Rate of increase in payouts slowing
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Crop insurance indemnities total $5.482 billion as of Feb. 8, 2016, up about $600 million over the past month, but still the smallest payouts since the 2010 crop year, according to Risk Management Agency (RMA) data. The level of net acres insured for 2015 crops appears to have set a new record, reaching 298.204 million, ahead of the prior high-water mark of 296.089 million acres in 2013. The loss ratio for the program is at .56, matching the 2010 mark of .56 when indemnities totaled $4.254 billion. This also marks the first year since 2010 that premiums have been under the $10 billion mark. As for Feb. 8, payouts have surpassed $1 billion for three major crops – corn at $1.496 billion, wheat at $1.182 billion and soybeans at $1.044 billion. Payouts for those three crops combined account for more than two-thirds of the level paid out so far.
Comments: Despite there being record net acres insured, payouts under the program are still well below year-ago and are nearly 70% under the record payouts of $17.444 billion for the 2012 crop year. The record net acres insured also come with the addition of the Stacked Income Protection (STAX) program for cotton being available in most areas for 2015 crops, with 2.468 million acres net acres enrolled in that option.
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