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Crop Insurance – What You Need to KnowKendall Jones, President & CEO of ProAg
Women In Agribusiness Summit
Minneapolis 2017September 27
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What is Crop Insurance?U.S. Crop Insurance: Three Classes of Business
Public-Private Partnership:
Multiple Peril Crop Insurance (MPCI)• USDA Risk Management Agency (RMA)
Private Products:
Crop Hail• Private program
Named Peril• Private program
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How and why? 1938: Federal Crop Insurance Act Major modifications:
1980 1994 2000
2014: Agricultural Act (Farm Bill)
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U.S. Crop Insurance2016 Gross Premium Breakdown
Named Peril $40M*
Crop Hail$982M
MPCI$9.3B
* EstimatedCrop Hail - Data as January 2017MPCI - Data as of March 2017Source: Crop Hail - National Crop Insurance Services
MPCI – RMA - Summary of Business Report
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Corn$3,684,726,202
(37.75%)
Soybeans $2,106,432,059
(21.58%)
Wheat$1,284,485,112
(13.16%)
Cotton$656,497,774
(6.73%)
All Other$2,166,637,467
(22.21%)
U.S. Crop InsuranceLargest MPCI Premium Crops in 2016
Data as of April 2017Source: RMA – Nationwide Summary by Commodity Report
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Who Pays for It?USDA: Risk Management Agency Program Administration Farmer Premium Subsidy
Expense Load Reinsurance Protection
Private Sector Farmers
Premium Deductibles
Insurance companies take underwriting & operational risk Agents support farmers
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What does it cost?
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U.S. Crop Insurance2011-2016 Cause of Crop MPCI Losses by Peril
Plant Disease
FailedIrrigation
Cold Weather
Other
CommodityPrice Decrease
Hail/Wind
ExcessMoisture
Hot DryWeather
$0.00 $10.00 $20.00 $30.00$ Indemnity (Billions)
49%
23%
9%
7%
5%
5%
2%
1%
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How is the Program Delivered?Successful Public – Private Partnership USDA RMA (Federal Crop Insurance Corporation) Private Companies (ProAg) Independent Agents
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What is the impact?Stability US Economy
Lenders Manufacturers Food Prices Labor Families
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Contact Information
Kendall JonesPresident & CEO ProAg
@kjproagKendall JonesProAg.com/kendalls-blog