Crop insurance premiums will likely rise due to flooding

Posted by IronPlanet on Dec 15, 2011 4:18:00 AM

Farmers depend almost entirely on their crops in order to turn a profit, so it can be disastrous if the planting is ruined by a natural disaster or similar event. This year, thousands of farmers were affected by serious flooding along the Missouri River, which was caused when the U.S. Army Corps of Engineers were forced to blow up levees at certain reservoirs to prevent those areas from becoming flooded. Instead, that water traveled downstream and flooded thousands of acres of farmland all through the Midwest.

Fortunately, this is why farmers carry crop insurance - to ensure they still get paid even if their crop is ruined. More than $114 million was paid out last year due to flooding, reports Bloomberg. Unfortunately, this means that insurance premiums will likely rise sharply for next year, much to the chagrin of many farmers.

"You are going to blow my levee up and then you are going to turn around and take more money from me for insurance because I don't have a levee because you all blew it up," corn farmer Ed Marshall told Bloomberg. "There is nothing right about that in my opinion."

Those who expect higher premiums next year can offset the rising cost by bidding on used agricultural equipment from IronPlanet. A wide range of fully-inspected vehicles and equipment are available, and buyers can usually save big compared to buying the item new.

Topics: Industry Headlines