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FBN Insurance

FBN Insurance

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Jun 07, 2022

by FBN Insurance

If you are a livestock producer concerned about drought this year, learn more about Annual Forage policies from Insurance Sales Director, Don Moody and Agent, Roger Givens. This 30 minute webinar walks you through the details the Annual Forage program and who qualifies. Available In: Colorado Nebraska New Mexico North Dakota Oklahoma South Dakota Texas What you'll learn What is annual forage? Why choose annual forage? Availability & eligibility Sales closing Dual use option Q&A Watch now Learn more To speak to an agent about drought protection, please call 877-204-4645 or learn more by visiting our annual forage page .


Apr 18, 2022

by FBN Insurance

If your operation is in a region prone to hail storms or you grow crops that are particularly vulnerable to damage from hail and/or wind, you may want to consider adding a crop-hail insurance policy to your existing Multi-Peril Crop Insurance (MPCI) coverage. Tune into our free, pre-recorded webinar to hear Eric Sorensen, Director of Crop Insurance, and Frank Newell, Director of Sales, cover the basics of crop-hail insurance and how it can help you cover opportunity loss you might experience due to specific perils. What you'll learn Types of crop-hail insurance policies and coverage levels that are available How a crop-hail policy works alongside MPCI coverage you may already have Additional types of loss typically covered under a crop-hail policy How to evaluate which policy and coverage level best fits your operation Watch now Take control of your risk and gain greater peace of mind Your Crop Insurance agent can tailor a crop-hail insurance policy to meet the specific needs of your operation with a variety of coverages and endorsements. Want to learn more about crop-hail insurance? Connect with an agent today  to get your questions answered and learn how a crop-hail insurance policy can protect your profit potential this season.


Feb 16, 2022

by FBN Insurance

Collecting and analyzing data is a key factor of success for modern farmers. Almost 86% of farmers said that they want to use data tools that will make their operations more profitable (1). And of course, who doesn’t want to be more profitable?  But another interesting use case for data analysis is for crop insurance benefits or payment reductions. said this is an incentive for collecting and sharing data.  What is precision ag? Precision ag is a way to record the events you’re doing in your fields. These days, a lot of new machines will record  all of the activities you’re doing in your field and provide you with data to analyze. But there are still a number of machines where you need to input your data in order to record what’s going on in the field based on GPS data.  So how can you use the data that’s captured? The raw data won’t be much good unless you have a way to analyze it. That’s where some of our free tools will be able to help you make sense of all this useful data.  Benefits of precision ag  Convenience Don’t let the data that you’re already capturing go to waste. You can upload your data from multiple displays and is compatible with multiple FMS products into your FBN® account.  Save time and money With more accurate data, you’ll always insure exactly what you plant and increase your APH while lowering your premium. And you’ll have fewer records to take care of when adjusting a loss. So reporting a claim will take less time and allow you to get back to your operation.  How much money can I save? As your APH data gets more accurate, so do your claims. On average, farmers are saving 4% on their crop insurance premiums by using their precision ag data. If you’re reporting fewer acres, this results in a higher reported yield. The higher adjusted APH could help you at claim time.  The higher guarantee as a result of an improved APH will be the first dollars that are paid in a loss situation. How to use precision data Acreage and production reporting Use the data you are already collecting for required crop insurance reporting after planting and harvest.  Claims Using just three precision records, your adjuster can adjust a loss in a fraction of the time. APH Reviews Use your electronic precision records for supporting a review to save time, provide the most accurate data available, and improve record organization. Trust and privacy One of the biggest pain points farmers face is knowing which system to use for data analysis. There’s an overabundance of software on the market and it can be difficult to decide which tool offers the best reports.  But for many farmers, there’s also concerns about how their data will be collected and used.  Ag Data Transparent is proud to be certified as (ADT). We have always put Farmers First® and want to be open and transparent about the data we collect. Being certified ADT affirms our data and analytics services are private and secure.  Need a second opinion on your crop insurance?  to learn more about our expert agents and data-backed approach to crop insurance.


Feb 15, 2022

by FBN Insurance

We’re taking a holistic view of what you should be doing for crop insurance this year in this webinar with our team of experts.  Meet our team of experts Eric Sorenson, Director of Crop Insurance Frank Newell, Director of Sales, Crop Insurance  TJ Wilson, Head of Sales, FBN® Finance Kevin McNew, Chief Economist Kelsey Lennon, Our Webinar Host and Associate Product Marketing Manager, Crop Insurance What you’ll learn Reevaluating your coverage: Where to start 4 strategies for optimizing your crop insurance and associated insurance programs Are you getting what you deserve from your insurance agent? What to expect from the Financial Team Watch now Need a second opinion on your crop insurance?  to learn more about our expert agents and data-backed approach to crop insurance.


Feb 15, 2022

by FBN Insurance

As spring approaches, it’s good to keep an eye on the weather and what it could bring for your planting and growing season. With potentially dry and wet weather patterns on the horizon, thinking about your crop insurance coverage is as timely as ever.  La Niña Impacts The backdrop for weather this year is that we are in a La Niña now. The terms La Niña/El Niño are broadly considered to be the ENSO cycle. This refers to the cooling or warming of the waters around the equator. Those cooling and warming waters have global impacts on weather. Right now, the La Niña cycle is reaching its peak and we’ll probably start to see it fade. But the impacts of La Niña will persist well into April.  While the North and West are seeing a cooler mass of air, we’re currently seeing a drought in the Southwestern Plains of the U.S. that is concerning because it is reaching into key winter wheat growing areas . Over the next three months, we’ll start to see that precipitation will continue to be below normal in the Southwestern Plains. This means a continuation of dry conditions in an area that is already experiencing drought.  Looking to the Ohio River Valley and lower Indiana, we expect to see a surge of moisture which could contribute to planting problems because fields will be too wet. This could cause planting delays in this region. Looking Ahead It’s difficult to predict further than three months for what will happen this summer, but we know that weather seldom repeats itself. That said, we should be cautious not to completely ignore the lessons of years past.  It’s always a good bet to think about the "what ifs" with weather. For a farmer who had a good year last year, they may not be thinking about the need for crop insurance... but it's better to be prepared. Knowing that weather never repeats itself and being cautious to plan for the unexpected, farmers should not completely ignoring crop insurance coverage.  Need a Second Opinion on Your Crop Insurance? At , our agents look at historical coverage data and operational data to help you make the best decisions for your farm's unique risk profile. With a fully integrated approach that keeps you secure in down years - without dragging on your profits when times are good - our agents and tools provide straightforward solutions and walk you through how they got there.  to connect with an expert agent and better understand our data-backed approach to crop insurance. Watch Now: Getting the Most Out of 2022 Federal Crop Insurance Programs


Feb 14, 2022

by FBN Insurance

As Spring approaches, it’s a time for new beginnings. A new crop is planted and a new season of optimism is sprung. But that also means you’ll be faced with the inevitability of pest pressure and weed pressure. It’s an unavoidable fact of farming that you’ll deal with both of these at some point.  But having expectations that these issues arise means you can also think about how to factor crop protection into your operation. And planning ahead will help fight these pressures. What fuels pest populations There are a number of factors to consider but they are generally environmentally based. Some of these factors include:
 Weather patterns during the summer and winter Historic pressure Temperature Moisture You’ll also need to consider what types of crop rotations are grown within regions as well as fungal pressures. As an example, corn earworm can infect multiple crops one year but you could see a soybean crop that works the next. This shows the network effect of crop rotations in a given area.  Weed pressure is also something to consider. Weeds are a constant management target where fungal pressures are a little more targeted based on year and environment.  Predicting pests Looking at this winter, you can consider the overall severity to some degree but generally it’s been a warmer winter. There may be some positive downstream effects for overall test pressure but most growers use intuition to look for certain paths at certain times of the year. That allows growers to know certain life cycles of insects on certain crops where you have a timeline of high alerts.  But you can and should also use environmental data like weather, moisture and precipitation for predictive models of what crops may be at highest risk. There are also observation networks where people are nothing where there’s a high prevalence of certain pathogens of where outbreaks are happening.  Integrated pest management The best way to deal with pests is an approach called Integrated Pest Management. It accounts for when an outbreak is occurring and what crop stage is going to be detrimental to overall yield impacts.  By looking at the past, you can determine whether spraying chemicals had an effect and the impact of weather events. Looking at the different types of crop protection products (whether it’s chemical or biological) will also help with pest management.  A good Integrated Pest Management plan will factor in a number of strategies that consider: 

Biological control Cultural control Chemical control Biological control Think of biological control as pitting pests against their own natural enemies such as parasites, predators, or pathogens to help control pests and the damage they cause.  Cultural control  Cultural control is a way of reducing where pests establish themselves, where they reproduce, and ultimately their survival. An example of cultural control would be changing your irrigation practices.  Chemical control  Using pesticides combined with other controls is an effective and long-term strategy. Choosing pesticides that cause minimal damage to people, other organisms and the environment is an integral part of any pest management system.  Weed pressure It's known that if you’re trying to grow a crop, weeds are also trying to grow. You know you’ll be managing weeds year over year. So how do you deal with weed pressure? Growers understand there are certain times of the year to spray. If you have enough weeds, you’ll want to spray them and kill them immediately. But there’s also a prophylactic approach where you know you’ll have bare ground where there’s no vegetation.  About a month or two after you plant, you’ll have full canopy closure where the plants are big enough that the bare ground is no longer showing and it shades out the weeds. The time in between planting the seed and canopy closure allows for different prophylactic spray options that keep weed seeds from germinating. There are also residual herbicides that try to control weeds before they germinate. So you can take a multi-prong approach to weeds.  There are resistance concerns to account for. There are certain weeds that have developed mutations to certain herbicides. It’s good to understand what does and doesn’t always work but to try the multi-prong approach of trying prophylactic applications.  Mistakes to avoid Not paying attention to things like insects on fungal pathogens can sometimes be overlooked. It’s important to be scouting and evaluating your crop so that you don’t miss your timing window and catch yourself in an emergency situation where you have damage to your crop. By scouting early, you’ll hopefully avoid having to perform life saving measures on crops. That’s a worst case scenario so it’s always good to be on top of things. Variety selection is also important. Choosing the right seed with proper resistance to fungal pathogens is another good strategy that can be easily overlooked.  Making the right chemistry decision is going to be effective and will help determine if you need to apply multiple active ingredients to get full control. And while you want to get full control, you can certainly under apply which will ultimately impact yield. Paying attention to chemistry, chemistry mixes and overall rate will help you stay on top of things.  Need advice? ​​Knowing a good agronomist is important to deal with unexpected issues that can arise during a growing season. Reaching out to an agronomist at your local university or an independent or retail agronomist will help you better understand the disease life cycle and pest life cycle. As well, they’ll help you make the right decisions to manage your operation.  Need a second opinion on your crop insurance?  to learn more about our expert agents and data-backed approach to crop insurance.


Feb 11, 2022

by FBN Insurance

Having a grip on your operation’s financial details is a key to ensuring success for your farm. Understanding your yields and the investments you made on inputs to achieve those yields will not only put you on the path for success, it will help your farm’s marketing strategy. That’s why it’s important to conduct a breakeven analysis.  What is breakeven The breakeven point takes into account all of your production costs (land, inputs, living expenses) and helps you understand the minimum market price you’ll need to recoup in order to breakeven. This number can fluctuate based on growing conditions and weather which can impact expected yield.  Here’s an example of how a basic breakeven calculation could look: How to calculate breakeven The first thing you need to do is answer some very simple but important questions: How many acres will you plant? What crops will you plant? What’s their average yield per acre? Answering these questions will help you take into account both your projected income and expected expenses. Knowing your average yield/production per acre will help you build a baseline. To do that, start by building a budget that accounts for expenses like fertilizer cost or seed cost on an annual basis. These are the kinds of expenses that are easy to think about. Too often, people overlook things that should be included in their breakeven analysis. Here’s just a list of things people forget: Payments and depreciations Return to management and labor costs Interest charges on loans Machinery costs Overhead costs Looking at all of these overarching expenses will help you break down your costs to a per acre level. Cost per acre Figuring out your cost per acre will give you more insight into how your operation is performing. The first thing you’ll want to do is generate your average yield by looking at your crop insurance APH. This is the best number to use when looking at your base breakeven yield number. After looking at your base breakeven number, consider a best case scenario and a worst case scenario for your operation. That may mean thinking about having to rely on crop insurance and how your breakeven will look if you do. On the other hand, if you think of the best year you had in the last 10 years, what’s your breakeven if you hit that. Once you’re able to figure out your best/worst case scenario, you’ll be able to generate your average production. You’ll now know your revenue per acre by utilizing the number of acres that you have as well as your yield per acre. There’s always a wild card that comes into play. Price is that wild card. Be extremely conservative when forecasting price. To get the most accurate numbers, try to use the new crop price at your local elevator. Those numbers can go up and down. However, you don’t need that price to create a true breakeven. When you figure out your expenses, you’ll know what your price needs to be because your breakeven price will tell you what you need to sell for. When you compare that to the local price at the elevator, you’ll know if it’s profitable or not. Your breakeven number is just like everything else in your operation. It’s a tool to make decisions. It will help you make better marketing decisions. When to sell Every operation is different. It will depend on when you need cash flow. Do you have payments that need to be made? Rent due? A tax liability? Whether you’re buying equipment, buying land, or taking on new acres will have an effect on your cash flow. All of these decisions have pros and cons on your overall operational breakeven. Utilizing the breakeven analysis allows you to know whether you're selling at a profit or when to market your crop. What to plant Knowing what to plant each year isn’t always an easy decision to make. Asking yourself which commodity makes the most sense is difficult to predict. Trying to outguess the market doesn’t always end well so consistency is best in this type of scenario. Understanding your expenses and financials will help you make solid business decisions and be better equipped to market your crop based on true data. Ultimately, knowing your breakeven per crop will help you in making planting decisions on ground that you may be undecided on. As well, it will help you make better crop insurance coverage decisions. Overall management expenses Planning a farm budget and applying it to your breakeven analysis will help make decisions throughout the season. As an example, many farmers use different inputs (herbicides, fungicides, chemicals and fertilizers) to help generate more yield. How does that affect or counterbalance spending an extra $50/acre on inputs during the season? Will that affect your breakeven or yield? Will this help generate a higher yield? All of these questions come into play and having a budget planned out allows you to make important decisions for your operation. Need a second opinion on your crop insurance? to learn more about our expert agents and data-backed approach to crop insurance.


Feb 01, 2022

by FBN Insurance

If you are looking for additional risk management options this year, consider these elections that can be made at your local USDA Farm Service Agency. Unlike supplemental coverage offered by the RMA these programs are free as long as you meet eligibility requirements. The election and enrollment period opened on Oct. 18, 2021 and runs through March 15, 2022. Below we deep drive into two of these programs: Price Loss Coverage (PLC) Agriculture Risk Coverage (ARC) Price loss coverage (PLC) The Price Loss Coverage (PLC) option provides financial protection to enrolled qualifying producers from substantial drops in crop prices. Covered commodities Wheat, oats, barley, corn, grain sorghum, rice, soybeans, sunflower seed, rapeseed, canola, safflower, flaxseed, mustard seed, crambe and sesame seed, seed cotton, dry peas, lentils, small chickpeas, large chickpeas, and peanuts. How it works Each 2022 crop year commodity has a reference price used to compare against the 2022-2023 Marketing Year Average (MYA) Price . A PLC payment will be calculated when the MYA Price is lower than the PLC Reference Price for the commodity. Any payment amounts are multiplied by the FSA farm program yield for 85% of the FSA farm base acres. Payment example A FSA farm has 100 base acres of Corn with a farm program yield of 170. Corn uses a $3.70 Reference Price for 2022.  The final Marketing Year Average (MYA) Price will need to be less than $3.70 to generate a PLC payment. With a MYA price of $3.55, there is a $0.15/bushel payment ($3.70 - $3.55 = $0.15).  This is then taken times the farm program yield of 170 (170 x $0.15 = $25.50). This is then multiplied by 85% of the farm base acres. ($25.50 x 100 x 85% = $2,167.50) Given the current Projected 2022-2023 MYA price for Corn is $5.45 as of January 12, 2022, PLC is not currently projected to make a payment for Corn, but the 2022 Corn MYA pricing period runs from 9/1/2022 through 8/31/2023. Considerations The RMA crop insurance option Supplemental Coverage Option (SCO) can be purchased on acres that are enrolled in PLC, or not enrolled in ARC. So your election for ARC or PLC must consider the eligibility, cost and benefits of other options such as SCO as well as ARC-County or ARC-Individual. Your FBN Crop Insurance Agent can assist you in understanding these options as they apply to your unique situation each year. Enrollment deadline You must make your PLC / ARC enrollment decision no later than March 15, 2022 at your Farm Service Agency office. Any SCO decisions must be made no later than your crop and county sales closing date with your crop insurance agent. Agriculture Risk Coverage (ARC) The ARC program was authored as part of the 2018 Farm Bill as an alternative to the PLC ( ) program, and is designed to cover “shallow losses” to a farm based on either the county based or individual based coverages mentioned above.  When the 2018 Farm Bill was written, the ARC program would have been a one-time election through 2023, but as of the 2021 crop year, to allow for an annual choice, allowing flexibility to move between the ARC programs and PLC.  This election will renew as is for the following crop year, unless a change in program is requested. The deadline for making program changes is March 15 for the current crop year. ARC features are similar between the county and individual coverages, but they do have a few distinct differences. Option #1: ARC-CO Can be elected on an FSN and commodity basis with PLC alternative ( ) Payments are based off physical location rather than admin county. Payment is not dependent on planting the commodity or yields from the farm. Example:  FSA has corn and soybean base acres for the farm. A producer who plants oats on all cropland acres would still be eligible to receive payment if there is one to be made. Payment is not dependent on planting the commodity or yields from the farm. Payment is issued on a percentage of each covered commodity’s base acres. Prevented planting is not considered in ARC-CO. Payment equals 85% of the sum of base acres of the covered commodity on the farm x crop revenue shortfall calculated above ( ). To calculate the benchmark revenue, actual revenue, and payment, the following must be determined. Benchmark yield 5 year Olympic average of the county’s most recent crop years. For 2022, crop years 2016-2020 will be considered The high and low of that span will be excluded Any actual yields lower than 80% of county T yield will be replaced by 80% of county T yield Benchmark price 5 year Olympic average of the higher of MYA ( ) price or National Loan Rate. For 2022, crop years 2016-2020 will be considered The high and low of that span will be excluded Benchmark revenue Benchmark Yield x Benchmark Price Guarantee Benchmark Revenue x 86% ( ) Actual revenue Actual average county yield for the crop year x the higher of MYA or National Loan Rate. Payment rate Guarantee - Actual Revenue If Guarantee per acre is higher than Actual Revenue, the county and crop are eligible for payment. If Guarantee per acre is lower than Actual Revenue, the county and crop are NOT eligible for payment. Payment maxes out at 10% of Benchmark Revenue. Payment calculation Base Acres x 85% x % Interest in commodity x Payment Rate = Producer Payment Option #2 ARC-IC: ARC-IC has to be elected for all commodities for the entire FSA farm. Production must be reported initially for the 5 year benchmark, in addition to the current year, and must be updated annually thereafter. Payment is based off the individual farm, rather than county yield. Total base acres of all covered commodities on the farm x farm revenue shortfall ( ) Payment requires planting one or more of the covered commodities Exception is prevented planting, but only when 100% of the farm’s acres are prevented A separate payment rate is determined for each producer based off weighted averages from all farms in which the producer enrolls in ARC IC and has an interest in the state To calculate the benchmark revenue, actual revenue, and payment, the following must be determined ( ): Benchmark yield 5 year Olympic average of the county’s most recent crop years. For 2022, crop years 2016-2020 will be considered. The high and low of that span will be excluded. Any actual yields lower than 80% of county T yield will be replaced by 80% of county T yield. Benchmark price 5 year Olympic average of the higher of MYA price or National Loan Rate. For 2022, crop years 2016-2020 will be considered. The high and low of that span will be excluded. Farm benchmark revenue Benchmark Yield x Benchmark Price Benchmark revenue Weighted 5 year Olympic Average of all farms’ annual Farm Benchmark Revenues from above, across all covered commodities. Guarantee Benchmark Revenue x 86% ( Actual revenue Actual Yield x higher of MYA price or National Loan Rate Weighted across all planted covered commodities on all ARC-IC enrolled farms Payment rate Guarantee - Actual Revenue If Guarantee per acre is higher than Actual Revenue, the county and crop are eligible for payment. If Guarantee per acre is lower than Actual Revenue, the county and crop are NOT eligible for payment. Payment maxes out at 10% of Benchmark Revenue. Payment calculation Payment Rate x Base Acres x 65% x % Interest in commodity = Producer Payment  Summary of ARC program If your operation performs similarly with county averages, ARC-CO is likely a good fit for your operation. If your farm tracks significantly higher or lower than the county averages, ARC-IC may be a better option.  For example, if a farm sits in a high-risk area near a river and is susceptible to frequent flooding, ARC-IC may function better on that farm. There are many similar strategies that need to be taken into consideration on a farm by farm basis. There is no perfect one size fits all solution for government disaster assistance, that’s why we have the two different types of ARC coverage, as well as PLC. The nuances of this program can make it difficult to determine the best fit for your operation, and is a great topic to discuss with your crop insurance agent.  Interested in learning more? If you want to discuss these options with an agent, or you want to learn more about FBN’s crop insurance offerings, click here . We can provide a free second opinion on your crop insurance so you have the peace of mind knowing that your coverage is best for your farm.  


Jan 21, 2022

by FBN Insurance

In the coming months, farmers across the U.S. will make their decision on for the year before hitting the fields for spring planting season. How confident are you in your coverage? Do you feel like there is more you can be doing to reduce risk? In this article, we'll break down the three options for supplemental insurance policies to make sure you are set up for success in 2022. These three options are: Supplemental Coverage Option (SCO) Enhanced Coverage Option (ECO) Stacked Income Protection (STAX) When 85% Revenue Protection Just Isn’t Enough We are all aware that input costs continue to rise and approved trend adjusted yields are not keeping up with expected yields. This has caused many producers who have historically purchased an upper level Revenue Protection (RP) policy to look at the 80% or 85% revenue guarantee and realize this may not be enough revenue to satisfy their risk management program. The Supplemental Coverage Option (SCO) and the Enhanced Coverage Option (ECO) provide an opportunity to increase both yield and revenue coverage to a level that provides better financial coverage. Supplemental Coverage Option (SCO) SCO is a county-level crop insurance option that provides additional coverage for a portion of a producer’s underlying crop insurance policy deductible. Producers must buy it as an endorsement to either the Yield Protection, Revenue Protection, or Revenue Protection with the Harvest Price Exclusion policies. It was originally offered in 2015 for select counties. Thanks to its success, the program has expanded throughout the country for many different crops. The federal government provides a 65% premium subsidy for SCO total premium. How Does SCO Work? SCO follows the coverage of your underlying policy. If you choose Revenue Protection, then SCO covers revenue loss. If you choose Yield Protection, then SCO covers yield loss. The amount of SCO coverage depends on the liability, coverage level, and approved yield for your underlying policy. However, SCO differs from the underlying policy in how a loss payment is triggered. The underlying policy pays a loss on an individual basis and an indemnity is triggered when you have an individual loss in yield or revenue. SCO pays a loss on an area basis, and an indemnity is triggered when there is a county level loss in yield or revenue. The following is an example of a corn grower’s policy: Grower APH: 200 County Expected Yield: 205 Underlying Policy: 75% RP County SCO Coverage: 86% Spring Price: $5.50 Harvest Price: $5.00 Producer Yield: 180 County Yield: 180 Expected Revenue: $1,100 Expected County Revenue: $1,127.50 The underlying policy covers 75% (or $825) of the expected crop value and leaves 25% (or $275) uncovered as a deductible. In this example, SCO would begin to pay when the County Average Revenue falls below 86% of its expected level ($969.65).  It would pay out fully when the county average revenue falls to the coverage level of the underlying policy ($845.62, 75% of expected county revenue). This example would provide $121.00 of coverage per acre based on 11% of the producer’s expected revenue (86%-75%).  The dollar amount of SCO coverage is based on the percent of crop value covered. In this example there are 11 percentage points of coverage (from 86% to 75%). 11% of the expected crop value is $121.00 (or 11% • $1,100.00). The SCO policy can cover up to $121.00 of the $275 deductible amount not covered by your underlying policy. Is SCO a Good Fit for You? This policy is a good fit for producers that trend with or better than the county. SCO payments are determined only by county average revenue or yield, and are not affected by whether you receive a payment from your underlying policy. It is possible to experience an individual loss but to not receive an SCO payment, or vice-versa. This policy may not be a good fit for producers that do not have yields that trend on average below the county. If you have a crop that yields less than the county, you may miss out on an indemnity even though you had a poor crop. The 65% subsidy makes this attractive to many producers because this allows them to increase their coverage to 86% at a much more affordable premium versus the higher cost upper level RP plans in certain areas of the country. Enhanced Coverage Option (ECO) ECO is a county-level crop insurance option that provides additional coverage for a portion of a producer’s underlying crop insurance policy deductible. Producers must buy it as an endorsement to either the Yield Protection, Revenue Protection, or Revenue Protection with the Harvest Price Exclusion policies. Originally offered in 2021 for select counties, the program has expanded throughout the country for many different crops. The federal government provides a 44% premium subsidy for ECO with a RP underlying policy and 51% premium subsidy with a YP underlying policy . How Does ECO Work? ECO follows the coverage of your underlying policy. If you choose Revenue Protection, then ECO covers revenue loss. If you choose Yield Protection, then ECO covers yield loss. Coverage levels can be purchased at a 90% or 95% level. This will provide 4% or 9% of the total expected crop revenue for coverage. The amount of ECO coverage depends on the approved yield for your underlying policy. However, ECO differs from the underlying policy in how a loss payment is triggered. The underlying policy pays a loss on an individual basis and an indemnity is triggered when you have an individual loss in yield or revenue. ECO pays a loss on an area basis, and an indemnity is triggered when there is a county level loss in yield or revenue. The following is an example of a corn grower’s policy: Grower APH: 200 County Expected Yield: 205 Underlying Policy: 75% RP County ECO Coverage: 95% Spring Price: $5.50 Harvest Price: $5.00 Producer Yield: 180 County Yield: 180 Expected Revenue: $1,100 Expected County Revenue: $1,127.50 The underlying policy covers 75% (or $825) of the expected crop value and leaves 25% (or $275) uncovered as a deductible. In this example, ECO would begin to pay when the County Average Revenue falls below 95% of its expected level ($1,071.12).  It would pay out fully when the county revenue falls to the 86% level ($969.65, 75% of expected county revenue).   This example would provide $99.00 of coverage per acre based on 9% of the producer’s expected revenue (95-86%).  The dollar amount of ECO coverage is based on the percent of crop value covered. In this example there are 9 percentage points of coverage (from 95% to 86%). 9% of the expected crop value is $99.00 (or 9 percent • $1,100.00). The ECO policy can cover up to $99.00 of the $275 deductible amount not covered by your underlying policy, but more importantly bring the trigger on any loss up to 95%. Is ECO a Good Fit for You? This policy is also a good fit for producers that trend with or better than the county. ECO payments are determined only by county average revenue or yield, and are not affected by whether you receive a payment from your underlying policy. It is possible to experience an individual loss but to not receive an ECO payment, or vice-versa. This policy would be considered a better fit for the producers that do not have yields that trend with or below the county average. Since this is a product that provides coverage above the maximum level of an underlying Multi Peril policy (RP, YP). However, if you have yields that do not trend with the county, there are multiple other private products that allow you to purchase an additional level of coverage on your individual yields and not rely on county averages. Coverage Levels You do not have to purchase both SCO and ECO. If you purchase ECO, your underlying MPCI policy does not have to be at an 85% level. You can purchase a lower level coverage (i.e.: 75%).  This would provide a “donut hole” from 86% down to the 75% level where your underlying policy would begin coverage.  You would still have 84% coverage on your crop (75% RP and 9% ECO), it is just that a portion of the coverage would be based on a county yield instead of your individual protection.  If you historically track with the county this may be a good option to consider. Indemnity Payment Timing Since SCO and ECO are both based on county yields, the ability to calculate any losses will be delayed until all county yields are reported. In Iowa, the Production Reporting Date is April 29. Even though it’s typical to have production reported earlier than this, county yields can not be calculated until this date due to producers who may wait til the last minute to report production. This means that any indemnity through these endorsements would not be paid until June of the year following your crop (i.e.: June 2023 for the 2022 corn crop).  Keep this in mind to avoid a cash flow bind as the exact dollar amount would not be known until well after harvest. Other Considerations to Keep in Mind When purchasing SCO, be careful that you elect PLC (Price Loss Coverage) when signing up for the farm program. Electing ARC (Area Revenue Coverage) provides you with a revenue policy and in the eyes of the government are double insuring your crop if you also purchase SCO. If you elect SCO and ARC for the same crop on a farm, your SCO coverage for that crop on that farm will be cancelled and you must report the crop on that farm as covered by ARC on your acreage report. If you do not report a farm covered by ARC the acreage of that farm will be ineligible for an SCO payment, but you will still owe 60% of your SCO premium on that crop and farm to cover administrative expenses. However, your underlying policy will still be in effect. If ECO is the only endorsement being purchased, you are able to elect either PLC or ARC. SCO and ECO Coverage Options SCO and ECO are federally subsidized products that provide an increased level of coverage. The products are based on county yields, but allow a producer to have up to 95% of the expected county yield. The products are a good fit for producers who consistently produce yields in line with the county. It also provides a high trigger level to help ensure that a producer has a high level of revenue that is needed with the high price of inputs. The 2018 Farm Bill Disaster Assistance programs can be an extremely intimidating and complicated subject for a grower.  Below, we'll outline the high level basics of how Agriculture Risk Coverage ( ) functions and provide some observations on the two underlying products; ARC-CO ( ) and ARC-IC ( ).   Stacked Income Protection (STAX / PLC-ARC) Stacked Income Protection (STAX) was developed by RMA in response to the omission of a cotton program payment in the 2014/2018 Farm Bills. Upland Cotton producers were able to purchase risk management products heavily subsidized by the U.S. government to protect area yield and market losses in their market. Recently, the USDA changed their products to include a version of cotton protection through the seed cotton. These protections allowed cotton producers to participate in USDA programs like other crops. With that said, generic base was converted to either a mix of your recent annual plantings (crop mix) or 85% of your generic base could be re-assigned to cotton base. PLC has a set price for the period of the farm bill, and ARC uses an olympic average (5-year prices dropping the highest and lowest prices in that period). Payments are paid on the producer’s FSA yields for PLC and ARC-Individual , but paid on area average yields for ARC-County. With the recent rise in cotton markets, upland cotton producers need to evaluate their individual situation as it relates to risk management. 2022 is yielding higher cotton prices than in the recent past, and area (county) yields have increased due to growing conditions, technology, and farming practices. Whereas FSA PLC/ARC programs focus on base acres and historical prices, STAX considers planted acres, current market prices, and recent yield trends. Though STAX does have an associated premium (80% subsidized by USDA), this may be a better option than PLC/ARC programs for 2022. As with all Risk Management Solutions, this may not be applicable in your situation, but it is worth investigating in all scenarios. Looking for (Free) Guidance on Your Crop Insurance? At FBN, our team is here to help you choose the right crop insurance program to manage your farm's unique situation. We can even provide a free second opinion on your crop insurance so you have the peace of mind knowing that your coverage is best for your farm. If you'd like to discuss these options with an agent, or if you want to learn more about FBN®’s crop insurance offerings, connect with a member of the FBN Crop Insurance team . Watch Now: 5 Reasons to Break Up with Your Crop Insurance Agent Resources USDA ARC/PLC Fact Sheet Farmdoc ARC/PLC Calculator