Impacted by drought and export disruptions caused by the war in Ukraine, insurance spending for corn versus that for other crops in 2023 grew to its widest-ever gap.
Increases in annual total corn premiums outpaced other highly-insured crops over the past five years. These policy premiums are paid for, in part, by government subsidies, which on average covered 62% of the crop insurance costs for farmers in 2022, according to the Government Accountability Office.
Deadlines to purchase spring-planted crop insurance were one month after the Russian invasion of Ukraine in February 2022. According to data from the Observatory of Economic Complexity, an open-source project for visualizing world economic data, Ukraine was responsible for 9.3% of global corn exports in 2021.
When the Russian invasion closed ports on the Black Sea, world supply of corn and other grain remained stuck at ports for months. Farmers locked in revenue protection policies in the early stages of the war. When Ukraine and Russia struck a deal to reopen Black Sea trade routes in July 2022, corn prices fell as did waning supply pressure.
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