Indiana farmers have received more than $1 billion in crop insurance payouts following last year’s drought, more than double the previous record.
“They’re still coming in,” Chris Hurt, Purdue Extension agricultural economist, said of the payouts Friday. About 75 percent of Indiana farmers were covered by crop insurance last year.
As of last Monday, the Indiana payouts had reached $1.08 billion, according to the U.S. Department of Agriculture’s Risk Management Agency. In Dubois County, farmers had received $21.9 million, the 12th-highest countywide total in the state and a county record. The previous county record, set in 2008, was $3.7 million.
The majority of the payouts have covered losses from corn, which was particularly hard hit by the summer drought.
Corn yields averaged 99 bushels per acre in Indiana and were down about 40 percent across the state compared to the predicted 2012 yield of about 162 bushels per acre. The loss was even greater in Dubois County, where corn yielded 62.1 bushels per acre, down 60 percent from the predicted yield.
At the county level, $20.2 million, or 92 percent of the payouts, has been for corn. For each $1 spent in Dubois County on 2012 corn insurance premiums, farmers received $5.68 in payouts.
Indiana corn sales are generating about $700 million less than what Hurt had estimated beforethe drought. Corn payouts have reached $920 million, which should bolster the incomes of insured farmers above pre-drought estimates.
Insured farmers, who constitute three-quarters of the state farming population, have recovered more through insurance than the estimated losses for the entire state.
“The farmers that had crop insurance, they recovered more on average than what their losses were,” Hurt said.
The previous record of payouts for corn, soybeans and wheat was $522 million in 2008. That same year marked the previous record for corn, $269 million, which was less than a third of the 2012 payout. For each $1 that farmers invested in corn insurance premiums in 2012, they have received $3.54 in payouts.
Soybean indemnities accounted for $140.6 million of the payouts as of last Monday. Soybean crops yielded less than expected at the state and county levels, but were not as severe as corn losses.
State soybeans averaged a yield of 43.5 bushels per acre, while Dubois County soybeans yielded 38 bushels per acre. Statewide, farmers received 89 cents for every $1 they invested in soybean insurance. County farmers received $1.3 million in 2012 soybean payouts, a return of 83 cents per dollar invested.
Wheat fared well in 2012, averaging 67 bushels per acre in the state, and 59.8 bushels per acre in Dubois County. These numbers are comparable to yields in the past five years. Wheat payouts were low, $3.6 million in 2012. For every $1 invested in wheat insurance, state farmers saw a 44-cent return. County wheat payouts totaled $10,963, returning 7 cents for every dollar invested.
Insurance offered local farmers a buffer against the 2012 losses, Dubois County Farm Bureau President Terry Hoffman said. Mike Lammers, a crop and cattle farmer in Huntingburg, has never been without crop insurance.
“We don’t ever consider not having it,” he said. Crop insurance is just another expense, he said, like fertilizer or fuel. “You’re exchanging a number that you know for a number that you don’t.”
The more than $1 billion that insurance has injected into the Indiana farming economy will have a major effect, considering state farm income is estimated at $3 billion to $4 billion a year, Hurt said.
“Insurance, basically, has made the state of Indiana whole,” he said.
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