* High market corn, soybean prices encourage large 2013
* Cotton plantings to fall to 4-year low
* Crop insurance a target for congressional cost-cutters
By Charles Abbott
WASHINGTON, Feb 5 U.S. farmers will plant huge
amounts corn and soybeans this year, producing a record corn
crop and ending three years of razor-thin supplies barring
weather problems, the U.S. Congressional Budget Office projected
The CBO projected a corn crop of 14.454 billion bushels,
which would be the biggest ever, and a soybean crop of 3.306
billion bushels, the third-largest on record.
The projections assume a return to normal weather and higher
yields despite the lingering effects of the 2012 drought - the
worst in 56 years.
Growers, meanwhile, will collect a record $16 billion in
crop insurance indemnities for 2012 losses, CBO estimated in
documents that forecast spending by the Agriculture Department
and the rest of the federal government.
Crop insurers would lose $5 billion on their 2012 policies,
the first money-losing year in a decade.
U.S. corn and soybean production has fallen for three years
in a row, mostly because of poor weather, while heavy demand
propelled commodity prices to record highs.
Growers were expected to respond to the continued high
prices by planting 97 million acres of corn and 77 million acres
of soybeans, similar to last spring.
Wheat sowings would drop slightly from 2012, the CBO said,
while cotton plantings would shrink to the smallest in four
years, reflecting current weak prices.
CROP INSURANCE IS BIGGEST STRAND IN SAFETY NET
A 14-billion-bushel U.S. corn crop would rise by about
one-third from last year and would help rebuild U.S. stockpiles
while promoting large increases in livestock feeding, exports
and industrial use, including the production of ethanol.
Next week, the Agriculture Department will release its first
projections for this year's U.S. crops.
The USDA's initial forecasts will be based on conditions in
late 2012 and will be updated in late February. The first
survey-based estimates of plantings will be issued by the agency
at the end of March.
The federally subsidized crop insurance program has become
the biggest strand in the farm safety net, estimated at $8.7
billion a year over the next decade. The government pays 62
cents of each $1 in premium, pays part of the overhead costs of
insurers and bears part of the losses.
Top agricultural economists contend that the insurance
industry increasingly will need to craft arguments that resonate
with the general public, because of proposals in Congress to
reduce federal spending on crop insurance.
The Senate voted last year to make big farmers pay more for
insurance, but the idea died at the end of 2012.
As of Monday insurers had paid out a record $13.7 billion on
crop insurance policies for the 2012 crop.