All across the Midwest, rain and poor weather has hampered farmers’ abilities to plant their crops, leaving many in a precarious spot.
The persistent rain that has soaked Montgomery County, and the Midwest as a whole, has prevented farmers from planting because the soil was drenched. With a break from the rain in the last few days, farmers put in some long days and odd hours trying to plant their crops before it’s too late.
When is too late? When it comes to crop insurance, farmers have a deadline for planting in order to be protected by crop insurance. In Indiana, along with much of the Midwest, the deadline for corn is today, June 5. The deadline for soybean is June 15. All of this has come together to leave farmers across the county, state, and region on the verge of crisis.
Nathan Scott and Jordan Burkett, Agricultural Loan Officers for Tri-County Bank and Hoosier Heartland State Bank, respectively, both mentioned the same glaring statistic: Indiana corn farmers have 31 percent of their crops planted as of June 2. The normal percent of crops planted by this time is closer to 94 percent. Whether the window of good weather that began on Saturday will give farmers enough time to get their crops planted remains to be seen.
“Being able to plan carefully, manage your books and your records carefully, is almost as important as going out and throwing your crops in the ground,” Scott said. “There are some farmers around who came in to this planting season very financially stressed and if this year doesn’t go well, they likely won’t be farming moving forward.”
One concept going around the idea mill right now is having farmers switch to soybean as opposed to corn, leaving them a larger window to plant and still be protected by insurance. According to Burkett, this idea still has some flaws. “Consistency is key. You want to get crops in the ground, obviously, but you switch crops and suddenly you get into chasing the market . . . You’ll see lower numbers of [corn] crops planted across the whole Midwest and hopefully that a favorable increase in prices as a result.”
Burkett agreed. “It’s still really too early to tell what the ultimate impact will be . . . There’s a lot of variability from our standpoint and we’re telling people it’s extremely important to maintain communication with your banks, your crop insurance agents and vendors and buyers.”
Scott maintained that, given what has happened so far, he still feels hopeful. “We’re going to try to be a reliable source of information and advice going forward, and I am cautiously optimistic.”
It’s important to understand the basic dynamics of the situation. When a farmer plants their crop in the spring, they do so with the intention of selling their harvest in the fall. They arrange to sell their harvest to buyers and enter into contracts with them in order to specify conditions like price and date of sale. If, however, a farmer fails to harvest enough crop (let’s say corn), then they have to buy out the price of that contract. In order to maintain the security of their business, farmers will purchase crop insurance. Crop insurance is there in case something were to happen to a crop and they were unable to meet the conditions of their contracts with the buyers.