Crop Insurance Indemnities Total $1.2 Billion for 2016 Crops

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U.S. crop insurance indemnities are at $1.226 billion as of October 10 after having passed the $1 billion mark at the end of September, above where the totals stood for 2015 crops which was $6.280 billion, according to data from USDA’s Risk Management Agency (RMA).

Payouts for wheat are leading all crops at this stage with indemnities of $361 million followed by corn at $273 million, soybeans at $96 million and cotton at $91 million. That’s in stark contrast to the 2015 total season indemnities that were at $1.676 billion for corn, $1.219 billion for wheat, $1.155 billion for soybeans and $388 million for cotton.

Following is a comparison of where indemnities for 2016 and 2015 crops stand as of October 10, 2016:

At this point in 2015, indemnities for 2015 crops stood at $2.53 billion, well ahead of the current indemnity level for 2016 crops. This also puts the loss ratio at a very low .13 for 2016 crops compared to .26 at this point for 2015 crops.

Comments: Clearly the 2016 crop year so far is not seeing the level of losses that were incurred in the 2015 crop year with no payouts passing the $1 billion mark for any one crop. Another factor is that premiums paid and thus the premium subsidy involved has also come in lower compared to the 2015 crop season. That may come in handy as the farm bill debate approaches if that trend were to continue for the 2017 crop year.

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