Nate Bruce, Farm Business Management Specialist, nsbruce@udel.edu
Dryland corn yields will be significantly lower due to the extreme drought and heat on Delmarva. Dryland soybeans have a chance to produce a crop if weather conditions become favorable in July and August. The weather outlook for this is bleak at best. Some producers have started to think about connecting the brush hog and mowing down dryland corn. Before doing this, make sure to have a discussion with your crop insurance agent about filing a claim. Some producers may be interested in estimating what indemnity payments could be for this current crop year; Farm Credit has developed an excellent price guarantee calculator for you to enter your own coverage level, actual production history yield (APH), projected prices, harvest prices, and estimated crop year yield. Below is a link to the calculator:
https://www.fcsamerica.com/insurance/resources/crop-insurance-prices
The projected price for corn is the average of December CME Group futures contract prices during the month of February while the projected price for soybeans is the average of November CME Group futures contract price during the month of February. These were:
Corn – $4.66
Soybeans – $11.55
Considering the downward trend in corn and soybean prices, the harvest futures price to use in the calculator should be significantly lower than the projected price. More than likely, this won’t matter as indemnity payments are based on the greater of the projected price or harvest price. University of Maryland enterprise budgets estimate non-irrigated corn production being $689.64 per acre while non-irrigated conventional corn production being $717.15 per acre. Evaluating potential dryland corn yields and substituting the USDA NASS dryland corn yield for Delaware as the APH, current conditions will produce indemnity payments that fall short of about $100 per acre from covering these expenses at an 85% coverage level. Variable costs will be covered, but not all production costs. University of Maryland enterprise budgets list total expenses for non-irrigated soybeans at $422.87 per acre. The next couple months will be critical for soybeans.