Crop Insurance Today - 5

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2016 The Year in Review
By Mechel Paggi, Frank Schnapp, and Laurence Crane, NCIS

Overview

The 2016 year saw a return to generally favorable growing conditions and record yields for
corn and soybeans, accompanied by fewer losses
and more positive returns. Only seven states had
loss ratios greater than 1.0. Total indemnities for
these states added up to $556 million, 16 percent of the total payout. This reflects a welcomed
change from recent years where drought and other extreme weather events drove up indemnities
to historic highs. The year-over-year variability of
the returns is a reminder of the risk assumed by
crop insurance providers in delivering this essential safety net for American farmers.
While the winter began with mostly wet and
warm conditions, there were some extreme cold
weather events as well. A late December blizzard
on the southern High Plains was responsible for
a catastrophic loss of livestock, and a late January blizzard raged across the Mid-Atlantic States
with snowfall reaching the interior of the Southeast. A February warming trend was followed by
a warm, wet spring covering much of the country,
but there were some exceptions, with cold weather resulting in some losses among fruit and ornamental crop production in the Northeastern and
Mid-Atlantic States. Other exceptions included
dry conditions that occurred in the Northeast,
the Pacific Northwest and the interior Southeast.
The Midwest was free of drought at the end of
May, but also saw a late-spring drying trend in
many areas. On the West Coast, the northern
part of California experienced heavy precipitation during the first half of March, further easing long-term drought. Conversely, the southern
part of the state remained mostly dry.
Favorable conditions signaled the start of early-season corn planting. By April 17, 13 percent

of the nation's corn crop was planted, six percent
ahead of 2015 and five percent above the five-year
average. Cotton crop plantings got off to a slow
start, soybean plantings progressed slower than
2015, and 2016 spring wheat plantings started
out three percent ahead of the five-year average.
The USDA Crop Production 2016 Summary
reported 319.3 million acres planted to principal
crops, up slightly from 2015. Lower input prices
provided support for corn relative to other crops.
Increased corn acreage and lower price expectations helped keep soybean acres in check, nevertheless, 2016 remains the highest number of soybean acres planted in the United States. Plantings
of other oilseeds were mostly down from last year
with decreases in area planted to canola, sunflower, flaxseed, and safflower.
Other crops experienced an increase in planted acreage. Peanuts acres continued to trend upward, as did the area planted to rice up 22 percent
from 2015. The area planted to cotton rebounded
to 10.1 million acres.
During the summer most of the mid-section
of the country experienced warm, wet conditions
through August. In the eastern and western parts
of the United States, drier than normal and hot
temperatures prevailed. In the Midwest, favorable summer weather characterized by showers and lack of extreme heat provided excellent
growing conditions for corn and soybeans.
In the South, excessive rainfall created flooding and crop damage in parts of Louisiana and
quality issues for some crops (sorghum, rice, and
soybeans) in other Southern states. At the same
time the worst drought in over ten years, along
with above average temperatures, plagued parts
of the Northeast and the interior Southeast states.
In the West, while the drought faced by CaliforCROPINSURANCE TODAY®

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