U.S. 2012 Crop Insurance Indemnities Reach $17.362 Billion

June 18, 2013 05:09 AM
 

via a special arrangement with Informa Economics, Inc.

Corn payouts alone now total $11.8 billion; 2013 indemnities on the rise already


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


Crop insurance indemnities for 2012 crops have reached $17.362 billion and continue to expand slightly the record level of payouts for the crop insurance program, according to Risk Management Agency (RMA) data.

As is typical for this time of year, payouts under the program are rising very slowly as most of the 2012 losses have been processed. For example, on 2011 crops (the prior record payout year) the level of indemnities was at $10.802 billion at this point a year ago, and rose only 0.5 percent to the current mark of $10.863 billion.


Crop

Week Ended

Net Acres Insured
(million)

Premiums Paid
(Billion dollars)

Subsidy
(Billion dollars)

Indemnities
(Billion dollars)

Loss Ratio

Corn

06/17/13

81.417

$4.328

$2.688

$11.802

2.73

06/10/13

81.406

$4.327

$2.687

$11.788

2.72

Cotton

06/17/13

11.411

$0.835

$0.553

$1.092

1.31

06/10/13

11.410

$0.835

$0.553

$1.092

1.31

Pasture & Rangeland

06/17/13

48.149

$0.164

$0.089

$0.182

1.11

06/10/13

48.143

$0.164

$0.089

$0.182

1.11

Peanuts

06/17/13

1.319

$0.088

$0.052

$0.026

.29

06/10/13

1.319

$0.088

$0.052

$0.026

.29

Rice

06/17/13

2.106

$0.055

$0.039

$0.041

.74

06/10/13

2.106

$0.055

$0.039

$0.041

.74

Sorghum

06/17/13

4.677

$0.214

$0.138

$0.402

1.88

06/10/13

4.677

$0.214

$0.138

$0.402

1.88

Soybeans

06/17/13

65.148

$2.349

$1.472

$2.128

.91

06/10/13

65.144

$2.349

$1.472

$2.126

.91

Burley Tobacco

06/17/13

0.082

$0.026

$0.015

$0.035

1.33

06/10/13

0.082

$0.026

$0.015

$0.035

1.33

Flue-Cured Tobacco

06/17/13

0.201

$0.039

$0.022

$0.041

1.06

06/10/13

0.201

$0.039

$0.022

$0.041

1.06

Wheat

06/17/13

46.471

$1.786

$1.113

$0.758

.42

06/10/13

46.471

$1.786

$1.113

$0.758

.42

TOTAL

06/17/13

282.729

$11.101

$6.969

$17.362

1.56

06/10/13

282.698

$11.100

$6.968

$17.346

1.56


For 2013, pasture and rangeland forage coverage has already been put in place on more net acres than in 2012 – 48.846 million net acres insured versus 48.149 million. Already, $27.7 million in indemnities have been made on 2013 pasture and rangeland forage.

Also, wheat indemnities have reached $399.5 million for 2013 crops, nearly 53 percent of the level of payouts for 2012 crops with the loss ratio already at .28 for 2013 wheat. For all crops, 2013-crop payouts are at $486 million with a .19 loss ratio.


Comments: If the same level of increase for 2011 indemnities is seen for 2012 indemnities, it would suggest total payouts reaching around $17.45 billion. Further, that level of indemnities is not the level of total government costs for the program but rather the total payouts. Similarly, a loss ratio of greater than 1.0 (2002 was the last crop year with a loss ratio of greater than 1.0) only means the level of payouts has exceeded the level of premiums paid in.


 

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


 


 

 

 

 

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