Feds name much of Wheat Belt as disaster area, but record crop insurance payouts relieve the pain

The U.S. Department of Agriculture declared much of the central and southern Wheat Belt a natural disaster zone yesterday because of persistent drought that threatens this winter's wheat harvest. Large portions of Kansas, Colorado, Oklahoma and Texas are now eligible for low-interest emergency loans. (Indiana Grain Co. photo)

The USDA listed 597 counties in 14 states as natural disaster areas, Charles Abbott of Reuters reports. More than half of those counties are in the Wheat Belt, which runs from Texas to North Dakota. All but one of Oklahoma's 77 counties were listed, as well as 88 of Kansas' 108 counties, 30 of 64 in Colorado and 157 of 245 in Texas. Disaster areas were also declared in Alabama, Arkansas, Arizona, Georgia, Hawaii, Missouri, New Mexico, Nevada, South Carolina and Utah.

Farmers will collect record amounts of crop insurance for losses in 2012 crops. Payments totaled $10.8 billion at the start of this week, up by $670 million from last week, and just short of a record payout of $10.8 billion paid on 2011 losses, Abbott notes. Some analysts say payouts will reach $20 to $25 billion, making 2012 the first losing year for insurers in 10 years. Crop condition ratings for winter wheat were the worst on record in early December. (Read more)