In last week’s blog we answered a question about where the ceiling factor might end up at for 2012. At the time, MC was thinking that the nationwide crop insurance program would end up just a bit over $10 billion in total 2012 premium and that the ceiling factor might end up around 65 or 66%. This week we find that the RMA summary of business for total premiums has spiked to nearly $10.5 billion and suggestions are that this is would be around 98% done. Other suggestions are that the 2012 industry premium will hit $11 billion after all is said and done.
In any case, the ceiling factor at 65% train has probably left the station and we are likely headed down to 62% or even lower for a final number. We are sorry for the obvious miss and we are left to wonder exactly how the premium reached this level with price elections and volatility factors coming down on the core book of spring crops. FYI, Texas has again exceeded $1 billion in industry premium and North Dakota is running second at over $940 billion as of 08-13-2012.