Crop insurance will cover massive losses
In spite of the depth and far-reaching impact of the drought that has gripped more than half of the nation’s agricultural production area this summer, farmers should have no worries regarding their crop insurance policy’s ability to pay.
“The crop insurance industry is on the ground in the drought-stricken areas, mobilizing loss-adjuster teams,” says Thomas P. Zacharias, president, National Crop Insurance Services in a statement released today.
“Farmers can be assured their claims will be paid, and that the companies will move as quickly and as efficiently as possible, given the expected volume of claims, to assess damages and get indemnity checks into the hands of farmers,” Zacharias says.
Claim volume will be huge. Recent USDA crop report estimates indicated significant losses for corn and soybeans, result of the heat stress and extreme drought that covers much of the Corn Belt.
“Although this was the largest corn crop planted since 1937, production is projected to be down 13 percent, the lowest output since 2006,” Zacharias says. “Corn yields are expected to average 123.4 bushels per acre, down nearly 24 bushels from last year, which would be the lowest average yield since 1995. Soybean production is forecast to be down by 12 percent from last year, and if realized, would have the lowest average yield since 2003.”
Zacharias says most farmers in drought-stressed areas are covered by crop insurance.
“Some farmers in these affected areas have purchased crop insurance policies for years and have never collected an indemnity. This year, their decision to purchase crop insurance confirms their practice of sound risk management.”