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flooded farmland
QUALIFY FOR PAYMENT? Various sources report pressure on USDA to include prevented planting acres in trade mitigation payments. The latest official word makes that sound unlikely but hints at a possible “minimal” payment.

Mitigation payments for prevent plant acres still unclear

USDA’s latest announcement doesn’t provide a definite answer if you’re trying to make decisions.

One key decision remaining for those in the areas hardest hit by rain where corn wasn’t planted on time is whether to take the full prevented planting corn payment, or to plant soybeans after the late planting date for corn. Purdue University Extension agricultural economists Jim Mintert and Michael Langemeier have noted that which is more profitable depends on several factors, including where you live. Soybean yield expectations for late-planted beans vary depending upon location.

Complicating the decision is whether you can participate in USDA’s Market Facilitation Program if you don’t plant a crop. Mintert and Langemeier, who are director and associate director, respectively, for the Purdue Center for Commercial Agriculture, confirmed verbally after USDA’s initial trade payment announcement in late May that prevented planting acres would not be eligible for these trade payments. If that’s true, it increases incentive for planting soybeans late and taking the partial prevented planting payment instead, again depending on where you live.  

However, when asked about it by various reporters in recent days, including Chris Torres with American Agriculturist, a Farm Progress publication, USDA Ag Secretary Sonny Perdue was hesitant to give details and didn’t provide a clear answer.

Finally, some news

Just today, USDA issued a release with statements from Perdue about the disaster program, which is a separate issue, plus trade mitigation issues. He clarified why prevented planting acres don’t qualify for trade mitigation payments, but left the door open as to whether there would be other compensation for farmers with those acres.

“I have been out in the country this spring and visited with many farmers,” Perdue says. “I know they’re discouraged, and many are facing difficult decisions about what to do this planting season or if they’ve got the capital to stay in business, but they shouldn’t wait for an announcement to make their decisions. I urge farmers to plant for the market and plant what works best on their farm, regardless of what type of assistance programs USDA is able to provide.

“In the coming weeks, USDA will provide information on the Market Facilitation Program payment rates and details of the various components of the disaster relief legislation. USDA is not legally authorized to make Market Facilitation Program payments to producers for acreage that is not planted. However, we are exploring legal flexibilities to provide a minimal per acre market facilitation payment to folks who filed prevent plant and chose to plant an MFP-eligible cover crop, with the potential to be harvested and for subsequent use of those cover crops for forage.”

Key phrases

Perdue indicates USDA can’t legally make trade mitigation payments on prevented planting acres. That’s news. However, he opens the door to a possible “minimal market facilitation payment” if you file prevent plant and plant a cover crop eligible for the MFP.

That leaves the issue murky at best if you’re trying to make a decision right now. Here’s what Mintert says after reading the statement: “It’s not clear. The release, several times, references a ‘minimal MFP’ payment for producers who plant an approved cover crop on prevented planting acres. It’s hard to guess what USDA’s definition of ‘minimal’ is.

“At first glance, I’d guess that the net revenue from the cover crop, minus the cost of putting the cover crop in, minus the cost of harvesting the cover crop, would be very minimal. I think the key for producers to remember is they need to think about the net return, after accounting for all additional costs incurred in planting and harvesting the cover crop and the revenues [or feed value] of the harvested cover crop — not just the minimal MFP payment that they might receive.”

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