Putting a price tag on late plantingCorn farmers in North Dakota, South Dakota and Minnesota could lose as much as $2.6 billion because of planting delays this spring, says a company that provides global crop insurance and risk management.
By: Jonathan Knutson, Agweek
Corn farmers in North Dakota, South Dakota and Minnesota could lose as much as $2.6 billion because of planting delays this spring, says a company that provides global crop insurance and risk management.
“We’re behind the 8-ball a bit. It’s going to take abnormally good weather to catch up,” says Jeff Hamlin, director of agronomic research for WeatherBill.
As he notes, the strong possibility of reduced yields “isn’t driven by putting corn in the ground late. It’s what happens later in the growing season” — weather events such as drought and frost — that are likely to push down yields.
Based on research, data
San Francisco-based WeatherBill’s yield and revenue loss estimates are based on local university research data and historical data from each of the nation’s 12 leading corn-producing states. A rate of $7 per bushel is used in the calculations.
WeatherBill offers best- and worst-case scenarios, based on the fastest- and slowest-planting seasons in the past 20 years.
Both scenarios assume all the acres forecast to be planted to corn in the U.S. Department of Agriculture’s March 30 planting intentions report do indeed go to corn. The actual losses could exceed even the worst-case scenario if a large number of acres pegged by USDA for corn go unseeded or are planted to another crop.
Here’s a look at the WeatherBill estimates for each state.
n North Dakota — Best case, modeled on the 2000 crop year, 58.4 million bushels and $408.9 million in revenue lost. Worst case, modeled on the 2009 crop year, 79.2 million bushels and $554.8 million in revenue lost.
n South Dakota — Best case, modeled on the 2000 crop year, 169.9 million bushels and $1.2 billion in revenue lost. Worst case, modeled on the 2010 crop year, 209 million bushels and $1.46 billion in revenue lost.
n Minnesota — Best case, modeled on the 1998 crop year, 66.5 million bushels and $465 million in revenue lost. Worst case, modeled on the 2006 crop year, 86 million bushels $606.6 million in revenue lost.
WeatherBill also calculates the percentage of each state’s “bushel target” that’s at risk in the worst-case scenario. That target is calculated as the number of corn acres reported in USDA’s planting intentions report multiplied by 110 percent of the highest statewide corn yield seen in the past 10 years.
Using that measure, 22 percent of the North Dakota and 20 percent of the South Dakota bushel targets are at risk, WeatherBill says.
Those rates trail only Ohio’s 34 percent at-risk bushel target among the nation’s leading corn producers.
Minnesota’s at-risk bushel target is calculated at 6 percent.
WeatherBill provides Total Weather Insurance policies through an automated program that protects growers from financial loss as a result of weather-related yield losses. The policies provide coverage over and above federal crop insurance.
Losses from planting delays encountered so far typically wouldn’t be large enough to trigger federal crop insurance coverage, but would be covered by WeatherBill, Hamlin says.