Crop Insurance Payouts Clear $10 Billion

February 13, 2014 11:50 AM
 

 via a special arrangement with Informa Economics, Inc.


Increase in indemnities pushes loss ratio near 0.9


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


U.S. crop insurance indemnities moved to $10.390 billion as of Feb. 10, pushing the loss ratio for the program up to 0.88, according to Risk Management Agency (RMA) data.

Corn ($4.378 billion), wheat ($2.242 billion) and soybeans ($1.052 billion) remain the only three major commodities with payouts that are over $1 billion for the 2013 crop year.

2013 Crops

Week Ended

Net Acres Insured
(million)

Premiums Paid
(Billion dollars)

Subsidy
(Billion dollars)

Indemnities
(Billion dollars)

Loss Ratio

Corn

02/10/14

84.713

$4.681

$2.824

$4.378

.94

02/03/14

84.744

$4.684

$2.825

$4.663

1.00

Cotton

02/10/14

9.831

$0.674

$0.442

$0.900

1.33

02/03/14

9.821

$0.673

$0.441

$0.879

1.31

Pasture & Rangeland

02/10/14

54.188

$0.196

$0.105

$0.158

.81

02/03/14

54.179

$0.195

$0.105

$0.154

.79

Peanuts

02/10/14

0.949

$0.046

$0.027

$0.022

.47

02/03/14

0.948

$0.046

$0.027

$0.021

.46

Rice

02/10/14

2.616

$0.062

$0.042

$0.114

1.85

02/03/14

2.614

$0.062

$0.042

$0.113

1.84

Sorghum

02/10/14

5.792

$0.277

$0.177

$0.350

1.26

02/03/14

5.789

$0.277

$0.177

$0.341

1.23

Soybeans

02/10/14

67.450

$2.492

$1.535

$1.052

.42

02/03/14

67.417

$2.490

$1.534

$1.004

.40

Burley Tobacco

02/10/14

0.065

$0.021

$0.012

$0.011

.51

02/03/14

0.065

$0.021

$0.012

$0.010

.45

Flue-Cured Tobacco

02/10/14

0.220

$0.047

$0.027

$0.075

1.59

01/27/14

0.220

$0.047

$0.027

$0.075

1.57

Wheat

02/10/14

48.554

$1.979

$1.247

$2.242

1.13

02/03/14

48.542

$1.978

$1.247

$2.236

1.13

TOTAL

02/10/14

296.255

$11.773

$7.275

$10.390

.88

02/03/14

296.166

$11.766

$7.271

$9.995

.85

 

As noted above, corn payouts remain the largest. But that is not surprising when the crop leads all other crops in terms of coverage under the program. Corn and soybean coverage accounts for around 70 percent of the coverage under the program and that total moves to around 80 percent when wheat is included:

Crop

Coverage
Amount

Percent of
Total

Corn

$56.4 Billion

45.9%

Soybeans

$27.8 Billion

22.6%

Wheat

$11.7 Billion

9.5%

Cotton

$3.8 Billion

3.1%

Nursery (FG&C)

$1.5 Billion

1.2%

Rice

$1.3 Billion

1.0%

Potatoes

$1.1 Billion

0.9%

Citrus (incl trees)

$2.6 Billion

2.1%

All Others

$16.8 Billion

13.6%

Total

$123.0 Billion

100.0%

 


Comments: This marks the third year in a row that payouts under the crop insurance program have exceeded $10 billion but so far, only one of those years has seen the loss ratio move past 1.0 – 2012 at 1.57.


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

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