Crop insurance payouts pushing premiums higher in 2024

Producers can expect to see higher crop insurance premiums for the 2024 crop year. The increase is mainly due to losses in 2021 and 2022.

“This year, we’re seeing the consequences of 2021 and 2022 conditions and the related losses,” explained Darryl Kay, Agriculture Financial Services (AFSC) chief executive officer.  “As many producers are aware, 2021 saw historic claim payments and that had an impact on both the insurance fund balance and individual producer’s experience, which translates into higher premiums.

“We’re not trying to recover recent losses in a short period of time; rather, our premium framework takes a longer-term, 25-year approach. This longer view means greater premium predictability and stability for our clients.”

Commodity prices, one of the bigger drivers of recent premium increases, appear to have plateaued and have even decreased for most crops. Price-driven increases to premiums are not expected for many crops in 2024, except durum wheat and most pulse crops. Markets are difficult to predict so this expectation could change and will depend on what the market does for individual commodities.

Loss experience is the largest expected driver of premium increases for 2024.