Here’s a rundown on the changes of keenest interest to insurance advisors...
Dec. 22--The difficulty for farmers and ranchers in 2012 was many times more than it was in recent years -- so, too, was the need for a safety net.
That was evident last week when Mike Freeman, owner of J-9 Crop Insurance in Ault, reported that his customers will receive more than $5.5 million in crop insurance indemnities to cover their agricultural losses this year.
J-9 Crop Insurance, which covers approximately 500 farming and ranching customers, has paid less than $2 million in claims to its customers in each of the previous years, Freeman said.
"No doubt it was a challenging year, and certainly not just here," Freeman said.
Producers everywhere have filed insurance claims in record numbers after this year's historic drought and heat waves burned up crops across the U.S.
National Crop Insurance Services announced this week crop insurance indemnities had reached $8.7 billion so far for this year.
Experts, including officials with the U.S. Department of Agriculture, are expecting crop insurance claims to reach $15-16 billion this year -- more than any other year by far.
G.A. Barnaby -- a Kansas State University Extension specialist, referred to by Colorado State University faculty as one of the nation's leading experts on crop insurance -- said the underwriting losses on this year's claims could amount to about $5-6 billion.
It would mark the first nationwide underwriting loss on crop-insurance claims in about a decade, he added.
In 2011, for the first time in history, Barnaby said, there were more than $10 billion in insurance claims nationwide, but, with about $11.5 billion collected in premiums, there was an underwriting gain in the end.
While the 2012 numbers look to be record-breaking, they're not as high as had been predicted earlier in the year.
In a phone interview two months ago, Barnaby said he expected about $25 billion in crop insurance claims to be filed by growers across the nation for their 2012 losses.
Some experts in the summer were predicting as much as $40 billion in claims.
Barnaby said the adjustment in forecasts is due to crop prices falling to lower levels in the fall than had been expected, as well as rains in the Midwest that helped crops recover, at least to a point where some growers couldn't claim losses.
Producers either have or will soon be receiving their crop insurance indemnity checks -- needed to buy inputs for the next growing season, which will hopefully go better than the last, local farmers said.
In agriculturally-diverse Weld County, Freeman said claims were made on a wide array of crops this year, with most farmers reserving their limited water for more valuable crops, like sugar beets and onions, and letting their corn and beans go dry if irrigation resources came up short.
Some farmers, like Jeff Anderson, who grows near Eaton, also endured a hail storm that rolled through the area in June and wiped some acreage.
"Every year, you deal with challenges ... but this year there seemed to be more than in others," he said. "It's nice to have insurance to make up for some of those losses, and to help get you started on the next year.
"But you'd definitely rather be growing a crop. Generally, if you're collecting an insurance check, you're losing some money."
No doubt it was a challenging year, and certainly not just here.
-- Mike Freeman,
owner of J-9 Crop Insurance
(c)2012 the Greeley Tribune (Greeley, Colo.)
Visit the Greeley Tribune (Greeley, Colo.) at www.greeleytribune.com
Distributed by MCT Information Services