Colorado Daily.com
04-08-06
2005 dry spell ended in highest claims since ’93
By Ed Tibbetts
The parched summer of 2005 prompted Quad-City area farmers to claim greater
losses than at any time since 1993, according to federal crop insurance data.
Farmers in Scott and Rock Island counties were paid $4.35 million in insurance
payments after last year’s drought, according to the U.S. Department of
Agriculture. And their losses relative to premium payments were at their highest
level in 12 years.
Scott County farmers received the majority of payments in the Quad-Cities, with
just over $3 million going to the Iowa side of the river.
The insurance data and new county yield figures, the latter released last month,
provide the most comprehensive and localized look at the impact of last year’s
drought.
The dry spell bypassed much of the Midwest but delivered a blow to a good
portion of Illinois and a slice of eastern Iowa, too. Scott County was in that swath
of territory. It saw the average county corn yield dip to 149 bushels per acre,
almost 30 bushels below the five-year average. Clinton County had it much
worse. Its average corn yield was almost 117 bushels an acre, down about 50
bushels an acre from the five-year average.
Beans were down, too, but not as much.
“Our corn crop was cut almost in half,” said Bill Horstmann, who farms about
1,100 acres near Wheatland, Iowa.
Clinton County farmers appeared to have fared the worst in the Quad-City region
in terms of losses. The federal government paid out nearly $8 million in insurance
payments to farmers there, 78 percent more than what farmers paid in premiums.
That’s the worst premium-to-payment ratio in the county since 1993, according to
federal records.
Scott County farmers took in 52 percent more in loss payments than they paid in
premiums last year, also the worst ratio since 1993.
Rock Island County farmers received about $1.3 million, but paid more in
premiums than it got back in claims payments.
In Cedar County, Iowa, the government paid farmers $6.1 million in insurance
payments, 67 percent more than premium payments. In fact, nearly a third of the
crop loss payments in Iowa went to farmers in just four counties: Scott, Clinton,
Cedar and Jackson.
The insurance data don’t even fully reflect the lost income, however. Most farm
insurance policies don’t cover the entire crop. And when the losses farmers take
off the top are thrown in, Scott County probably took a hit of between $7 million
and $8 million, said Craig Rice, director of the U.S. Department of Agriculture’s
risk management agency in St. Paul, Minn. The agency also is in the midst of
reviewing claims for group insurance policies that could add another $1 million in
payments.
Insurers and farmers say the year could have been much worse. Late rains and
newer seed hybrids kept yields from plunging as low as some feared. And Rice
said the losses aren’t extraordinarily high when compared to some states, which
regularly see indemnity payments exceed insurance premiums.
Also, loss ratios in Scott and Clinton counties markedly were higher in 1993 than
they were last year.
Still, prices were low last year, too. And that, coupled with lower yields, has left
some producers in the Quad-City region saying that the dry 2005 will have an
impact on their plans for this year.
Horstmann says he’d planned on buying a field cultivator but will hold off for a
year.
He says his insurance payments helped, but added, “nothing’s better than a real
good crop.”
“It hurt the balance sheets a lot,” said Doug Hoffman, who farms 2,400 acres of
corn and beans northwest of Clarence, Iowa. “It was extremely tough on Cedar
County farmers,” he said.
Others had different experiences.
Darrell Cain, who farms about 1,200 acres with his son south of Lost Nation,
Iowa, said his corn crop was cut in half but insurance helped and he doesn’t
expect many changes to his spending patterns this year.
“We probably fared better than most people did,” he said.
In Scott County, Jeff Boeh, a Bettendorf farmer who works about 2,400 acres,
said his yields were down but not as much as first feared. He added a producer
he knows in the northern part of the county saw dramatically lower yields.
“Our biggest concern is pasture,” he said. Last summer, his farm was depleted
by July.
Some farm experts said last year’s drought highlighted the importance insurance
plays in farming.
“I have a good friend who said you can tell who has good crop insurance and
who does not by their demeanor,” said Virgil Schmitt, crop specialist with
Iowa State University Extension.
Ed Tibbetts can be contacted at (563) 383-2327 or etibbetts@qctimes.com.
TRACK IT ONLINE
The National Drought Mitigation Center located in Lincoln, Neb., with the
assistance of NOAA and the USDA, tracks drought conditions throughout the
United States, compiling the information into an interactive map online.