Protecting your profit in 2025

A common phrase we often hear is, “My crop insurance is expensive and doesn’t help when I need it the most.” Inflation and the decline in commodity prices make it increasingly difficult for row-crop producers to make a profit.

Paying more for crop insurance does not seem to make sense. The Risk Management Agency (RMA), along with private insurers, are finding new ways to cover the most important part of your operation: the profit.

The “shallow losses,” or the deductible portion of your crop insurance policy, is essentially your profit. If you insure at a 75% coverage level you are, for lack of better words, “self-insuring” the other 25%, which quantifies as the profit for your operation equaling $200 or more per acre. 

To put that into perspective, it would be like insuring your $400,000 home with a $100,000 deductible. Why would we insure one of our most valuable assets—our growing crop—with such a high deductible?

Producers now have multiple options to help limit this deductible while still making premiums manageable. These products are similar to Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) offered through the Farm Service Agency.

These products include:

•    Supplemental Coverage Option (SCO) — Allows increase of coverage up to 85% against the county average.

•    Enhanced Coverage Option (ECO) — Allows increase of coverage up to 95% against the county average.

•    My Yield (soybeans only) — Uses best yield in the last 10 growing seasons rather than your actual production history to establish coverage. The name may vary by insurance provider.

•    My SCO/ECO — Similar to SCO/ECO above but uses your yields instead of county average. The name may vary by insurance provider.

•    Band Revenue Protection (BRP) — Elect either revenue or yield protection bands of coverage at higher levels.

Many producers choose to insure a crop in a county on an enterprise unit basis, in which all acres of a crop are insured in a county as one field. Many of the programs listed above will allow you to have your base policy insured on an enterprise unit basis and have your claims worked on a per-section basis (optional units), as long as production is kept separate.

If you look back at your crop insurance in recent years, you can see how these types of coverages could have significantly impacted your profitability. Spring planting will be here before you know it. Reviewing your coverages with a knowledgeable crop insurance professional could be more important than ever.    

Cover the inevitable with livestock risk protection

You don’t have to be a commodity trader to know cattle markets are up. Even the dips and dives of the markets don’t show at the sale barn. However, what comes up, must come down.

“High prices cure high prices,” said Nathan Oglesby, cattle producer and grain originator for MFA’s Heart of Missouri group. “Whether it be causality of government actions or a ‘black swan’ event, it’s not if but when it’ll happen.”

Oglesby purchases Livestock Risk Protection (LRP) to cover that inevitability. LRP is designed to insure against declining market prices, allowing producers to choose a variety of classes for cattle (or swine), coverage levels and insurance periods to match when animals would normally be marketed. This also comes with the ability to retain those animals at the end of said insurance period.

“For me it’s no different than forward contracting grain,” said Oglesby, who often insures unborn calves before hooves even hit the ground. “You are setting a price for a future delivery date—in this case, it’s calves. Though Missouri plays a significant role in cattle production in our nation, there is little we do that affects the markets at a global scale. That’s the reason I buy LRP.”

To learn more, contact your livestock crop insurance agent or visit mfa-inc.com/crop-insurance to find an MFA agent near you.

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