Farmers interested in making changes to federal crop insurance policies must take action soon.
A farm management specialist outlines the different coverage options below.
The sales closing deadline for the spring planted crop is March 15.
“Any farmer wanting to make changes for the 2019 crop year needs to notify his or her crop insurance agent well before Friday’s deadline,” Iowa State University Extension & Outreach farm management specialist Steve Johnson said. “Or, you have the same type of coverage, level of coverage and same supplemental products as you did in 2018.”
Legislators made few changes to crop insurance for 2019.
Johnson says farmers will make similar decisions as years past.
“Revenue Protection, of course, is the product farmers select most because it guarantees revenue,” Johnson said. “It takes your actual production history, multiples it by the level of coverage you use, which tends to be somewhere between 65- and 85-percent, and (then) multiples it by what we call the spring price, or simple average.”
The simple average for December corn futures came to $4, while the simple average for November soybean futures came in at $9.54.
Johnson reminds producers, “Revenue Protection guarantees revenue, and should there be a shortfall of revenue, farmers can collect an indemnity payment in the late fall/winter.”
Farmers can also choose to utilize the Supplemental Coverage Option (SCO).
The Supplemental Coverage Option was created under the 2014 Farm Bill. Farmers choosing this newer coverage opportunity must also elect and enroll in the Price Loss Coverage (PLC) program within the same year.
“We’re going to see farmers with a lot of interest in supplemental coverage option. It’s going to be a supplement to the existing Revenue Protection they already take, but they don’t have to take Revenue Protection at as high of level,” Johnson said. “We’re seeing a lot of interesting plays with crop insurance. If you go from 85- to 80-percent RP, then you can buy the SCO product, and in most cases, save around $2 to $4 per acre of corn.”
Farmers also can utilize unsubsidized supplemental products.
“There are supplemental products that aren’t subsidized – Things like hail, wind and green snap. Farmers can buy up the price, the simple average and buy up the Revenue Protection above the 85-percent level. So there are other types of supplements,” Johnson said. “That’s where I think most farmers will be focused right now.”