Crop Insurance Today August 2012 - (Page 1)

TODAYPRESIDENT’S MESSAGE Should Never Be....” Laurie Langstraat, Editor TODAY IS PROVIDED AS A SERVICE OF NATIONAL CROP INSURANCE SERVICES® TO EDUCATE READERS ABOUT THE RISK MANAGEMENT TOOLS PRODUCERS USE TO PROTECT THEMSELVES FROM THE RISKS ASSOCIATED WITH PRODUCTION AGRICULTURE. “What is, and What Recently, I did an interview with Chris Clayton of DTN following Secretary-Vilsack’s White House Press Briefing on the drought, and Chris asked me if I had any song lyrics that came to mind as we discussed the drought situation and the critically essential role of crop insurance for the summer of 2012. In last year’s summer issue of TODAY magazine, we pulled Fire and Rain from the “deep tracks” to talk about the flooding along the Mississippi and Missouri Rivers as well as the prolonged drought occurring in the Southern Plains, particularly in the states of Kansas, Oklahoma, and Texas. This year, as our industry Tom Zacharias, NCIS President responds to the drought of 2012, we deal not only with the severity of the drought, but in addition, the politics of the Farm Bill, the associated negative publicity campaign of our critics, the uncertainty of a presidential election, and a struggling US and world economy. So upon further reflection, I went to the “vinyl” and pulled some classic Led Zeppelin from the shelf—What Is, and What Should Never Be. TODAY is published quarterly–February, May, August, and November by National Crop Insurance Services 8900 Indian Creek Parkway, Suite 600 Overland Park, Kansas 66210 If you move, or if your address is incorrect, please send old address label clipped from recent issue along with your new or corrected address to Laurie Langstraat, Editor, at the above address. What Is The Drought of 2012 Unfortunately, we have not seen the end of the drought of 2012. We could be in for a prolonged drought that began with the drought conditions in 2011 in the Southern Plains. No one knows. We do know that over one-half of U.S. counties have been declared natural disaster areas. According to USDA’s July 31, 2012 Weekly Weather and Crop Bulletin, we do know the condition of this year’s corn and soybean crops are both tracking with the 1988 crop conditions. The 1988 drought was the worst in recent history, with a loss ratio (total indemnities divided by total premium) of 2.45. We do know that crop insurance losses on that scale would cost insurance companies, farmers and taxpayers billions of dollars. Continued Pressure On the Agricultural Production Sector We do know agricultural commodity prices have risen to historic levels, and could continue to rise. According to the June 29, 2012 USDA Grain Stocks Report, U.S. stocks of most major grain crops, with the exception of soybeans, have dropped significantly compared to this same time last year. This is the short term outlook. Long term, we expect to continue to observe increased population and income growth. World population reached approximately seven billion people at the end of October 2011, and is expected to exceed eight billion in population by 2025. We do know short-term crop shortages relative to demand and long term population and income growth will continue to put enormous pressure on the agricultural production sector. Continued on page 27 NCIS® EXECUTIVE COMMITTEE Steve Rutledge, Chairman Ted Etheredge, Vice Chairman Tim Weber, Second Vice Chairman NCIS® MANAGEMENT Thomas P. Zacharias, President P. John Owen, General Counsel James M. Crist, CFO/COO Frank F. Schnapp, Senior Vice President Mike Sieben, Senior Vice President Creative Layout and Design by Graphic Arts of Topeka, Inc., Kansas Printed on recycled paper. CROP INSURANCE TODAY® 1 http://http://

Table of Contents for the Digital Edition of Crop Insurance Today August 2012

“What is, and What Should Never Be....”
Developing Risk Management Plans
Crop Insurance Rate of Return: Issues & Concerns
2011 Research Review
RMA/AIP Data Mining Steering Committee
NCIS Adjuster Training in Full Swing
Industry Support of FFA
Crop Insurance & Specialty Crops

Crop Insurance Today August 2012