US Crop Insurance Indemnities Near $15 Billion on 2012 Crops

February 21, 2013 01:03 AM
 

via a special arrangement with Informa Economics, Inc.

Three crops have indemnities over $1 billion


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


Indemnities paid out under the federal crop insurance program totaled $14.704 billion as of Feb. 18, up more than $1 billion over the past three weeks and continuing to swell the record level of payouts under the program, according to Risk Management Agency (RMA) data.

Corn payouts continue as the largest for 2012 crops, reaching $9.652 billion which pushes the loss ratio on corn to 2.24 – for every $1 of premiums paid in, the program is paying out $2.24. Only cotton ($1.040 bil.) and soybeans $1.908 billion) have passed the $1 billion mark. So far, corn payouts have accounted for two-thirds of those made for all 2012 crops.

As for 2013 crops, already 86.324 million net acres are insured, ahead of the pace seen at this point a year ago when 80.206 million net acres were insured for 2012 crops.

Crop

Week Ended

Net Acres Insured
(million)

Premiums Paid
(Billion dollars)

Subsidy
(Billion dollars)

Indemnities
(Billion dollars)

Loss Ratio

Corn

02/18/13

81.214

$4.315

$2.679

$9.652

2.24

02/11/13

81.247

$4.317

$2.681

$9.270

2.15

Cotton

02/18/13

11.406

$0.835

$0.553

$1.040

1.25

02/11/13

11.398

$0.834

$0.552

$1.027

1.23

Pasture & Rangeland

02/18/13

48.092

$0.163

$0.088

$0.128

.78

02/11/13

48.091

$0.163

$0.088

$0.127

.78

Peanuts

02/18/13

1.305

$0.086

$0.051

$0.022

.26

02/11/13

1.307

$0.086

$0.051

$0.021

.25

Rice

02/18/13

2.106

$0.055

$0.039

$0.039

.71

02/11/13

2.105

$0.055

$0.039

$0.039

.71

Soybeans

02/18/13

64.925

$2.341

$1.466

$1.908

.82

02/11/13

65.052

$2.345

$1.469

$1.853

.79

Wheat

02/18/13

46.370

$1.782

$1.110

$0.728

.41

02/11/13

46.368

$1.782

$1.110

$0.727

.41

TOTAL

02/18/13

282.018

$11.068

$6.948

$14.704

1.33

02/11/13

282.119

$11.071

$6.950

$14.229

1.29


Comments: While the 2012 payouts are clearly an aberration for the crop insurance program given that payouts for corn – the main 2012 crop negatively impacted – are now just $1.2 billion under the payouts for all 2011 crops. This will keep the program as a focal point for the anti-subsidy crowd as the premium subsidy is still around 62 percent despite the total subsidy in dollar terms being lower for 2012 crops than it was for 2011. 


 

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


 


 

 

 

 

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