only at 27 percent, compared with 39 percent this time last year and a five-year average of 59 percent.

Ben Thiel, director of RMA’s regional office in Spokane, said Eastern Washington growers aren’t the first or only ones who have had this request denied. Even in areas with more challenging conditions—think the late snow and flooding in the Midwest—RMA generally doesn’t budge when it comes to final planting dates.

“I empathize with farmers,” Thiel said. “Farming is a difficult business, and they are constantly challenged. Weather is a frustrating thing. That’s why there is crop insurance, because you can’t control the weather. The structure of federal crop insurance isn’t designed to be punitive, but rather to provide insured producers with options when impacted by insured perils. When a producer is unable to plant their insured crop by the final planting date, the policy has several options including a prevented planting payment, which compensates the producer for costs incurred in preparation for planting.”

Thiel gave another reason for not moving the final planting date—if that date were moved, it could conceivably force producers who wouldn’t normally plant past the final planting date to do exactly that.

Final planting dates are reviewed approximately every three years, and the Spokane office is responsible for setting them for Washington state. According to Rick Williams, senior risk management specialist at the Spokane office, RMA bases their dates on actual data from crop insurance policyholders.

“We look at many years of internal planting data. Another thing we do is we will contact industry representatives—that could be Extension service, it could be plant breeders, it could be seed company reps. We get their input and their opinion on what the dates should be,” Williams said. “What it boils down to is it’s an average. We consider early years, we consider late years, but it’s an average of all years.”

Thiel said that the final planting date is an average of when 90 percent of an insured crop is planted.

On the 1 percent production guarantee reduction, Thiel said beyond contractual reasons, waiving that reduction isn’t actuarially sound. He explained that according to Extension agents and agricultural experts, delays in planting can impact yields, so late-planted crops have a higher probability of not achieving a yield that forms the basis of the producer’s actual production history (APH).

“We shouldn’t insure late-planted acreage for a yield that, based on experts, probably won’t be attained,” Williams added.

Michael Pumphrey, the spring wheat breeder at Washington State University, said while he wasn’t aware of any trials in Eastern Washington designed to measure the yield impact of late-planted wheat, there have been studies done in the Midwest. A recent study done in Minnesota showed that on average, yields decreased 1 percent per day when planted late. Another study from North Dakota State University saw similar results. Pumphrey said it was likely late-planted wheat in Eastern Washington would suffer similar yield losses. In fact, he theorized the yield loss might be greater because Eastern Washington gets less rain in the summer than the Midwest, so the damage may be greater.

“I’ve been planting in this area for 10 years. We plant timely, but then when we decide to plant more studies a couple of weeks later, yields are significantly lower,” he said. “I’ve seen that kind of response (lower yields in late-planted wheat). I have no experiment to study it, but I know the trend is true.”

The losses in late-planted spring wheat generally occur due to a combination of higher temperatures during the initial growing season and less moisture availability. Even irrigated spring wheat may be susceptible. Pumphrey recalled a three-year study he did in Othello and Central Ferry to study heat stress. In the irrigated research plots that were intentionally planted one month late, they saw a yield reduction of about 55 percent compared to the same varieties planted on time.

Farmers who opt to do prevented planting need to contact their insurance agent within 72 hours of their final planting date. They also need to let their agent know what their intentions for the ground are, such as leaving it idle, putting in a cover crop or planting a different crop. Taking the prevented planting option doesn’t impact a grower’s actual production history (APH). Thiel said growers will still need to report that acreage, but because there is no yield associated with it, it doesn’t build a producer’s APH, but it also doesn’t hurt it.

A set of frequently asked questions about prevented planting is available on RMA’s website.