Crop Insurance Means Drought, Not a Disaster

A drought specialist with the national weather service recently compared the drought and heat wave here in the Midwest with the catastrophic dry period of 1988 that, at the time, cost agriculture $78 billion. This year’s weather pattern, which settled into the Great Plains and the Southwest last year and has spread into the Corn Belt, resembles those of a quarter century ago, he noted.

USDA Chief Economist Joe Glauber recently said that “49 percent of the corn crop, 50 percent of the soybean crop and 45 percent of the hay crop are all in areas that are experiencing drought,” adding that a lot of that area actually is in the “severe drought” category. For consumers, this drought could spell higher food prices as food and feed supplies tighten further and global demand continues to rise.

For farmers and ranchers — who in 2011 experienced one of the most disastrous weather years in history — this could mean yet another year of dismal harvests and dashed hopes. Thankfully, the vast majority of U.S. farmers purchase crop insurance policies, which last year covered 84 percent of eligible lands, protecting 266 million acres of crops.