2012 Crop Insurance Payouts Reach $17.256 Billion

May 14, 2013 05:37 AM
 

via a special arrangement with Informa Economics, Inc.

Loss ratio for program edges up to 1.56


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


Indemnities for 2012 crop losses have risen to $17.256 billion as of May 13, pushing the loss ratio for the program to 1.56, according to Risk Management Agency (RMA) data.

051313map

The loss ratios for several key crops remain at 1 or more – more than $1 in indemnities paid out for every $1 in premiums paid into the program. Corn edged up to 2.72 while cotton is at 1.30, pasture and rangeland is at 1.11 and sorghum stands at 1.88.

Perspective: While the loss ratio is up considerably from the prior record payout year of 2011 when it was at .90, the loss ratio for the program has not been above 1.0 since 2002.

Crop

Week Ended

Net Acres Insured
(million)

Premiums Paid
(Billion dollars)

Subsidy
(Billion dollars)

Indemnities
(Billion dollars)

Loss Ratio

Corn

05/13/13

81.341

$4.323

$2.684

$11.746

2.72

05/06/13

81.306

$4.321

$2.683

$11.700

2.71

Cotton

05/13/13

11.407

$0.835

$0.553

$1.082

1.30

05/06/13

11.404

$0.835

$0.553

$1.080

1.29

Pasture & Rangeland

05/13/13

48.115

$0.164

$0.089

$0.182

1.11

05/06/13

48.115

$0.164

$0.089

$0.182

1.11

Peanuts

05/13/13

1.317

$0.087

$0.052

$0.025

.29

05/06/13

1.316

$0.087

$0.052

$0.025

.29

Rice

05/13/13

2.104

$0.055

$0.039

$0.041

.74

05/06/13

2.105

$0.055

$0.039

$0.041

.74

Sorghum

05/13/13

4.677

$0.214

$0.138

$0.402

1.88

05/06/13

4.677

$0.214

$0.138

$0.402

1.88

Soybeans

05/13/13

65.086

$2.347

$1.470

$2.121

.90

05/06/13

65.058

$2.346

$1.470

$2.116

.90

Wheat

05/13/13

46.395

$1.784

$1.111

$0.756

.42

05/06/13

46.388

$1.783

$1.111

$0.753

.42

TOTAL

05/13/13

282.377

$11.080

$6.956

$17.256

1.56

05/06/13

282.290

$11.075

$6.953

$17.193

1.55


Enrollment in the program for 2013 continues to run ahead of where the 2012 progress was at this point last year
with 87.439 million net acres insured compared to 85.736 million net acres insured on 2012 crops one year ago.

Total net acres insured for 2012 crops stands at 282.377 million with 264.870 million net acres covered by something other than the catastrophic loss coverage.


Comments: The crop insurance payouts are rising at a much slower pace now that much of the 2012 data has worked through the system. This is typical for the program as the focus shifts from payouts on the past crop year to enrollment for the coming crop season.

Farm bill update. The Senate Agriculture Committee today as part of its farm bill markup adopted a package of 24 pre-negotiated amendments (link), including details of the agreement between farm groups, insurance companies and conservationists to link crop insurance with conservation compliance.

 

The committee later rejected, by voice vote, a proposal by Sen. John Hoeven (R-N.D.) to strip the conservation compliance provision from the bill. "It creates a whole new area where our farmers are going to have to undertake regulatory compliance and burden, as they have in so many others before," Hoeven said. Sen. Saxby Chambliss (R-Ga.) defended the conservation provision, saying "farmers should comply with conservation if they're going to get assistance from the federal government."

 


 

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


 


 

 

 

 

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