In the wettest year on record in the state's history, an unprecedented number of South Dakota's farmers have had to rely on prevented planting payments from their crop insurance.
Heather Fillaus, an insurance officer for Farm Credit Services of America, said that between 95 and 98 percent of customers at the insurer's Mitchell office have claimed prevent plant on at least some of their acreage, although the amount of acreage varies widely from one operation to another. In past years, Fillaus said, it's been common to see that number under 50 percent.
"We haven't had a year like 2019 ever before," Fillaus told The Daily Republic on Thursday. "You talk to some of these 80-year-old farmers, and they say that they've never seen a year like this before. ... This year, we had guys that farm a vast amount of acres that didn't get anything planted or that maybe only got a few acres planted, which is very, very outside the norm for around here."
Steve Gaston, general manager of the Forestburg Farmers Elevator, said he's heard complaints both from farmers who have had to claim a lot of prevent plant acres as well as those who were unable to meet the requirements for a prevent plant payment.
"It's slowed up considerably," Gaston said of the amount of grain the elevator's seen as rain continues to fall around the area. "Guys that aren't going to get a crop in the ground, they're going to probably sit on some of their corn and stuff for their own use."
Farm Credit Services of America has offices in South Dakota, Nebraska, Wyoming and Iowa. While much of the Midwest has seen record-breaking rainfall this year that's prevented planting for farmers and increased the number of insurance claims made, Fillaus said 53 percent of Farm Credit Services of America's prevent plant acreage claimed this year are located in southeastern South Dakota.
"Right now, we're in a tough ag environment," she said. "We've got high input costs, low market prices, guys struggling to get into the field all spring long. When you finally get out in the field, things were late planted. Late-planted crops typically don't yield as well, so you don't tend to have as good a yield, so you're not going to get paid as well when you sell it. There's just a lot of frustrations in the country out there this spring and summer."
Last week, the USDA opened applications for its Market Facilitation Program, which is aimed at providing assistance to producers nationwide who have been impacted this year by tariffs and other barriers to exporting goods. Up to $14.5 billion has been approved for the program, which covers acreage planted on or before Friday.
The bulk of MFP payments will be made based on planted acreage of non-specialty crops, with farmers eligible to receive between $15 and $150 in reimbursement per acre, with farms in counties with lower market prices and more barriers eligible for the highest levels of payment.
Many farmers in southeast South Dakota will not see substantial MFP payouts for two reasons. First, farmers who claimed prevented planting on a large amount of their acreage have less planted acreage that's eligible for an MFP payout. Second, market prices in the area were driven up by a lack of planted acreage this spring, meaning the acreage that is eligible for an MFP claim will amount to a smaller payout than in an area where market prices were lower.
"MFP does pay a little bit on some of the cover crops that these guys were able to plant on their P.P. ground," Fillaus said. "However, there are stipulations to that as well, and a lot of farmers are still struggling even to get these cover crops planted in. ... There's still ground that guys can't get across with a tractor."
Fillaus said inaccurate information about prevent plant has been spread this year. To combat that, Farm Credit Services' offices in Mitchell, Yankton and Sioux Falls coordinated a series of meetings throughout the region this spring, which were open to the public, including non-customers. More than 400 producers in total attended a meeting to learn more about navigating prevent plant.
"P.P.'s not a profit maker, and with this ag environment that we have, there are some (farms) that are not as financially stable as others," Fillaus said. "Some of them are going to be able to barely get by, and some of them are going to definitely not make it through the year. It just depends on their situation. That's why making sure that you've got good insurance coverage going forward is so important. That could be the difference between going in the red and breaking even on a year like this."
With more coverage comes both more protection and a higher price tag on crop insurance premiums. In order to get the insurance coverage they need for their specific operation, Fillaus said, producers need to take into account a number of factors, including how much risk they can afford to take and what their break-even costs are.
"We want our farmers to succeed," Fillaus said. "Their success is our success. I don't want (the insurance company) to have to pay out. I want a guy to be able to make money and not have to collect on crop insurance. But unfortunately, Mother Nature has different plans."