Crop Insurance Payouts on 2012 Crops Edge Past $16.2 Billion

April 17, 2013 06:08 AM
 

via a special arrangement with Informa Economics, Inc.

Payouts for corn are now nearly same as those for all 2011 crops


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


U.S. crop insurance indemnities for 2012 crops have reached $16.235 billion as of April 15, with the loss ratio for the program holding at 1.46, according to Risk Management Agency (RMA) data.

Payouts for corn have now reached $10.830 billion, nearly the same as the indemnity level paid out for all 2011 crops -- $10.858 billion. The rise in indemnities on 2012 corn also pushed the loss ratio for corn to 2.51 as of April 15.


 

Crop

Week Ended

Net Acres Insured
(million)

Premiums Paid
(Billion dollars)

Subsidy
(Billion dollars)

Indemnities
(Billion dollars)

Loss Ratio

Corn

04/15/13

81.330

$4.322

$2.684

$10.830

2.51

04/08/13

81.282

$4.320

$2.682

$10.781

2.50

Cotton

04/15/13

11.412

$0.836

$0.553

$1.080

1.29

04/08/13

11.411

$0.835

$0.553

$1.079

1.29

Pasture & Rangeland

04/15/13

48.089

$0.164

$0.089

$0.181

1.10

04/08/13

48.076

$0.164

$0.089

$0.181

1.10

Peanuts

04/15/13

1.315

$0.087

$0.052

$0.025

.28

04/08/13

1.315

$0.087

$0.052

$0.025

.28

Rice

04/15/13

2.105

$0.055

$0.039

$0.041

.73

04/08/13

2.105

$0.055

$0.039

$0.040

.73

Sorghum

04/15/13

4.678

$0.214

$0.138

$0.401

1.88

04/08/13

4.676

$0.214

$0.138

$0.401

1.87

Soybeans

04/15/13

65.060

$2.346

$1.470

$2.040

.87

04/08/13

65.031

$2.345

$1.469

$2.032

.87

Wheat

04/15/13

46.402

$1.784

$1.111

$0.753

.42

04/08/13

46.340

$1.782

$1.110

$0.747

.42

TOTAL

04/08/13

282.333

$11.086

$6.959

$16.235

1.46

04/08/13

282.153

$11.078

$6.954

$16.161

1.46


Perspective on loss ratio. While the loss ratio for 2012 crops is at 1.46, this marks the first crop year since 2002 that the loss ratio for the program as a whole has been above 1.0 – even the prior record payout crop year of 2011 with $10.858 billion in indemnities had a loss ratio of .91.

For 2013, USDA notes that 86.128 million net acres are insured, ahead of the pace seen for 2012 crops at this point last year of 84.267 million net acres. The premium subsidy percentage so far for 2013 crops is also up from 2012, currently a 63.6 percent compared to being at 63.4 percent at this point last year for 2012 crops. However, the 2012 crop premium subsidy percentage currently stands at 62.7 percent.

Comments: Payouts for corn are expected to take another rise soon as the indemnities for Group Risk Income Protection (GRIP) coverage are expected to start showing up in the crop insurance system soon with talk of sizable payouts for corn in Illinois in particular. Final GRIP revenues are released by April 16 for corn and soybeans, following the crop year.


 

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


 

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