Crop Insurance Today June 2018 - 5

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2017: The Year in Review
By Mechel Paggi, Frank Schnapp, and Laurence Crane, NCIS

OVERVIEW

The risky nature of agriculture and the effectiveness of Federal crop insurance were both
on full display again in 2017. While some areas
experienced favorable growing conditions, there
were areas of distress-severe drought in the Upper Plains, wildfires in and flooding in the West,
and hurricanes along the Gulf Coast.
The year began with an unusually warm and
wet winter for most of the country except for the
northwest that experienced periods of extreme
cold and parts of the Central and Southern Plains
where below average precipitation resulted in
continued drought conditions. The wet weather
continued into the spring, with excess moisture
in some areas experiencing flooding conditions
that delayed planting. The slow start to plantings
for major crops was short lived as warm April
temperatures allowed plantings to recover to at
or near their five-year average pace except for
spring wheat. For the second year in a row by the
end of the season the area planted to principle
crops was just over 319 million acres.
The production of most major commodities
was down from last year except for soybeans and
cotton. Wheat production was significantly lower
than in 2016 due to poor growing conditions and
declining plantings. A combination of smaller
acreage and reduced yields resulted in record low
production of barley and the largest reductions
in year-to-year sorghum production since 2006.
Corn production fell below the previous year as
increased yields failed to overcome the reduction
in planted acres. In contrast, increased planted area of soybeans more than offset somewhat
lower average yields resulting in 2017 production
exceeding the previous year. Cotton production
exceeded the previous year despite severe weath-

Figure 1 Wintertime La Niña Patterns

https://www.climate.gov/news-features/blogs/enso/what-expect-winter-noaa%E2%80%99s-2016-17-winter-outlook

er challenges in some areas, as favorable growing
conditions in major cotton production regions
resulted in increased average yields on a greater
number of planted acres.
The crop insurance industry continued to
recover from the 2012-2013 period with a gross
loss ratio of 0.50, though this value is expected to
increase due to remaining open claims. The state
with the largest dollar loss in 2017 was Texas in
part due to extensive crop damage in the coastal
areas of the state due to hurricane Harvey. North
Dakota, South Dakota, Kansas, and California
were the other states with the largest volumes of
losses attributed to drought, hail, heat, and excess

moisture. There were five states with loss ratios
above 1.0 accounting for $561 million, 11 percent, of total loss payments for 2017.
As in the past, this annual review provides
an accounting of the 2017 crop year that covers
events that had an impact on the industry. A discussion of the year's weather and how it impacted crop production, an overview of commodity
market developments and prices, a breakdown of
the federal crop insurance program performance,
highlights of developments in RMA policies and
programs and a look at the crop-hail business in
the U.S. and Canada are provided. In the face
of continuing depressed farm income and an
CROPINSURANCE TODAY®

http://www.ag-risk.org https://www.climate.gov/news-features/blogs/enso/what-expect-winter-noaa%E2%80%99s-2016-17-winter-outlook

Table of Contents for the Digital Edition of Crop Insurance Today June 2018