COLUMN-Pressure mounts on U.S. farmers to plant amid more rain, aid package -Braun

Credit: REUTERS/Humeyra Pamuk

By Karen Braun

FORT COLLINS, Colo., May 23 (Reuters) - The U.S. Department of Agriculture on Thursday laid out its much-anticipated aid package for U.S. farmers to compensate them for losses due to recent trade conflicts, particularly with China. This led market participants to believe that planted acres may not fall as much as expected despite the extreme weather that has afflicted farmers this spring.

Excessive rain has caused U.S. planting to fall seriously behind schedule. Farmers still had 116 million acres of combined corn and soybeans left to plant as of May 19, far more than they ever had on the date. The previous high was 91 million acres in 1995. (

For some farmers, the trade payments might be enticing enough to push hard on planting, even beyond the deadline set by crop insurance. But for others, the yield risks and uncertain returns may not support aggressive planting, especially if the wet weather persists.

The new $16 billion trade package is to include $14.5 billion in direct payments to farmers, more than last year’s full program of $12 billion. It will also have a single payment rate per county calculated by the estimated damages in that area due to the trade war. That differs from last year’s payments which were done by commodity and heavily favored soybeans.

USDA has emphasized several times that it does not want the trade aid to skew planting decisions for 2019, since the season is still very much in progress. The payments will depend on the total acres planted in each county and will not favor a specific crop.

That plan certainly promotes the planting of acres, if possible, regardless of whether it is corn or soybeans. USDA said farmers would not receive payments on acres that were not planted, and that presumably includes prevented planting.

This has led many analysts to rethink their assumptions for prevented acres this year, which seemed primed to set records. Farmers can receive prevented planting payments from the government when an insured crop was unable to be planted within the specified time frame outlined in the insurance policy.

USDA has not yet unveiled the trade aid payment rate, so farmers who are in a bind with their planting situation have some tough decisions ahead. Planting corn too late can often introduce large risks to yield and thus revenue, so prevented planting might be the preferred route in many of these cases depending on how soon the fields can be fit for work.

But some farmers may be more willing to gamble depending on their location and how much yield risk may be at play. Other factors such as input costs, individual production history, field condition, and corn prices will also be of key consideration, but the hope for large trade payments may inevitably figure in.

New-crop corn prices CZ9 on the Chicago Board of Trade sank 4.75 cents per bushel on Thursday to $4.08 on the expectation for more acres. However, this trend would not necessarily support farmers aggressively planting corn, especially if it came at a higher risk.

The largest amount of prevented corn acres was 3.6 million in 2013 and the most prevented bean acres were 2.2 million in 2015. (


In Illinois, the top soybean grower and No. 2 in corn, progress was critically behind as of Sunday with 24% of the corn crop sown versus a five-year average of 89%. As of Sunday, the state still had more than 18 million total acres of corn and beans to plant, and wet weather continued to ground farmers there this week. Last year Illinois produced 16% and 15% of the nation’s corn and soybeans, respectively.

For Illinois growers to plant all their corn by the crop insurance cut-off date of June 5, they needed to plant roughly 500,000 acres per day from last Sunday through that date. On average during their peak corn planting time in any given year, Illinois farmers plant around 400,000 acres per day.

Iowa, No. 1 in corn and No. 2 in soybeans, had just under 11 million acres left to plant as of May 19, with soybeans accounting for nearly two-thirds of those. Iowa farmers had planted 70% of their corn crop as of Sunday versus an average of 89%. Iowa’s final planting date for full crop insurance is May 31.

The immediate forecast is not looking favorable. U.S. government forecasts suggest that most of the Western Corn Belt is likely to receive 2 inches (51 mm) or more of rain through next Thursday morning. Iowa is in the bullseye with more than 3 inches (76 mm) expected in that time frame.

Current forecasts suggest that much of the Midwest can expect a drier opening week of June. That is great news for stressed-out farmers still needing to plant, but the dry period might not be fully usable if soils are still too wet and unfit for field work.

Graphic- U.S. corn and soy acres left to plant on May 19

Graphic- United States prevent plant acres

(Editing by Matthew Lewis)

(( +1 (312) 408-8059 Reuters Messaging:; Twitter: @kannbwx))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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