Crop Insurance Payouts Near $16.1 Billion for 2012 Crops

April 2, 2013 07:56 AM
 
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via a special arrangement with Informa Economics, Inc.

Indemnities to rise further as GRIP payments start rolling

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


Payouts for losses on 2012 crops have reached $16.089 billion as of April 1, pushing the loss ratio for the program up slightly to 1.45, according to Risk Management Agency data.

Corn easily retains its place as the largest payout on a by-crop basis, now put at $10.736 billion with a loss ratio of 2.48. But payouts for corn are likely to grow in coming weeks as indemnities for the Group Risk Income Protection (GRIP) coverage start to be registered in the system.

Crop

Week Ended

Net Acres Insured
(million)

Premiums Paid
(Billion dollars)

Subsidy
(Billion dollars)

Indemnities
(Billion dollars)

Loss Ratio

Corn

04/01/13

81.294

$4.320

$2.683

$10.736

2.48

03/25/13

81.289

$4.320

$2.683

$10.665

2.47

Cotton

04/01/13

11.407

$0.835

$0.553

$1.078

1.29

03/25/13

11.405

$0.835

$0.553

$1.076

1.29

Pasture & Rangeland

04/01/13

48.108

$0.164

$0.089

$0.181

1.10

03/25/13

48.106

$0.164

$0.089

$0.180

1.10

Peanuts

04/01/13

1.315

$0.087

$0.052

$0.025

.28

03/25/13

1.315

$0.087

$0.052

$0.025

.28

Rice

04/01/13

2.105

$0.055

$0.039

$0.040

.72

03/25/13

2.105

$0.055

$0.039

$0.040

.72

Soybeans

04/01/13

65.050

$2.345

$1.469

$2.029

.87

03/25/13

65.040

$2.345

$1.469

$2.024

.86

Wheat

04/01/13

46.394

$1.784

$1.111

$0.734

.41

03/25/13

46.391

$1.784

$1.111

$0.733

.41

TOTAL

04/01/13

282.283

$11.083

$6.957

$16.089

1.45

03/25/13

282.251

$11.081

$6.956

$16.003

1.44

Risk protection policies are the vast majority of policies sold and also indemnities paid out. Of the $16.089 billion in indemnities to date, $14.099 billion or more than 87 percent have been made on RP policies. Yield protection (YP) policies, by contrast, saw only $801 million in payouts as of April 1. The loss ratio on RP policies stands at 1.64 compared to 1.03 on YP policies.


Comments: Crop insurance clearly is a key factor that has kept the U.S. farm income situation solid despite the widespread drought which reduced output in several key areas of the country. 2012 will serve as a reference point for both crop insurance backers – because of the infusion of funds it has brought to farm country despite the output downturn -- and bashers – because of the record payouts for the program -- in coming months as the farm bill process unfolds. 



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


 


 

 

 

 

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