NU Online News Service, July 5, 2:24 p.mEDT

WASHINGTON—Signs are emerging that severe temperaturesand lack of rain may cause steep losses in the Midwest's corn crop,but insurers remain hopeful that beneficial rains will fall andhelp crops in troubled areas of the country.

The potential for severe losses is ironic because the earlypredictions from the Department of Agriculture was that this yearwould result in the largest corn crop in many, many years.

Laurie Langstraat, a spokesman for the National Crop InsuranceServices in Overland Park, Kan., which represents the nation's cropinsurers, cautioned that it is premature to predict a devastatingseason for Midwest corn farmers and the crop insuranceindustry.

“It's too early to tell,” she says. “In some areas, likeIndiana, the corn crop isn't doing very well.” However, in otherareas, like Minnesota, North Dakota, South Dakota and Iowa, “it'snot too bad yet,” she notes.

At the same time, she says, “the crop insurance industry isstanding ready and will handle 2012 losses from drought just asthey did from the losses due to flooding in 2011.”

One of the issues raised is that some farmers don't purchasecrop insurance.

Langstraat said that nationwide, approximately 83 percent of theinsurable acres are covered by crop insurance.

She says it is impossible to estimate the number of farmersinvolved because many have more than one policy in force becausethey grow different crops.

It is also impossible to estimate average crop insurance costsbecause these vary by county and by the level of coverage and pricefarmers choose, she says.

Langstraat says that currently, there are 16 approved cropinsurance providers.

A USDA official, who declined to be quoted by name because ofagency policy, says the USDA is getting sporadic reports ofproblems in the Midwest, “but we don't know the extent of theproblem.”

Moreover, “we won't be able to get a fullhandle until the crop insurers, who deal directly with the farmerson this issue, report to us,” says the official.

At the same time, the July 1 USDA crop report paints a troublingpicture for certain states.

The report says that in the following states, farmers projecteither very poor or poor corn crop yields this year:

• In Colorado—15 percent project a “very poor” crop; 21 percentproject a “poor” crop, and 30 percent a “fair” crop.

• In Indiana—19 percent project a “very poor” crop, and 31percent project a “poor” crop.

• In Kentucky—19 percent project a “very poor” crop, and 29percent a “poor” crop.

• In Tennessee—18 percent project a “very poor” crop; 29 percenta “poor” crop, and 34 percent a “fair” crop.

• In Kansas, 10 percent project a “very poor” crop; 21 percentproject a “poor” crop, and 43 percent project a “fair” crop.

Illinois and Missouri farmers project similar concerns as theothers.

However, the USDA data indicates that 63 percent of Minnesotafarmers project a “good” crop.

Confirming the NCIS call for caution, the USDA said in itsreport that of 18 selected states participating in its survey, only7 percent of farmers overall report dire conditions, 16 report“poor” conditions, 26 percent report “fair” conditions and 40percent report “good' conditions for their farm crops.