2012 corn yields suffered significantly from drought
Group Risk Income Plan with the Harvest Revenue IGRIP-HR) is the most used county level insurance product, with most individuals taking the policy at the 90% coverage level. With the release of county yield data, reasonable estimates of GRIP-HR estimates can be made. Figure 3 shows GRIP-HR estimates at the 90% coverage level and the 100% protection level. The 100% protection level is the highest protection level. Farmers can choose a lower protection level. If farmers choose a 60% protection level, the lowest protection level, the payments would be 60% of those shown in Figure 3.
Many counties in southern Illinois, and several counties in central Illinois, have estimated payments over $1000 per acre. This would be an expected outcome in a drought year for a product with the harvest price increase. Lower yield trigger payments that are then paid at the higher harvest price.
Note that there are several counties that have blanks in Figure 3. There were a number of counties that have GRIP policies for which NASS did not report county production data: Boone, Clay, Lawrence, Jefferson, Rock Island, Massac Counties. It remains to be seen how RMA will determine GRIP-HR payments in these counties.
Fewer counties had GRIP-HR payments (see Figure 4). For those counties having payments, GRIP-HR payments were lower than for corn. These lower payments reflect the fact that soybean yields were less impacted by the drought compared to corn yields.
Corn yields were low over much of Illinois, with the lowest yields occurring in southern Illinois. As a result of low yields, GRIP-HR will make payments in most Illinois counties. Soybeans yields were not as low as corn yields. Fewer counties will have GRIP-HR payments.