Unrelenting rain puts U.S. farmers on insurance-deadline watch

Growers are increasingly weighing how best to get paid and ease the impact from the bad weather and an escalating U.S.-China trade war.

Floodwaters surround corn sitting under a collapsed grain bins in this aerial photograph over Pacific Junction, Iowa, U.S., on Saturday, March 23, 2019. The deluge that devastated so much of the Midwest over the last week could be a preview for one of the worst years for flooding in the U.S., according to federal weather officials. (Photographer: Daniel Acker/Bloomberg)

(Bloomberg) — Kansas farmer Mark Nelson has a day to plant his corn or lose the insurance that protects him from a drop in prices or yield.

Instead, he’s hopping on a plane to visit his father in Chicago.

Nelson is now considering a different type of insurance coverage known as prevented-plant claims, which pay out when farmers are unable to sow crops at all. With unceasing rain keeping farmers out of fields, growers are increasingly weighing how best to get paid and ease the impact from the bad weather and an escalating U.S.-China trade war.

“You hate to farm for insurance, but in a year like this, you keep that in the back of your mind,” Nelson, whose farm is near the east-central town of Paola, said by phone.

Storms across the Midwest and Great Plains have resulted in the wettest 12-month stretch on record in the U.S., with the deluge closing refineries and snarling Mississippi River traffic. Crucially for agriculture markets, it’s also hampered crop planting. Worries over tighter supplies due to the soggy weather drove Chicago corn futures to surge as much as 3.9% on Friday, topping $4 a bushel and rising to the highest level in almost a year.

The wet weather’s showing no signs of easing, and the insurance deadline for sowing has already passed for some farmers in southwestern Missouri, southeastern Kansas and western Tennessee. They now have to decide whether to plant with less coverage, or make prevented-plant claims.

Further complicating matters is President Donald Trump’s announcement on Thursday that farmers could apply for a slice of a $16 billion aid package to mitigate the impact of the U.S.-China trade war. However, in order to qualify, farmers must plant crops. Then, payments will depend on production in the their county.

The Senate also passed a $19.1 billion natural disaster relief package that includes $3 billion related to the loss of crops in recent hurricanes, flooding and for seeds prevented from planting this year. A Republican House member temporarily blocked fast-track passage, meaning lawmakers will probably vote when they return in early June from a week-long recess.

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