Record Yields, Fewer Claims in 201607/18/2017
Favorable growing conditions and record yields for corn and soybean marked 2016 along with fewer loses, according to a report in the latest edition of Crop Insurance Today magazine.
Only seven states – all of which are in the Northeast – had loss ratios greater than 1.0, noted “2016: The Year in Review” authors Mechel Paggi, Frank Schnapp and Laurence Crane of National Crop Insurance Services. (Note: any number above 1.0 means that insurance claims paid out exceeded premiums received for policies).
“This reflects a welcome change from recent years where drought and other extreme weather events drove up indemnities to historic highs,” the authors noted. “The year-over-year variability of the returns is a reminder of the risk assumed by crop insurance providers in delivering this essential safety net for American farmers.”
It’s also a reminder of the risks and unpredictability farmers shoulder every day, which is exactly why so many purchase crop insurance to protect their businesses.
And the authors noted that farmers had plenty of skin in the game in 2016, paying $3.5 billion from their own pockets to purchase 1.2 million policies. Of those policies, 218,000 had claims to cover losses, a lower amount that past years.
While the overall conditions improved in 2016, weather was varied across the nation and produced damaging events.
Fall was a record warm season with worsening drought in the Southeast that resulted in wildfires. Hurricane Matthew, and tropical rainfall, brought record flooding to the Atlantic region.
The 15-page report details precipitation for each state by season, crop yields and production, commodity prices since 2000, and more. Some highlights:
- 2016 saw the most acres of soybeans planted in U.S. history
- Peanut production continued to trend up
- Rice acres were up 22 percent from 2015
- Cotton rebounded to 10.1 million acres
“Looking to the future, the American public is assured that crop insurance will be in place to provide financial stability for the many small, family farms that comprise the core of U.S. production agriculture,” the authors concluded. “Crop insurance will ensure that when the repeated disasters of recent years strike again, as they most assuredly will, U.S. farmers will be able to bounce back to produce again at high levels the food, feed, fiber and energy crops on which the U.S. and world population have come to expect and depend.”
Source: National Crop Insurance Services