Billions At Risk In Dakotas From Planting Delays

Billions At Risk In Dakotas From Planting Delays

Insurance company says as much as 341 million bushels of corn may be lost.

North Dakota and South Dakota corn growers stand to lose $2.3 billion as a result of planting delays, according to WeatherBill, a weather insurance and risk management firm headquartered in San Francisco, Calif.

The company calculates that between 206 million and 341 million bushels of corn are at risk in the Dakotas as a result of planting delays. The yield loss equates to between $1.4 billion and $2.3 billion.

Much of the Cornbelt is in the same situation. WeatherBill says between 834 million and 1.6 billion bushels of corn are at risk nationally – a loss of yield that could equate to between $5.8 billion and $11.2 billion, depending on how quickly planting progresses as fields dry.

The company calculates that between 206 million and 341 million bushels of corn are at risk in the Dakotas as a result of planting delays.

Based on a comparison of the best and worst planting seasons, states experiencing delayed planting as a result of the excessive wet spring conditions are already on track to lose more than $5.8 billion in crop revenue.

States that have been the hardest hit represent more than 60% of the nation's corn-growing acreage. They include Illinois, Indiana, Iowa, Ohio and Wisconsin.

Illinois experienced the rainiest April since 1895 and the Ohio Valley region had its wettest April on record. Wisconsin is having the third wettest spring the state has experienced in the last 30 years.

Below is a breakdown of WeatherBill's report indicating the best and worst case scenarios for revenue tied to corn yield. The low loss year column represents the shortest or fastest planting season in recent years.  The high loss year model represents the slowest planting season, or the one in which growers experienced the greatest delays.

The follow are the figures for individual states:

Best and worst case scenarios for top 12 Corn Belt states.

State

Best case bushel loss

Best case $ loss

Low loss year model

Worst case bushel loss

Worst case $ loss

High loss year model

State bushel target*

% of state bushel target at risk in worst case

OH

129,278,259

$904,947,813

2003

255,121,845

1,785,852,915

1998

708,180,000

36%

WI

53,948,037

$377,636,256

2000

186,590,547

$1,306,133,829

1996

720,900,000

26%

IN

134,867,889

$944,075,225

2000

282,867,071

$1,980,069,500

2002

1,109,790,000

25%

SD

156,946,086

$1,098,622,602

2000

253,480,590

$1,774,364,130

2010

1,033,560,000

25%

ND

50,863,643

$356,045,500

2000

88,472,429

$619,307,000

2009

363,000,000

24%

MI

32,658,214

$228,607,498

1993

70,066,071

$490,462,497

2002

412,500,000

17%

IL

153,312,457

$1,073,187,200

1987

271,471,086

$1,900,297,600

1983

2,403,200,000

11%

MN

57,354,000

$401,478,000

1998

82,397,000

$576,779,000

2006

1,538,130,000

5%

MO

18,392,837

$128,749,856

2001

30,938,398

$216,568,787

2003

588,060,000

5%

KS

20,740,010

$145,180,068

1992

37,578,845

$263,051,918

2006

869,550,000

4%

IA

12,443,002

$87,101,014

2000

21,029,866

$147,209,062

2003

2,782,780,000

1%

NE

13,950,750

$97,655,250

2000

26,785,440

$187,498,080

2003

1,860,100,000

1%

TOTAL

834,755,183

$5,843,286,282

1,606,799,188

$11,247,594,318

 

 

 

WeatherBill offers Total Weather Insurance policies, which provide coverage over and above federal crop insurance. A TWI Excessive Early Season Rainfall – policy automatically compensates growers for the weather events that can cause yield losses they will face later in the season as a result of not getting the crop planted during the ideal planting period.

"U.S. growers are more than capable of planting quickly in less than ideal conditions to generate high yields," said Jeff Hamlin, director of agronomic research for WeatherBill. "With higher yields comes higher risk.  WeatherBill expects that over 50 percent of TWI policyholders across the Midwest will receive payment from WeatherBill in the upcoming weeks for Excessive Early Season Rainfall and two thirds of policyholders whose Early Season coverage periods have concluded have already received checks triggered by this season's weather events. Growers didn't even need to file a claim. WeatherBill monitors all weather data and sends payments to growers automatically." Says Jeff Hamlin, director of agronomic research for WeatherBill.

The methodology used to compile the Weather Financial Impact Report, relies on local university research analysis from each of the top 12 corn producing states to determine the potential number of bushels of corn produced in those states that would be at risk as a result of delayed planting. WeatherBill evaluated historical data from each state indicating the percentage of acres of corn planted by the week of May 9 of a given year – both the highest and the lowest percentage years – and compared each set of numbers to the current $7 a bushel commodity price at the time of the May 9 planting reports and the average bushels of corn potentially produced by each state. 

For more information, see www.weatherbill.com/2011season.

Source: WeatherBill

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