2011 Crop Insurance Claims Payments Could Impact Regional Insurers
National Crop Insurance Services (NCIS) says indemnity payments surpassed $9 billion for the first time in history in 2011, and Moody’s Investors Service says this development could put smaller, geographically concentrated insurers at risk.
NCIS cites historic droughts in the Plains, flooding along the Mississippi River and deep freezes in the South for the $9.1 billion in payments, and says the figure could grow to $10 billion as remaining claims are settled.
Tom Zacharias, president of NCIS, says in a statement, “Thanks to the foresight of Congress, crop insurance has been in place to weather enormous natural disasters and help ensure that farmers survive to plant yet another year. Those billions in damages would have landed on the plates of input suppliers, lenders, marketers and farm families if crop insurance wasn’t in place.”
Moody’s says, “We expect that the industry-wide combined ratio for 2011 will come in below 100.... However,” Moody’s adds, “it will be significantly weaker than in 2010, a banner year, and perhaps more in line with the more loss-intensive 2008 and 2009.”
Moody’s also says losses will vary considerably by group. While larger, nationally diversified insurers should benefit from profits earned in less-affected states and regions, smaller insurers that focus on single states and regions could see combined ratios over 100, especially since many of these smaller insurers operate in central and Midwest states. (source: Phil Gusman, PropertyCasualty360.com)
Genetically Modified Food Safe, Animal Study Suggests
A three year feeding study has shown no adverse health effects in pigs fed genetically modified (GM) maize. The maize, which is a Bt-maize bred for its insect resistant properties, was sourced from Spain.
The results were one of the key findings of trials conducted as part of the GMSAFOOD consortium undertaking post market monitoring: long term, generational and food chain studies to test food safety.
The research team conducted short-term (31 days), medium-term (110 days) and generational pig feeding studies where the health of piglets of sows fed Bt-maize is measured. No adverse effects were observed, suggesting that feeding Bt-maize to pigs of different ages is safe.
The GMSAFOOD consortium, funded by the European Commission, brings together researchers from
Austria, Ireland, Norway, Hungary, Turkey and Australia. (source: sciencedaily.com)
Ag Secretary Calls USDA Budget Stable
During a press call Secretary of Agriculture Tom Vilsack outlined the ramifications of the budget put forth by President Obama on the USDA. He told reporters that all in the appropriations process have recognized that USDA has done and will continue to do quite a bit for deficit reduction. According to Vilsack the budget is a stable one with… the amount in the discretionary budget roughly the same as in 2011.
Vilsack says that during the past two years not only has USDA seen reduction in discretionary funds but also an effort on their part in terms of mandatory programs, particularly in conservation and savings due to renegotiating a new standard for crop insurance. He says they expect additional savings once Congress passes a new farm bill.
"There are obviously tradeoffs in a budget that is stable," Vilsack said. "All told there is somewhere in the neighborhood of about 30 programs that are impacted or affected either by being eliminated or by being reduced, which is consistent with the tough choices and tough call that have to be made."
Vilsack says that the savings will allow USDA to avoid furloughs and layoffs and continue to grow the economy of rural America. (source: farmfutures.com)