Updated: Thursday, 23 Aug 2012, 8:15 PM EDT
Published : Thursday, 23 Aug 2012, 8:15 PM EDT
WHEATLAND, IND. (WTHI) - The drought of 2012 is quickly becoming one for the books.
For companies that write crop insurance policies it may turn into a record hit on their pocketbooks.
Officials are already estimating the drought will result in billions of dollars in payouts to farmers.
The insurance may well soften the blow of a year that has turned into a disaster.
The long summer of 2012 is drawing to a close.
The crops battered by a drought that is worse than anyone can remember.
Farmers are already figuring their losses and turning in claims on their crop insurance.
"For us it will be the difference between a pretty significant loss and at least being able to recover our costs," said Knox County farmer Dennis Carnahan. "So, that's a pretty big benefit for us."
No one knows yet exactly how much the crop insurance will be paying out in losses, but estimates are placing it between $5-and-10-billion nationally.
During the drought of 1988 about 20 percent of Indiana farmers had crop insurance.
This year it's closer to 80 percent, and there is a reason for that.
"Our costs are so high anymore," said Carnahan. "There's so much at stake every year that we can't afford to not have, be indemnefied against a bad weather loss."
This bad weather loss is still going to wind up hurting farmers financially, but the insurance is keeping it from becoming a industry busting catastrophe.
"It would change the face of the operation," said Carnahan. "A lot of people wouldn't have been able to continue after a year like this."
The risk management on the farm that led so many farmers to purchase the insurance may well make it so that many will be able to continue to put in crops and try again next year.
Insurance officials say the largest payouts will be in Indiana, Illinois, Missouri, Kansas, Kentucky and Tennessee.
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