Crop Insurance Today Second Quarter 2020 - 16

Table 4

Top 10 Premiums &
Indemnities Ranked by
State and Crop for 2019

Fig. 9

2019 MPCI Premium and Loss Ratios - All Plans Combined
VT 1.29

PREMIUMS BY STATE
RANK

STATE

PREMIUMS (MIL.$)

1
2
3
4
5
6
7
8
9
10

TX
ND
KS
IL
SD
IA
MN
NE
CA
MO
Top 10 Sub-Total
All Other

1,031.6
849.4
695.0
669.5
655.1
633.0
584.2
531.8
433.2
406.3
6,489.0
3,618.3

NH 0.47
MA 0.48
RI 1.11
CT 0.06
NJ 0.69
DE 0.36
MD 0.40

Premium

(0.00 - 0.5)

(0 - 10,000,000)

(0.5 - 0.75)

INDEMNITY BY STATE
RANK

STATE

INDEMNITY (MIL.$)

1
2
3
4
5
6
7
8
9
10

TX
SD
ND
MN
IL
OH
MO
IN
CA
AR
Top 10 Sub-Total
All Other

1,173.9
1,081.6
803.7
786.6
670.0
507.1
459.2
417.1
341.7
312.1
6,553.1
3,327.6

PREMIUMS BY CROP
RANK

STATE

1
Corn
2
Soybeans
3
Cotton
4
Wheat
5
PRF
6
Grain Sorghum
7 Whole Farm Revenue
8
Apples
9
Rice
10
Potatoes
Top 10 Sub-Total
All Other

PREMIUMS (MIL.$)

3,738.7
1,873.1
1,109.4
956.9
581.3
155.0
134.4
113.2
97.8
83.9
8,843.9
1,263.4

INDEMNITY BY CROP
RANK

STATE

INDEMNITY (MIL.$)

1
2
3
4
5
6
7
8
9
10

Cotton
Corn
Soybeans
Wheat
PRF
Flu Cured Tobacco
Nursery
Grain Sorghum
Dry Peas
Oranges
Top 10 Sub-Total
All Other

3,853.5
1,917.3
1,077.1
929.3
360.8
278.0
171.8
110.1
90.1
78.5
8,866.6
1,014.1

Source: RMA Summary of Business

SECONDQUARTER2020

(0.75 - 1)

(10,000,000 - 100,000,000)

(1 - 1.25)

(100,000,000 - 250,000,000)

(1.25 - 1.5)

(250,000,000 - 500,000,000)

(1.5 - 3.00)

(500,000,000 - 1,200,000,000)

Data as of April 13, 2020
Source: RMA Summary of Business

ratio of 100 percent, with more than 86 percent
of the losses attributable to excess moisture and
cold wet weather.
Figure 9 shows a map of state loss ratios and
premium volumes for 2019. Colors are used to
identify states with similar loss ratios, and shading identifies states with similar premium volumes. Five states, Ohio, Arkansas, Michigan,
South Dakota, and Mississippi had loss ratios
exceeding 150 percent. The 14 other states with
loss ratios above 100 percent included: Georgia,
Hawaii, Illinois, Indiana, Louisiana, Minnesota, Missouri, New York, North Carolina, Rhode
Island, South Carolina, Texas, Vermont, and
Wisconsin. Eight of these states had premiums
of exceeding $100 million: Georgia, Illinois, Indiana, Minnesota, Missouri, North Carolina,
Texas, and Wisconsin. Total indemnities for all
19 states with loss ratios over 100 totaled $6.89
billion, equivalent to 69 percent of the overall
U.S. payout. The five states with the lowest loss
ratios were, in order, Connecticut at 0.06, Alaska
at 0.15, Maine at 0.36, Delaware at 0.36, and West
Virginia at 0.38. Of the 25 crops having the largest premium volume, the highest loss ratios were
for sugar beets at 3.21, rice at 2.85, flue cured tobacco at 2.03, cherries at 1.37, peanuts at 1.28,
dry beans at 1.22, cotton at 1.13, corn at 1.04,
and, soybeans at 1.03.

Revenue Products

The projected base prices used to establish
the value of a crop and the insured liability

under the Revenue Protection and Yield Protection forms of insurance policies are shown
in Table 5, for crop years 2013 through 2020.
Projected base prices are the average of futures prices during the discovery month, i.e.
the month preceding the sales closing date for
a policy.
Base prices are influenced by various factors,
including remaining stocks of the crop, planting intentions in the United States, increasing
yields, changes in demand for the crop, availability of alternatives, and growing conditions
in other countries. Base prices in 2016 were at
or near the low end of the price range seen in
recent years.
Corn represents nearly 40 percent of the
value of all field crop production in 2019 and
has a strong influence on the prices of other
crops. Figure 10 shows corn futures prices for
the contract for December delivery for each
crop season starting with 2012 and continuing
through 2019.
The extraordinary year in the series is obviously 2012. As the drought set in, prices ran up
to more than $8.00 per bushel by late August.
With the decline in demand at the higher price
level, combined with an increase in foreign
production, prices began to moderate, ending
the year above $7.00. For 2013 and 2014, initial prices were well above $4.00 but eventually
trended down through the course of both seasons. Overall, pricing behavior for 2015 through
2019 was remarkably similar, beginning around

Crop Insurance Today Second Quarter 2020

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