Corn for Silage, Insurance and Farm Program Considerations
Corn producers need to contact their crop insurance provider and their county Farm Service Agency (FSA) before harvesting corn for silage that was reported as planted for grain. Failure to do so may jeopardize insurance benefits as well as a potential loan deficiency payment (LDP), according to Dwight Aakre, North Dakota State University farm management specialist.
Crop insurance regulations state that if you intend to harvest any acreage in a manner other than what was reported for coverage (i.e. you reported planting it for harvest as grain but will harvest as silage), you must notify your insurance provider of your intentions before harvest begins. Production to count for indemnity purposes will be determined based on the type you reported for coverage, which in most cases would be grain. “An insurance company will likely require a producer to leave a number of unharvested rows at specified intervals across the field to be used for final yield appraisal,” Aakre says. “If you fail to notify your insurance agent before you begin harvesting for silage, the production guarantee will be used to determine the production to count, therefore resulting in no indemnity payment.”
Producers also need to be aware of farm program implications when harvesting corn as silage rather than grain. Income support payments made through FSA include direct, counter-cyclical and loan deficiency payments. Direct and counter-cyclical payments are not impacted by a producer’s harvesting decision. These payments are made on program yields which are de-coupled from current year yield. However, the availability of an LDP may be affected.
An LDP is made on actual grain production, regardless of the way the crop was harvested. As of mid August, no LDP was available for corn in North Dakota. With the market price close to loan and harvest still two months away, the potential for an LDP is likely. “In order to receive an LDP for corn or any other loan eligible commodity, producers must maintain beneficial interest through harvest or until the crop is marketed, whichever is later, Aakre says. “Producers planning to chop any of their corn for silage should complete FSA form CCC-709 before beginning to chop if they plan to start feeding the silage immediately. Corn that is sold standing in the field is not eligible for an LDP because beneficial interest was lost prior to harvest when the sale was made.”
The yield for an LDP for corn harvested for silage will be the appraised yield determined for crop insurance coverage. If the crop is not insured, the FSA county committee will assign a yield for payment of an LDP.