Burgeoning corn production in the U.S. hit historic levels last summer, despite record drought—but will it help reshape the future of the federal crop insurance system? Some experts say it could, as corn commands a huge percentage of the Federal Crop Insurance Corp. (FCIC), the government reinsurance arm that backs U.S. crop insurers against major losses.
Corn represents the biggest acreage area of the FCIC insurance program, which in 2012 insured about 282 million acres; 97 million of those acres were dedicated to corn. According to the Department of Agriculture and Consumer Economics at the University of Illinois, Urbana-Champaign, corn acreage has increased 24 percent since 2006, when 78 million acres were harvested.
That's partly due to the fact that the FCIC has allowed more corn acreage into production in recent years, widening the Corn Belt into nontraditional fringe states and giving farmers more confidence in their projected acreage production, says Bob Utterback, president and CEO of Utterback Marketing Services Inc., a commodities brokerage firm in New Richmond, Ind.
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