What now?

WITH CORN STILL IN THE FIELD, FARMERS NEED TO DECIDE: HARVEST NOW OR WAIT UNTIL SPRING?

WITH HARVEST WRAPPING up and the weather growing cooler, there are concerns right across the province about the quality and marketability of this year’s corn crop.

Agricorp has characterized the corn crop that remains in the field this year as very high in moisture, with a low test weight and likely to have below average yield.  With a bleak picture like this, what are the options?

“This year, with many acres of corn still in the field, the decision at this late stage is whether to harvest a crop high in moisture or leave the corn in the field until spring,” suggests Jeff Davis, chair of the Ontario Corn Producers’ Association’s Agricorp Action Team.

The decision should be made by assessing all of the factors including the market opportunity, the availability of driers and bins and the impact weather will have on corn left in the field in a specific region.  However, if there is corn still in the field, the first step every producer with crop insurance should take is to phone Agricorp. 

“Producers should start by phoning Agricorp well before the crop insurance deadline of December 15,” says Lindsay Barfoot, Account Lead for the Grain Sector.  “Insurance claims will stay open for producers with unharvested corn until there is a resolution, as long as an Agricorp adjuster is involved in the case before the deadline.”

UNDERSTANDING MARKET OPTIONS
The next step is a market assessment.  With the glut of lower quality corn entering the market and dryers working overtime, it is imperative to have a game plan before harvesting.  Ethanol plants across the province are posting price discounts for corn up to grade four while feed mills are considering the impact on energy balance low test weights will have on corn-based rations. 

Greg Stewart, OMAFRA Corn Specialist, suggests low test weight may not affect the nutritional content from a feed standpoint.  Livestock producers, when using low test weight corn as a feedstock, will have to adjust the volume fed to compensate.

Reports out of the US are consistent with Canadian crop conditions with low test weights.  Yields are high across the Corn Belt but, according to DTN, mycotoxin concerns may affect the use of distillers’ grains.  Weather estimates from the US Midwest are calling for a higher snow fall and a potentially late spring for the third year in a row.  DTN analysts suggest that as a result, the market is likely to maintain at least a neutral stance toward corn from a weather factor standpoint.

WEIGHING THE OPTIONS
When it comes to individual farms, marketability and cost are always the most important considerations.  Producers need to weigh out the decision of leaving corn in the field over winter to save drying and storage costs against the potential grade and yield losses and the opportunity cost of not having corn available to sell if prices improve.

“Experience suggests that yield losses would normally lie somewhere between five to 35 percent for over wintering,” states Stewart.  “If you lost 10 percent of the crop but eliminated most of the drying charges for corn that was 35 percent moisture, you are further ahead to leave the crop. If on the other hand you lose 35 percent of the crop yield then net revenues will be significantly less than if you harvested and dried the crop today.”  For a more qualitative approach refer to the “considerations” side bar from Stewart on the left.

LOAN EXTENSIONS AND SALVAGE BENEFITS
If corn overwintering in the field is a consideration this year and an Agricorp adjuster is actively involved in the case file, there may be an opportunity for an ACC loan extension.  Both Saskatchewan and Manitoba producers have access to loan extension options and Ontario is considering following suit.  Contact ACC for more information as harvest progresses.

The other program available to producers is the Corn Salvage Benefit which compensates producers for additional costs associated with harvesting sample grade corn.  The benefit pays insured corn producers $0.49 per eligible bushel. The number of eligible bushels is either your harvested yield of sample grade corn, or the difference between your total guaranteed production and your harvested yield of grade one through five corn, whichever is less.

Grain Farmers of Ontario is working closely with Agricorp, OMAFRA and other industry stakeholders to remain current on all issues as harvest progresses.  Any updates to programs or industry information will be available through our website at www.gfo.ca.

• AGRICORP UPDATE ON 2009 CORN CROP
  
• If customers have damage to their crops, they should call Agricorp immediately at     1-888-247-4999 to open a damage report. Because every situation is different, an adjuster will work directly with each customer who reports damage to make sure that they fully understand their Production Insurance coverage and how it can protect them as much as possible.
• The deadline to report yields, any remaining unharvested acres, and crop damage is December 15, 2009.
• Growers with Production Insurance must look for every opportunity to harvest and market their corn crop to the best of their ability, the same way a grower without Production Insurance would do.
• Insurance coverage ends on December 15 unless damage has been reported to Agricorp and an insured peril has delayed the harvest. If an insured peril has been reported and causes a delay in harvesting, a producer’s Production Insurance coverage will continue until the full impact of the peril has been determined and their crop is either harvested or proven to be unharvestable. In some situations this may mean that coverage is extended until the spring of 2010 at which time the final disposition of the crop can be determined.
• Some customers may choose to leave their crop in the field until a better harvest and market opportunity becomes available.
• Growers with Production Insurance may qualify for a corn salvage benefit of $0.49 per bushel for their sample grade corn, up to their guaranteed production.
• As of November 16, 2009, 858 customers have reported damage on 144,757 acres. Total insured corn acreage in 2009 is 1,431,705 acres.

CONSIDERATIONS FOR HARVEST
Key questions to consider when making the decision to harvest now or delay harvest until spring:

1. Standability: Evaluate stalk strength using the pinch or push test. Is there reasonable evidence that stalk strength is weak or suspect?
2. Snow Load: Do you live in an area where snow load is often significant in the fields?
3. Crop Quality: Can you harvest the crop now and get corn that is grade four or better?
4. Corn Moisture: Is your corn moisture currently less than 35 percent?
5. Drying Charges: Is your corn drying done on your own farm?
6. Soil Conditions: Can you harvest today without rutting the soil?
   

If you answer “yes” to the majority of the above questions harvesting now is probably the best decision.

However, if you answered “no” to many of these questions delaying corn harvest, perhaps until spring may make more sense. •