Federal Crop Insurance Changes Good for Producers

Two major changes are coming to federal crop insurance. There are two major changes to federal crop insurance. While coverage is typically based on county-level yields and revenue, producers can now add supplemental options, including a new margin coverage product. Doug Yoder, agency manager with Country Financial, explains why this added layer of protection could be important for managing risk.

“For example, for 80 and 85% crop insurance coverages, the subsidies have increased 3% which means their bills will be 3% cheaper. For 70 and 75% coverage levels, those subsidy levels increased 5%, so even more meaningful, and then so on for other coverage levels as well.”

Yoder says, barring market commodity prices, subsidies will pick up a bigger portion of the crop insurance, which is good news for producers.

“What we call the supplementary coverages. Federal crop insurance has a limit, has a maximum that farmers can buy. 85% coverage level is the most they can buy on their personal coverage for their farms, that leaves them a 15% deductible. That means they have to lose 15% let's say, of their revenue before that policy kicks in with a possible claim. Eco came out in 2021, where it helps them stack coverage on top of that base coverage if they want, and they can choose either 90 or 95% coverage. Now this is county coverage on top of their personal coverage.”

Yoder says this crop insurance can be purchased for a significantly lower price.