Crop Insurance Indemnities Top $14 Bil. for 2012 Crops; Corn Over $9 Billion

February 12, 2013 12:54 AM
 

via a special arrangement with Informa Economics, Inc.

Cotton payouts now over $1 billion; total program loss ratio hits 1.29

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


The record for U.S. crop insurance indemnities for 2012 crops rose to $14.229 billion as of Feb. 11, with corn payouts rising to over $9.2 billion, according to Risk Management Agency (RMA) data.

Payouts for corn, soybeans and now cotton have all topped $1 billion, with soybeans at $1.85 billion and cotton now at $1.027 billion.

The increase in payouts has also boosted the loss ratio for the program to 1.29 – for every dollar of premiums paid in, $1.29 in payouts has been made. For corn, the ratio has risen to 2.15 with cotton at 1.23. Corn and cotton are the only major US crops where the loss ratio is over 1.

As of Feb. 11, payouts to corn producers have accounted for 65 percent of the indemnities on 2012 crops.


Crop

Week Ended

Net Acres Insured
(million)

Premiums Paid
(Billion dollars)

Subsidy
(Billion dollars)

Indemnities
(Billion dollars)

Loss Ratio

Corn

02/11/13

81.247

$4.317

$2.681

$9.270

2.15

02/04/13

81.146

$4.312

$2.677

$8.855

2.05

Cotton

02/11/13

11.398

$0.834

$0.552

$1.027

1.23

02/04/13

11.390

$0.834

$0.552

$0.991

1.19

Pasture & Rangeland

02/11/13

48.091

$0.163

$0.088

$0.127

.78

02/04/13

48.120

$0.163

$0.088

$0.126

.77

Peanuts

02/11/13

1.307

$0.086

$0.051

$0.021

.25

02/04/13

1.306

$0.086

$0.051

$0.020

.24

Rice

02/11/13

2.105

$0.055

$0.039

$0.039

.71

02/04/13

2.105

$0.055

$0.039

$0.039

.71

Soybeans

02/11/13

65.052

$2.345

$1.469

$1.853

.79

02/04/13

65.022

$2.344

$1.469

$1.794

.77

Wheat

02/11/13

46.368

$1.782

$1.110

$0.727

.41

02/04/13

46.329

$1.780

$1.109

$0.723

.41

TOTAL

02/11/13

282.119

$11.071

$6.950

$14.229

1.29

02/04/13

281.903

$11.061

$6.943

$13.683

1.24


Comments: Crop insurance payouts continue to rise although the pace of the increases has slowed.  At this point in 2012, payouts for 2011 crops stood at roughly 90 percent of the eventual indemnities. If that pattern were to hold for 2012 crops, that would suggest payouts would reach over $15.5 billion while those in the US crop insurance industry keep focusing on a fiture of around $16 billion to eventually be issued for 2012 losses. 


 


 

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


 

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