The Federal crop insurance program saw indemnities exceed premiums by $2.5 billion in the 1980's, a decade of widespread drought and rapid growth in insurance participation. This excess loss, after small surpluses for most of the Federal Crop Insurance Corporation's history, masks the wide variation in performance among crops and regions. More than half of program excess losses were for soybeans (mostly those produced in Arkansas, Georgia, Louisiana, and Mississippi) and wheat (mostly that produced in Montana and North Dakota). An alternative method of crop insurance, with payments based on yield losses in a geographic area rather than those experienced by individual producers, may help to reduce excess losses. A pilot program using such a method is being tested for soybeans.