The financial losses to US farmers from this year’s devastating drought may be deeper than some corporates have prepared for, thanks to a failure among growers in worst-hit areas to take out crop insurance.
Some 30-35% of corn in Illinois and Indiana, where crops have been particularly hard hit by drought, is not covered by insurance, analysis of official data by broker Allendale showed.
The two states account for 19.2m acres of corn sowings this year, or 20% of the US total, according to the US Department of Agriculture.
While some other farmers are covered by revenue protection policies, “the takeaway from this information is that the agricultural community will likely have some dark spots in the months ahead”, Paul Georgy, the Allendale president, said.
“There will be bankruptcies” among farmers, he said, with the potential even for insured growers to suffer significant hardship if the corn rally crumbles over coming weeks, with the monthly average value in October used as a basis for payouts.
Read more at Agrimoney