Gro Indices Signal Jump in Crop Insurance Claims

03 September 2021

Federal crop insurance claims are likely to spike this year as farmers face a barrage of environmental disasters, from flooded crop fields in the wake of Hurricane Ida to scorched plants in the drought-hit West. A variety of Gro indices can provide early signals of which counties are likely to see the greatest crop insurance claims and their potential costs. 

Gro recently added to its platform the USDA’s Risk Management Agency (RMA) Cause of Loss report, which gives detailed insight into where and why crops were lost. The data set, which updates weekly, breaks down claims by cause, such as hurricane, flood, and drought, and provides the number of acres affected and payouts. 

A Gro analysis shows that indices such as the Gro Drought Index and rainfall and soil-moisture analytics can serve as leading indicators of RMA insurance claims, which don’t get recorded until they are confirmed by crop insurance adjusters. Some indemnified acres aren’t reported until after harvest, when the loss can be fully evaluated.

In the latest disaster sure to spur insurance claims, Ida made landfall in Louisiana as a category 4 hurricane earlier this week. In addition to destroying homes and businesses and causing widespread power outages, Ida inundated fields of sugarcane, cotton, and soybeans in Louisiana and Mississippi, as Gro highlighted in this Insight article

RMA claims jumped after earlier flooding events, as can seen in this display showing eastern South Dakota. In 2019, excessive precipitation in South Dakota’s Beadle County led to a sharp jump in indemnified claims for corn acres lost and prevent plant in May and June.

Gro’s Drought Index (GDI) also provides early signals of local crop indemnities. In Washington state’s Whitman County, a big wheat producer, drought conditions have historically preceded wheat indemnities, including $27 million in payouts in 2014-15. 

Wheat-growing areas in Washington state are at record severity this year, as seen at top right of this display weighted for wheat from Gro’s Navigator for Agriculture app. Gro expects drought indemnity records will rise rapidly as insurance adjusters submit reports to the USDA. In just Whitman County, wheat area indemnified due to drought has risen from 1,633 acres to 42,777 acres since Aug. 6. 

A similar pattern is unfolding in the upper Corn Belt and Western US. This display showing Cass County, North Dakota, one of the state’s top producers of corn and soybeans, indicates substantial drought damage to crops will lead to a sharp rise in insurance claims in coming weeks. 

This insight was powered by the Gro platform, which enables better and faster decisions about factors affecting the entire global agricultural ecosystem. Gro organizes over 40,000 datasets from sources around the world into a unified ontology, which allows users to derive valuable insights such as this one. You can explore the data available on Gro with a free account, or please get in touch if you would like to learn more about a specific crop, region, or business issue.

 

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