The 2009 corn and soybean harvest season has been one of the slowest on record.

In some locations of the Midwest, less than 40 percent of the soybeans and less than 10 percent of the corn were harvested, as of early November. Normally, over 90 percent of the soybeans and over 60 percent of the corn would be harvested in most areas by early November.

The extreme lateness of the 2009 harvest brings into question as to whether or not some producers will be able to complete the corn and soybean harvest prior to the crop insurance harvest deadline of Dec. 10.

Dec. 10 is the “End of Insurance Period” deadline to get corn, soybeans and other crops harvested in order to maintain normal crop insurance coverage on the 2009 crop. Delayed harvest due to adverse weather conditions is an insurable loss with most crop insurance policies; however, high grain moisture content is not an insurable crop loss.

It is important that producers notify their crop insurance agent prior to Dec. 10, if corn or soybean harvest will be delayed beyond that date. Producers can request additional time beyond the Dec. 10 EOIP deadline to complete harvest, if extremely wet or snowy weather conditions occur.

The U.S. Department of Agriculture Risk Management Agency procedures allows crop insurance companies to authorize producers, on case-by-case basis, additional time to complete harvest beyond the established EOIP deadline, so that crop insurance claims can be based on harvested production. Following are the conditions that must be met for a crop insurance company to allow a producer additional time to harvest crops beyond the EOIP deadline.

• The producer gives timely notice of the potential crop loss to the crop insurance agent.
• The crop insurance company (agent) determines and documents that the delay in harvest was due to an insurable cause of crop loss.
• The producer demonstrates and documents to the crop insurance company (agent) that crop harvest completion was not possible by the EOIP deadline due to insurable causes.
• Producer must be able to verify that the delay in harvest was not due to uninsured causes of crop loss, or that harvest delays were not the result of the producer having insufficient equipment or manpower to complete the harvest by the established EOIP deadline.

When a crop insurance company (agent) authorizes additional time to complete harvest, the calendar deadline date of the EOIP (Dec. 10 for corn and soybeans) is not extended; however, the producer is granted additional time to attempt to complete the harvest before any crop losses are settled on the basis of harvested crop loss.

Any additional crop loss from an insurable cause during the period of the harvest extension would be covered by most crop insurance policies. Any “avoidable” losses of crop production will be counted as bushels produced, and will reduce potential crop insurance indemnity payments.

It is important for producers to document field conditions, weather conditions, harvest progress and any other pertinent conditions relative to potential crop losses, both prior to the Dec. 10 EOIP deadline, and after that date if a harvest extension is granted by the crop insurance company (agent).

Producers are expected to attempt to harvest their crop during the extension period, when weather conditions permit. If the crop insurance company (agent) deems that the producer is not making an attempt to harvest the crop during the extension time, they can appraise the remaining crop at that time, finalize calculations for crop losses, and determine any potential crop insurance indemnity payments.

Crop damage occurring after the crop insurance company has closed the crop loss claim is not an insurable crop loss. There is no final deadline for a crop insurance company to halt the harvest extension and to do the final appraisal for crop loss.

If producers feel that weather conditions will delay the 2009 corn and soybean harvest beyond the Dec. 10 EOIP deadline, they should contact their crop insurance agent to report a potential crop loss before the deadline, and should request additional harvest time beyond the Dec. 10 deadline to protect the crop insurance coverage on the 2009 crop.

Insurance coverage for aflatoxin

Some corn kernel and ear molds are occurring in much of the Upper Midwest. Some of these common molds, such as trichoderma (green mold) and cladosporium (green or black blotched kernels) are usually not harmful, and do not normally cause the mycotoxins that result in aflatoxin problems in corn.

However, given the type of summer and fall weather conditions that we have had, it is likely that other corn ear and kernel molds may exist in some areas that could result in harmful mycotoxins leading to aflatoxin problems in the harvested corn.

Aflatoxin mold growth is most prevalent in years, such as 2009, when a period of drought is followed by a period of high humidity. Aflatoxin can also show up after the crop has been placed in storage. The presence of aflatoxin in corn could lead to rejections or price reductions by grain elevators or grain processors, and potential problems with feeding the corn to livestock.

If producers suspect that harmful ear and kernel molds may be present in corn that is still in the field, which could result in aflatoxin problems, they should contact their crop insurance agent before the corn is placed in storage to make sure that they have crop insurance coverage.

Crop insurance coverage generally ends once the crop has been harvested, including the harvest extension that was detailed earlier. A crop insurance adjuster will take samples of the corn suspected to have aflatoxin, and will then have those samples tested for aflatoxin at a USDA-approved testing laboratory.

There are four possible aflatoxin test results: no discounts or damage; mild discounts; severe discounts; or ordered destruction.

The crop insurance adjuster will then determine an “adjustment factor” to use for adjusting crop losses and determining potential crop insurance indemnity payments.

Producers should contact their crop insurance agent to find out more details of crop insurance coverage when corn ear and kernel molds are present, which could potentially result in the development of aflatoxin in the harvested corn. Producers with questions on the various corn ear and kernel molds should contact their local crop consultant or agronomist for further details. Further information is also available on the University of Minnesota Fall Late Harvest website at www.extension.umn.edu/lateharvest or on the Iowa State University Crop News website at www.extension.iastate.edu/CropNews.

Calculating 2009 crop insurance payments

Some farmers in Minnesota and surrounding states will be facing reduced yields on some farm units in 2009, due to late planting, drought, severe storms and late harvest.

Many growers purchased upgraded levels of Crop Revenue Coverage or Revenue Assurance with a harvest-pricing option crop insurance for the 2009 growing season. Following is an analysis of potential 2009 crop loss scenarios that could result in likely crop insurance indemnity payments with CRC or RA-HP policies.

CRC and RA-HP insurance policies

An initial “price guarantee” is established for each crop prior to the crop insurance enrollment deadline on March 15 each year. The final price guarantee is determined at harvest time in the fall. The price guarantees are based off of Chicago Board of Trade grain futures prices.

Following is how CRC and RA-HP price guarantees are calculated.

Corn

Base price is the average settlement price for December CBOT corn futures in February.

Harvest price for CRC is the average settlement price for December CBOT corn futures in October during the year of harvest. (Average price in November is used for RA-HP.)

Soybeans

Base price is the average settlement price for November soybean futures in February.

Harvest price for CRC and RA-HP policies is the average settlement price for November CBOT corn futures in October during the year of harvest.

•  2009 RA-HP and CRC base prices were:

Corn: $4.04 per bushel

Soybeans: $8.80/bu.

• 2009 RA-HP and CRC harvest price estimates as of Nov. 2 were:

Corn CRC price (Final): $3.72/bu.

(The corn RA-HP harvest price will be finalized after Nov. 30)

Soybean CRC and RA-HP price (Final): $9.66/bu.

• The higher of the base price or the harvest price is used to calculate revenue guarantee per acre used to determine crop indemnity payments with CRC and RA-HP policies. The harvest price is used to determine the value of the harvested crop.

• CRC or RA-HP crop loss example table

Refer to adjoining table for crop loss examples for corn with a 75 percent coverage policy and soybeans with a 80 percent coverage CRC or RA-HP crop insurance policy. The table also contains space for producers to put in their own APH yields, insurance coverage levels, projected yield and harvest prices, in order to make estimates for potential crop insurance indemnity payments.

Bottom line on calculating potential crop insurance payments

Producers who are facing harvest delays beyond the crop insurance established harvest deadline of Dec. 10, or have potential aflatoxin problems in corn, should contact their crop insurance agent to report a potential crop loss, and to possibly receive a harvest extension.

A reputable crop insurance agent is the best source of information to make estimates for potential 2009 crop insurance indemnity payments. It is important for producers who are facing crop losses in 2009 to understand their crop insurance coverage and the calculations used to determine crop insurance indemnity payments, and to share with ag lenders, landlords and others.

The University of Illinois Farm Management website has some good crop insurance information and an online “What-If” Crop Insurance Payment Calculator. The website is located at www.farmdoc.uiuc.edu.

Kent Thiesse is a government farm programs analyst and a vice president at MinnStar Bank in Lake Crystal. He may be reached at (507) 726-2137 or kent.thiesse@minnstarbank.com.