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\ 1 I \ I I I I I II I I I I I I I 1 I FOREWORD We've come to the end our 24th consecutive season and find there is good reason for optimism: 1998 was the second straight year in which very low cropchail damage occurred in the WKWMP, especially in Northwest Kansas. The main reasons for the low damage appears to be due to the combination of having fewer big storm days in June and a relatively large fleet of aircraft available for seeding duties as might be needed to prevent hail on any given storm. Amazing stories of crop yields have been circulated about wheat and com yields this year. Western Kansas led the State in year-to-year increases in crop yields in both crops. We hope the increased yields can help make up for the poor market prices. Significant divergences in some of the crop-hail insurance statistics began showing up in crop-hail damage data forNW Kansas as early as 1997, the end of its first season participating in the WKWMP. Important divergences began appearing within that 1997 data which appear to have widened even further this year. These indicators could be signaling that insurance rate cuts may happen sooner rather than later. We have no way of knowing when, or if, crop insurance rate cuts ever will be made, however, the abnormally large spread now appearing between the dollar amount of crop losses and the dollar amount of premiums charged can only exert extreme pressure over time if insurance companies are at all competitive for reinsurance business and if the trend to below-average crop damage can be sustained. In the southern part ofthe target area, located in West Central and Southwest Kansas, it appears that crop losses decreased below 1997 levels. It is likely that' official' results, when available next spring, will be significant. Crop-hail insurance costs between 1985 and 1997 dropped by about 17% for the 13-county area comprising the original WKWMP target area. This figure waS'found by calculating the premium-to-liability ratio in.1985 and in 1997. Calculating the difference in what costs would be if the same rates were charged in 1997 as they were in 1985, we found an approximate $2.1 million savings for that 13-county area just in 1997. These are not inflation-adjusted numbers. Although only a small part of each of the Eastern Colorado counties of Yuma, Kit Carson and Cheyenne are" demonstration areas," they all are considered to be pans of our official target area. We think that significant hail reduction also has been realized both inside the demonstrations areas and over larger areas surrounding them in each of the counties. More will be known when official data are released ,next spring.