The wet weather, extremely unstable weather, drought and flooding that has occurred throughout the nation, especially the Mississippi River drainage basin, has resulted in damage to this year's crops that will result in a high volume of crop insurance claims.
“Underpinning the vast majority of these crops is crop insurance, which according to estimates would be written for at least $110 billion worth of crop insurance liability this year, the largest amount in U.S. history,” the National Crop Insurance Services announced.
In 2010, nearly 80 percent of the U.S. crop—256 million acres of farmland—were protected by crop insurance, and total acres for 2011 will be greater when all the calculations are completed.
“The advantage of protecting our farmers with crop insurance is that when Mother Nature strikes as she is doing this year, it is private industry working with USDA to ensure that we maintain financial stability for our agricultural production sector, " said Tom Zacharias, NCIS president.
“The crop insurance industry is deeply concerned about the recent flooding situations and damage to this year's crop. At this time, it is too early to tell how severe the damage will be, but in partnership with USDA, the industry stands ready to assist insured farmers in assessing the damage to their crops and farmland,” said Zacharias. “The federal crop insurance program is designed to provide protection for farmers affected by natural disasters, which unfortunately occur in the unpredictable and volatile business of agricultural production,” he added.
Even though there were changes to the private, USDA relationship for crop insurance in 2011. Farmers saw fit to buy crop insurance, and it is really going to pay off this year from all early indications.