Crop insurance payouts may break double the previous record

private Crop Insurance
Mogix UV Light Sale

Crop InsuranceSome estimates have claimed that the payments will be greater than $25 billion.

After crunching the numbers for this year’s crop insurance payments, it looks as though this coverage – which has been vital to farmers this year due to the widespread droughts and floods – it looks as though the payouts will be greater than $25 billion.

This will be over twice the $10.8 billion record high that was set in 2011.

This year, over 80 percent of the corn fields had crop insurance coverage. Clearly, this was significantly higher than the 15 percent of covered acres back in 1988, when the Midwest experienced the last time a comparable drought occurred. Furthermore, today’s coverage provides notably improved coverage over the policies that were available in the 80’s.

Crop insurance wrote over 1.2 million policies this year, in order to cover the farms.

Those policies covered over 280 million acres of farmland. Farmers paid approximately $4 billion for this coverage, which suggests that the insurers will be paying out a huge amount more than their take from premiums, and that taxpayers may need to pay over $10 billion to make up the difference. This is on top of the almost $5 billion in premiums subsidies that are already on taxpayer shoulders.

Over half of the policies written for crop insurance this year will experience claims. Some of the payouts – those that are linked with the harvest price option – are expected to be very large.

This month’s data has shown that the corn harvest price option will be around $7.50 per bushel, and that the same amount of soybeans will be close to $15.50. These are the prices that are used in order to calculate how much the grower’s revenue missed the benchmark.

Some reports have indicated that there will be payments for corn farmers that will be as high as $1,200 per acre. All things considered, these price options, combined with the crop insurance payments for areas that experienced the heaviest impact from the drought, has indicated that despite the low yields, the farms will still be able to do relatively well when this year is done.

Related posts

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.