Crop Insurance Today May 2012 - (Page 4)

TODAYcrop insurance 2011 Year in Review Year in Review is an annual feature of Crop Insurance TODAY© intended to provide an overview of the performance of crop insurance during the previous crop year. By Keith Collins and Harun Bulut, NCIS Overview The U.S. crop insurance program experienced “a year for the record books” in 2011. Crop insurance companies paid out a record-high $10.5 billion in indemnity payments in 2011, surpassing the former record of $8.7 billion paid in 2008. (All data in this report are as of April 2, 2011.) These payments proved vital for farmers facing a wide spectrum of natural disasters in 2011, including severe droughts in the Southern Plains, hard freezes in Florida, major flooding along the Mississippi, and tropical storms in the South and Northeast. The Southern and Central Plains endured the most severe losses. One out of every four dollars of indemnities went to farmers and ranchers in Texas, who received $2.6 billion in indemnities, followed by North Dakota, Kansas, South Dakota, Minnesota and Oklahoma. With the record indemnities, crop insurance losses as a percent of premium have already reached 2008’s level — the highest in the past eight years — with more losses yet to be paid. Regarding the crop hail business, paid losses as a percent of premium exceeded 100 percent on a countrywide basis for only the third time since 1948. 4 MAY 2012 The weather disruptions of 2011 had significant impacts on crop acreage and yields. The 2011 winter wheat planted area exceeded the 2010 planted area, but the hot, dry growing season sharply reduced hard red winter (HRW) wheat production. Much better weather in the soft red winter (SRW) wheat growing areas resulted in a near doubling of SRW production from 2010’s poor output. Very wet spring weather and flooding severely delayed spring wheat planting and acreage, causing production to fall from a year earlier. Overall, the 2011 wheat harvest was down nine percent — up slightly for winter wheat but down dramatically for spring wheat. Corn and soybean planting got off to poor starts in 2011, as heavy rains and severe flooding caused planting delays. Heavy snowmelt caused flooding along the upper and middle Mississippi River, while the heavy rains created flooding across the Ohio Valley and Mid-South. Despite the slow start, corn planted acreage was the second highest since 1944, while soybean area was off slightly from 2010. The extremely slow planting pace left corn vulnerable to hot and dry summer weather, yields fell and production was down despite the higher acreage. Soybean production declined eight percent from 2010, affected by wet weather in the spring and fall and hot, dry weather during reproduction. While very strong cotton prices resulted in a 34 percent increase in cotton planted area compared with 2010, drought throughout the south and Hurricane Irene in the east devastated the crop, resulting in 13 percent less production. Key market and policy developments also highlighted 2011. With the global economy slowly recovering from the financial crisis of 2008-09, demand for crops for food, feed, fuel and fiber rose strongly in 2011. Despite an increase in global crop production, highlighted by large production increases for grains in Russia, Ukraine, Kazakhstan, China and Canada, the lower U.S. wheat, corn and soybean production curtailed U.S. exports and contributed to a sharp increase in commodity prices and U.S. farm income. The index of crop prices received by U.S. farmers set a record high in 2011. U.S. net farm income also set a record high, rising 24 percent over 2010. U.S. policy continued to focus on controlling the record Federal budget deficit, which influenced

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

Commitment to Excellence
2011 Year in Review
Farming: Pessimists Need Not Apply
Leadership: NCIS Regional/State Crop Insurance Committees
NCIS Board of Directors
Insect Resistance to Bt: Is it a new threat to crop production?
Another Successful Convention
Adam Vetter Given Outstanding Service Award
Pat Flanagan Given Industry Leadership Award
Step 6-Identifying and Evaluating Alternatives: What alternatives are feasible for the future?
In Memory of John F. Ames

Crop Insurance Today May 2012