2012 Crop Insurance Indemnities Near $17 Billion

April 23, 2013 02:10 AM
 

via a special arrangement with Informa Economics, Inc.

Calculation of GRIP payouts prompts significant increase in indemnities


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


Indemnities for 2012 crops reached $16.992 billion as of April 22, reflecting the calculation of Group Risk Income Protection (GRIP) payouts, according to Risk Management Agency data.

The rise in payouts moved the loss ratio for the program overall to 1.53 and pushed that ratio for corn to 2.66 as of April 22.

The payouts for GRIP pushed corn indemnities to $11.518 billion, well above the $3.229 billion for 2011 crops and even above the total 2011-crop indemnities for all losses of $10.859 billion.

For all crops, GRIP indemnities are now at $665 million, moving it into the third spot in terms of policy payout types, ahead of actual production history (APH) indemnities of $601 million but behind $805 million for yield protection and $14.2 billion for Risk Protection (RP).


 

Crop

Week Ended

Net Acres Insured
(million)

Premiums Paid
(Billion dollars)

Subsidy
(Billion dollars)

Indemnities
(Billion dollars)

Loss Ratio

Corn

04/22/13

81.343

$4.323

$2.684

$11.518

2.66

04/15/13

81.330

$4.322

$2.684

$10.830

2.51

Cotton

04/22/13

11.412

$0.836

$0.553

$1.080

1.29

04/15/13

11.412

$0.836

$0.553

$1.080

1.29

Pasture & Rangeland

04/22/13

48.094

$0.164

$0.089

$0.181

1.10

04/15/13

48.089

$0.164

$0.089

$0.181

1.10

Peanuts

04/22/13

1.315

$0.087

$0.052

$0.025

.28

04/15/13

1.315

$0.087

$0.052

$0.025

.28

Rice

04/22/13

2.106

$0.055

$0.039

$0.041

.74

04/15/13

2.105

$0.055

$0.039

$0.041

.73

Sorghum

04/22/13

4.678

$0.214

$0.138

$0.401

1.88

04/15/13

4.678

$0.214

$0.138

$0.401

1.88

Soybeans

04/22/13

65.084

$2.347

$1.470

$2.102

.90

04/15/13

65.060

$2.346

$1.470

$2.040

.87

Wheat

04/22/13

46.405

$1.784

$1.111

$0.753

.42

04/15/13

46.402

$1.784

$1.111

$0.753

.42

TOTAL

04/22/13

282.386

$11.088

$6.960

$16.992

1.53

04/15/13

282.333

$11.086

$6.959

$16.235

1.46


Comments: Now the rate of increase in crop insurance indemnities should slow dramatically with the GRIP indemnities calculated following the release of county data last week by RMA. For 2011 crops, payouts at this point last year were at $10.714 billion and rose less than 1.5 percent to the current level of $10.859 billion. That, however, will not lessen the focus on crop insurance even though the premium subsidy for 2012 crops was down $500 million from the premium subsidy for 2011 crops.

In an early look for 2013 crops and insurance participation, a growing number of sources are predicting more farmers will buy crop insurance, and some at a higher level, especially after last year’s drought showed how well the program worked. Already, producers have 86.664 million net acres insured for 2013 crops which is ahead of the level seen for 2012 crops at this point last year of 84.413 million net acres.


 

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


 


 

 

 

 

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