Insurance

Your farm is unique. Your insurance policy should be, too.  Having the wrong level of insurance coverage can have an immense impact on your bottom line long term — you could be overpaying on premiums year after year or under-compensating for risk, leaving your operation exposed in difficult years. At FBN , our insurance agents work closely with farmers to develop risk management plans personalized for their unique operations. Backed by data-based insights and analytics powered by the FBN network, FBN Insurance leverages innovative technology and data science to deliver customized, straightforward advice on crop insurance plans.  Personalized Policies No two farms are identical, so your crop insurance coverage shouldn’t be either. FBN Insurance agents use anonymized and aggregated operational, weather and other data to help you make the best decisions possible for the level of risk you’re comfortable with. After building a scenario analysis, our FBN Insurance agents give you a detailed overview of the cost per acre and likely payouts for each policy type and coverage level across a range of possible scenarios. The policy is personalized to your local weather and pricing patterns, crop marketing plans and risk appetite.  Not sure what your appetite for risk actually is? We can help with that, too. With FBN Insurance, you can get access to all of the insurance products available through federal programs — plus a large selection of private products offered through our preferred partner companies. [Crop insurance is more than just another number on your cost sheet. Are you confident in your coverage?] Innovative Technology and Data-Based Coverage  By developing easy-to-access resources, automated technology and useful tools, FBN Insurance aims to make record-keeping and policy management easier, putting a long-awaited end to lengthy paperwork and painful processing. Guided by a Farmers First® mindset, our goal is to build technology that makes our policyholders’ lives easier and our insurance agents even more effective.  [Read more about how our team is innovating the future of FBN Insurance.] Experienced Team with a Straightforward Approach At FBN Insurance, we’re a local team with national reach. Our experienced and localized insurance agent team is readily available to help you make the best decisions for your operation’s unique risk profile. Our agents understand that insurance is about security, and they’ll work with you to think holistically about your risk management strategies so you have peace of mind in your coverage. You shouldn’t have to re-learn the language of insurance every year. Our agents offer straightforward recommendations and walk you through the data that got them there.  [WATCH: Data Driven Insurance - How to Use Data to Make Informed Coverage Decisions] FBN Crop Insurance Coverage Interested in a second opinion on your policy? Click here or complete the form below to get more information about our expert agents and data-backed approach to crop insurance. Copyright © 2014 - 2023 Farmer's Business Network, Inc. The sprout logo, “Farmers Business Network” and “FBN” are trademarks, registered trademarks or service marks of Farmer's Business Network, Inc. We are an Equal Opportunity Provider. FBN Insurance services are offered by FBN Insurance LLC (dba FBN Insurance Solutions Services LLC in Texas, and FBN Insurance Solutions LLC in California and Michigan). FBN Crop Insurance is currently offered in all U.S. states.

We’re taking a holistic view of what you should be doing for crop insurance this year in this webinar with our team of FBN® Crop Insurance experts.  Featured Speakers Eric Sorensen, FBN Director of Crop Insurance  Kevin McNew, FBN Chief Economist and VP of FBN Research Don Moody, FBN Senior Sales Manager What You’ll Learn What makes 2023 unique? Supplemental coverage Global Grain Markets Outlook 2023 The FBN approach to insurance Watch Now: Crop Insurance Outlook and Tools Take Control of Your Risk Your FBN Insurance agent can tailor a specialty crop insurance policy to meet the specific needs of your operation to help you gain greater peace of mind. Learn more about this program or connect with an agent by visiting the FBN Crop Insurance page or calling (877)-576-4468 . Copyright © 2014 - 2023 Farmer's Business Network, Inc. All rights Reserved. The sprout logo, “Farmers Business Network”, “FBN” are trademarks, registered trademarks or service marks of Farmer's Business Network, Inc. Disclaimer:  The purpose of the following material is to promote awareness of risk management concepts and to highlight risk management products, features, benefits and availability. This presentation does not provide full details of policy provisions or approved procedures. Producers should consult with a local agent for specific details and program requirements. We are an Equal Opportunity Provider.  FBN Insurance services are offered by FBN Insurance LLC (dba FBN Insurance Solutions Services LLC in Texas, and FBN Insurance Solutions LLC in California and Michigan). FBN membership is not required to purchase through FBN Insurance LLC, but certain features may only be available to FBN members. FBN Crop Insurance is currently offered in all U.S. states.

The Apiculture Insurance Program is intended for honey and pollination production as well as wax and breeding purposes to protect against a lack of rainfall.  Join Stephanie Blair, FBN® Insurance Agent and Beekeeper as she discusses the details of how coverage is determined with the Rainfall Index, how grids are assigned and determining a coverage level.  Stephanie also covers deadlines, enrollment periods and how and when an indemnity is triggered. Learn more about our Optimizer tool and how it determines what coverage makes sense for your operation. Watch Now - Apiculture: Rainfall Index Insurance Learn More Learn more about Apiculture Insurance from FBN. You can also learn more about Pasture, Rangeland and Forage insurance .  Audio Transcript Welcome and thank you for joining me for this short introduction to Apiculture Rain Index Insurance. My name is Stephanie. I'm a commercial beekeeper on the other side of being a crop insurance agent for FBN and that's why I specialize in the Apiculture portion of the Rain Index program. We have the program, that's how I got into selling the program.  We run 4,000 hives here from Minnesota back out to California for pollination, and our family runs around 9,000 in total commercially from the west coast to here in the Midwest. As you can see, we've endured a few different fall and winter weather and then we got to California and did the pollination and my nieces love to help us out there with that.  Just a few fun pictures to look at with us, but before I get into the Apiculture Index program I have a little disclaimer from FBN that I have to go through. If you would read that with me. The purpose of the following material is to promote awareness of risk management concepts and to highlight risk management products, features, benefits and availability. This presentation does not provide full details of policy provisions or approved procedures. Producers should consult with a local agent for specific details and program requirements. We do not make any representations or warranties expressed or implied as to the accuracy of completeness of the statements or any information contained in the material and any liability, therefore is expressly disclaimed. Thank you for that.  Apiculture rain index program is a USDA program run by the RMA. So it's a lack of rainfall protection intended for honey and pollination production. So if it's dry, you're not really gonna be making honey or there's not gonna be forge for the bees, so you're gonna have to feed them syrup tanks of tanker loads or pollen or winter patties, sugar patties, any of that stuff to kind of substitute the forge that isn't out there. So that's what this program is for. And the RMA goes through the NOAA, the National Oceanic Atmospheric Administration and that's where they gather the rainfall data for this program. And we'll get into the little details a little bit in the next slide here. And how it works is like you pin your locations, all your locations that your bees are at for honey production or pollination, and those grids are 17 by 17 miles, so maybe 10 yards are in one grid.  We can insure that chunk of highs like, let's say 200 hives in that grid and then you have, you know, several other grids in multiple states. That's why it's so great for beekeepers. We have multiple states. So when Texas and California are dry, maybe Minnesota's wet so you're making honey but you're not getting that forage you need and those two states are paying out. Or last year Texas was really wet, Minnesota and California were dry. So Minnesota and California were paying out where Texas was producing you your honey or getting you ready for the spring and then They're in two month intervals. And we'll get into that on the next slide. Also, the policy runs from January 1st to December 31st you select two month intervals, so like a January, February interval is one or March, April. And we'll look at examples of that coming up here.  You can select 70 to 90% of coverage. So if rainfall is under 90% of average, you would get an indemnity. If it was, it only rains 76% of average it would be prorated and you would get that indemnity. And it's triggered 60 to 90 days after the interval. So once January, February finalizes, that's probably gonna be more to that 60, 90 days after. That's when it issues a check or pays off some of your premium if it was below that average of the amount you selected. And this program is highly subsidized. It's wonderful. That's why it works because everyone's, what's the catch? There's no catch. It's just subsidized because it wouldn't work. We wouldn't have this funding that we need to help us with our operations just like farmers with their cattle. And that's how it started. With farming you can get up to a 59% subsidy depending on the coverage you select, but most people get the 51% subsidy because of how the program works.  Our optimizer breaks it down very well on how, what percentages, coverage levels should you have versus productivity factor. And that's all stuff you can talk to with your local agent. Here's an example of that two month interval option. You can select multiple intervals or just a few like in option three, but you have to have a hundred percent in total. So on the next slide we'll go through an example here and we're doing a hundred percent of coverage in this Ottertail Minnesota County for a hundred colonies. So your values are over here on the right and your total premium is 2,912 for these a hundred colonies and you're subsidized at 51%, which is wonderful. So your premium's only 1,427 for the full year and you're not billed until September 1st. That's the wonderful thing. It gives you the opportunity to earn your money back. And we'll look at the history here. It gives you a little data here of your average index, average rainfall, the payments on average and the years it's paid out since 2010 Here we're looking at history here and the 2013 was the only year that you would've had to pay a portion of the premium of that $199 out of the 1,427.  If you only have these a hundred hives insured in Ottertail County. And like I said, we have multiple states as a commercial beekeeper, some people only do one state, so, but you might have multiple grids. So as you can see this year's been a pretty wet year and June, July and July, August here, you wouldn't have both of them covered but you would probably have one of them covered. So that might start paying out here once they finalized in 60 to 90 days, that July, August is really low and it might be a green coverage there, like a green return. So green is good, green is under average here, under the 90% of average we've selected. So anything in green is under that 90%.  Over here on the right under your returns, anything over a 100% is a profit. A hundred percent even is paid off your premium. You're even, and you can tell it's worked wonderful for this, for this grid and it's worked wonderful for us. You know we have Ottertail County. I'm not sure if we have the specific grid, but it's worked wonders for us and this has all the data that you needed and it goes back to 1954. So that data is wonderful to have our FBN optimizer we're coming out with where it sets up your whole operation, and the best way is to set up it as an entire operation hole, not just every individual grid on its own. Because you can have multiple grids, you will have multiple grids. I think we have about 40 different grids. We don't insure them all because it's not best to insure them all for our operation. But that's something to talk to your local agent about. This slide talks about once the RMA releases the final index interval values, that's when our agency issues a check to you.  Once your premium is paid off, it'll go towards your premium first and then a check will be issued. So maybe January, February only covers your premium. Well then your next interval coverage is April, may. Maybe that will issue out a check 60 to 90 days after. If you have any questions either that is literally just an introduction to this program. It's based on lack of rainfall alone.  You don't have to turn in anything in, you just have to do your renewals and the first year's the hardest, plotting all your locations so we can look at the grids that you're in, figure out the coverage that you need and then it's just kind of renewal after that. What do you think this next year's gonna bring? And be sure to sign up before December 1st for 2023 coverage. If you're thinking it's gonna be dry for 2023, definitely talk to your local agent. And again, beekeepers, we're so lucky to have multiple states so we can cover that.  It's very good our optimizer is coming out. It's gonna tell you for your multi-state what is the best option in coverage and I hope that this has got you interested in calling us, interested in checking it out and I urge you to do it. It's helped us so much with tanker loads of syrup. There's a tank here a little early, but we're getting it while we can because you know how syrup tanks, deliveries are right now since the last couple years. Have a great day everybody. Thanks for joining. Copyright © 2014 - 2023 Farmer's Business Network, Inc. All rights Reserved. The sprout logo, “Farmers Business Network” and “FBN” are trademarks, registered trademarks or service marks of Farmer's Business Network, Inc. Disclaimer :  The purpose of the following material is to promote awareness of risk management concepts and to highlight risk management products, features, benefits and availability. This presentation does not provide full details of policy provisions or approved procedures. Producers should consult with a local agent for specific details and program requirements. We are an Equal Opportunity Provider .  FBN Insurance services are offered by FBN Insurance LLC (dba FBN Insurance Solutions Services LLC in Texas, and FBN Insurance Solutions LLC in California and Michigan). FBN Crop Insurance is currently offered in all U.S. states.

Kevin McNew, Chief Economist at FBN® gives his prediction on weather patterns entering the 2023 planting season.  In his latest video, he discusses drought patterns, where it is looking more wet and La Nina expectations. To discuss how this could have an impact on your crop insurance decisions, please visit fbn.com/MPCI . Watch Now Audio Transcript What can we expect for the weather in 2023? As farmers start to think about the growing season?  First of all, as we enter 2023, we have a huge split where part of the country is super wet, namely California in the western part where we've seen just torrential rains.  Then we have this lingering ongoing drought that is persistent for some time in the central and southern plains of the U.S.  and then we also have what is a third winter in a row of La Niña.  So all of these factors are kind of shaping up for a challenging 2023 growing season as we look ahead. But here are some of the things we see on the horizon.  First of all, La Niña likely starts to pull back and get us back to what is called ENSO neutral state, where we're neither in La Niña or El Niño. That hopefully bodes well from maybe some of these longer term drought weather patterns shifting a little bit, not necessarily getting us out of the prolonged drought in the southern central plains, but maybe giving some modest relief as we move forward.  Looking into early parts of spring, the forecast looks to be pretty favorable for moisture in the Pacific Northwest. Pretty favorable for warmer than normal temperatures in the upper Midwestern and northern plains.  This was an area last year that really struggled with a lot of cold temperatures and delayed planting. So hopefully farmers in those areas will see better weather this coming spring.  But in those really drought stricken areas, the western Kansas, Texas, into Western Nebraska, Eastern Colorado, there may be modest improvements in soil moisture, but overall it seems unlikely.  We're gonna turn the tide really quickly on this prolonged drought as we move forward. Copyright © 2014 - 2023 Farmer's Business Network, Inc. All rights Reserved. The sprout logo, “Farmers Business Network”, “FBN” are trademarks, registered trademarks or service marks of Farmer's Business Network, Inc. Disclaimer :  The purpose of the following material is to promote awareness of risk management concepts and to highlight risk management products, features, benefits and availability. This presentation does not provide full details of policy provisions or approved procedures. Producers should consult with a local agent for specific details and program requirements. We are an Equal Opportunity Provider.   FBN Insurance services are offered by FBN Insurance LLC (dba FBN Insurance Solutions Services LLC in Texas, and FBN Insurance Solutions LLC in California and Michigan). FBN membership is not required to purchase through FBN Insurance LLC, but certain features may only be available to FBN members. FBN Crop Insurance is currently offered in all U.S. states.

What are farm costs going to look like in 2023?  In our latest video, Kevin McNew, Chief Economist at FBN® discusses: Input prices Fertilizer prices Chem prices What to expect from interest rates.  To discuss how this could have an impact on your crop insurance decisions, please visit fbn.com/MPCI . Watch Now Audio Transcript In 2022, farm inflation was off the charts. We saw higher fertilizer prices, higher chemical prices. We had interest rates starting to move up.  What can farmers expect for 2023? I think the good news is we will see some moderation in terms of key inputs that farmers are buying this winter. Namely, we expect fertilizer prices to retreat a little bit off of the highest set in the spring.  We do also expect chem prices to come down. We're seeing pretty dramatic return to normal valuations for active ingredients out of China.  That is starting to make its way into price reductions in ag retail chem prices that farmers are paying now as they look to purchase inputs for 23. On the interest rate side, I don't think we're gonna see a back down in interest rates in 2023.  Indeed, at the Fed's meeting next week, we'll likely see another round of interest rate hikes. Although the hikes should be much smaller than past hikes because we are starting to see consumer inflation drive lower.  We are starting to see some slowdown in the US economy. So overall I think farm costs will be a little moderate from last year, but still very inflated compared to values that they were paying in 2021’s growing season. Copyright © 2014 - 2023 Farmer's Business Network, Inc. All rights Reserved. The sprout logo, “Farmers Business Network”, “FBN” are trademarks, registered trademarks or service marks of Farmer's Business Network, Inc. Disclaimer :  The purpose of the following material is to promote awareness of risk management concepts and to highlight risk management products, features, benefits and availability. This presentation does not provide full details of policy provisions or approved procedures. Producers should consult with a local agent for specific details and program requirements. We are an Equal Opportunity Provider.   FBN Insurance services are offered by FBN Insurance LLC (dba FBN Insurance Solutions Services LLC in Texas, and FBN Insurance Solutions LLC in California and Michigan). FBN membership is not required to purchase through FBN Insurance LLC, but certain features may only be available to FBN members. FBN Crop Insurance is currently offered in all U.S. states.

Hear from FBN® Chef Economist, Kevin McNew’s s market predictions ahead of the 2023 growing season.  In this video, he discusses the future for corn, international conditions in Argentina and Brazil, fertilizer prices and the condition of the US dollar.  To discuss how this could have an impact on your crop insurance decisions, please visit fbn.com/MPCI . Watch Now Audio Transcript As a grain farmer, I think there's a lot of reasons to be optimistic. As we head into the 2023 growing season, one of the key things we look for that will differentiate ‘23 from ‘22 is that we look for corn to really kind of take leadership on the next leg up in prices.  Here's why we think there's so much optimism around the corn market. First of all, in the last year it's been a struggle to see corn get exported to world buyers. Several factors have caused a headwind around that.  One is the strength in the US dollar, especially between January and October of 2022, we saw the US dollar climb sharply up 30% against some of the major currencies around the world, which is a huge downgrade in terms of being able to export corn.  Secondly, in the last fall harvest period, we had hiccups and huge disruptions as a result of the Mississippi River and the drought that impeded our ability to export to world markets.  All of those things are reversing course now. The US dollar is actually starting to weaken as concerns and risk around inflation and interest rates are drawing down. And secondly, we've seen, you know, export buyers start to step in, especially this week with both Colombia and Mexico showing some interest in US corn.  The other thing that we think is positive heading into ‘23 is the struggles that Argentina and to a lesser extent Brazil are having in their growing season. We think this plays out really sharply in terms of corn, where Argentina will have a very, very downgraded crop and the potential for Brazil to have a worse second season safrinha corn crop, I think adds more fuel to the fire for the corn market.  And then finally, in ‘23, the world is going to be struggling still with high nitrogen fertilizer prices. US farmers are probably in the best position to grow corn because of our abundance of natural gas, which is helping us have reasonably cost nitrogen fertilizers.  But the rest of the world is not so fortunate, and so I think we will see a big pullback in world corn acres where US farmers may be able to at least maintain and possibly move higher.  So overall, we look for solid prices in ‘23 with corn, probably having the best upside potential. Thanks for watching. Copyright © 2014 - 2023 Farmer's Business Network, Inc. All rights Reserved. The sprout logo, “Farmers Business Network”, “FBN” are trademarks, registered trademarks or service marks of Farmer's Business Network, Inc. Disclaimer :  The purpose of the following material is to promote awareness of risk management concepts and to highlight risk management products, features, benefits and availability. This presentation does not provide full details of policy provisions or approved procedures. Producers should consult with a local agent for specific details and program requirements. We are an Equal Opportunity Provider.   FBN Insurance services are offered by FBN Insurance LLC (dba FBN Insurance Solutions Services LLC in Texas, and FBN Insurance Solutions LLC in California and Michigan). FBN membership is not required to purchase through FBN Insurance LLC, but certain features may only be available to FBN members. FBN Crop Insurance is currently offered in all U.S. states.

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. 77% of farmers 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. This means 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. [WATCH: Data Driven Insurance: Using Data to Make Informed Decisions] 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 FBN is proud to be certified as Ag Data Transparent (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.  [READ: Are You Confident in Your Crop Insurance Coverage?] Need a second opinion on your crop insurance? With a range of tools that provide a virtual snapshot of what risk looks like in your area and on your farm, our team utilizes more than 30 years of data and  FBN  insights to compare different scenarios and see how they would work for you. Click here  to learn more about our expert agents and data-backed approach to crop insurance. Resources (1) - Farmer Perspectives on Data 2021 Copyright © 2014 - 2023 Farmer's Business Network, Inc. All rights reserved. "Farmers Business Network", "FBN", “FBN Direct”, "Farmers First" and the Farmers First flag logo are registered service marks of Farmer's Business Network, Inc. We are an Equal Opportunity Provider. FBN Crop Insurance services are offered by FBN Insurance LLC (dba FBN Insurance Solutions Services LLC in Texas, and FBN Insurance Solutions LLC in California and Michigan) and are only available where FBN Insurance LLC is licensed. FBN membership is not required to purchase through FBN Insurance LLC, but certain features are only available to FBN members. FBN Crop Insurance is currently offered in the following states: AK, AL, AR, AZ, CA, CO, CT, DE, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MD, ME, MI, MN, MO, MS, MT, NC, ND, NE, NH, NJ, NM, NV, NY, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV, WY.

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. 17, 2022 and runs through March 15, 2023 . Below we deep dive into two of these programs: Price Loss Coverage (PLC) Agriculture Risk Coverage (ARC) What Is 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 and large chickpeas Peanuts How Does Price Loss Coverage Work? Each 2023 crop year commodity has a reference price used to compare against the 2023-2024 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. PLC 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 2023. 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 2023-2024 MYA price for corn is $5.95 as of January 4, 2023, PLC is not currently projected to make a payment for corn. However, the 2023 Corn MYA pricing period runs from September 1, 2023 through August 31, 2024, so the official MYA price has yet to be determined. What Is Agriculture Risk Coverage (ARC)? The ARC program was authored as part of the 2018 Farm Bill as an alternative to the Price Loss Coverage 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, this has been updated 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 ( can have one crop enrolled in ARC-CO and another in PLC ) Payments are based on 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 ( not to exceed 10% of benchmark county revenue ). 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 2023, crop years 2017-2021 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 ( Marketing Year Average ) price or National Loan Rate. For 2023, crop years 2017-2021 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% ( ARC coverage level ) 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 on the individual farm, rather than county yield. Total base acres of all covered commodities on the farm x farm revenue shortfall ( not to exceed 10% of the benchmark producer revenue ) 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 ( Must be done individually for each farm in which there is a share ): Benchmark Yield 5 year Olympic average of the county’s most recent crop years. For 2023, crop years 2017-2021 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 2023, crop years 2017-2021 will be considered. The high and low price 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% ( ARC coverage level) 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  [WATCH: Learn why data deserves a seat at the table when it’s time to invest in crop, farm and livestock insurance in the "Driven Insurance: Using Data to Make Informed Decisions" video.] 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 has the tools and knowledge to be able to 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, 2023 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. Which ARC Program Is the Best Fit for My Ag Operation? 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.  [READ: Are You Confident in Your Crop Insurance Coverage?] Interested in Learning More? If you'd like to discuss these options with an agent to make the right selection, or you're interested in learning more about FBN ’s crop insurance offerings, click here or complete the form at the bottom of this page. Our skilled team, most of whom are producers themselves, 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. Copyright © 2014 - 2023 Farmer's Business Network, Inc. All rights Reserved. The sprout logo, “Farmers Business Network”, “FBN” are trademarks, registered trademarks or service marks of Farmer's Business Network, Inc. We are an Equal Opportunity Provider. FBN Crop Insurance services are offered by FBN Insurance LLC (dba FBN Insurance Solutions Services LLC in Texas, and FBN Insurance Solutions LLC in California and Michigan) and are only available where FBN Insurance LLC is licensed. FBN membership is not required to purchase through FBN Insurance LLC, but certain features are only available to FBN members. FBN Crop Insurance is currently offered in the following states: AL, AR, AZ, CA, CO, FL, GA, IA, ID, IL, IN, KS, KY, LA, ME, MI, MN, MO, MS, MT, NC, ND, NE, NM, NV, NY, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WA, WI, WV, WY.  

Understanding your operation’s financial details is key to ensuring success for your farm. Knowing 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 also 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: Click here to enlarge the image. 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 figure? 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? Our team of insurance agents understands ag; as producers themselves, many of them are familiar with the unique challenges of running an ag operation. They'd be happy to review your options with you and discuss what's possible. Click here or complete the form below to connect with one of our insurance agents and learn more about our data-backed approach to crop insurance. Copyright © 2014 - 2023 Farmer's Business Network, Inc. All rights reserved. "Farmers Business Network", "FBN", “FBN Direct”, "Farmers First" and the Farmers First flag logo are registered service marks of Farmer's Business Network, Inc. We are an Equal Opportunity Provider. FBN Crop Insurance services are offered by FBN Insurance LLC (dba FBN Insurance Solutions Services LLC in Texas, and FBN Insurance Solutions LLC in California and Michigan) and are only available where FBN Insurance LLC is licensed. FBN membership is not required to purchase through FBN Insurance LLC, but certain features are only available to FBN members. FBN Crop Insurance is currently offered in the following states: AK, AL, AR, AZ, CA, CO, CT, DE, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MD, ME, MI, MN, MO, MS, MT, NC, ND, NE, NH, NJ, NM, NV, NY, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV, WY.

In the coming months, farmers across the U.S. will make their decision on crop insurance 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 2023. These three options are: Supplemental Coverage Option (SCO) Enhanced Coverage Option (ECO) Stacked Income Protection (STAX) When 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. [Overwhelmed by options? Our team is here to help you choose the right crop insurance program to manage your unique situation. Call us at 877-576-4468 to speak to an agent about which solutions are right for your farm.] 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: $6.00 Harvest Price: $5.00 Producer Yield: 180 County Yield: 180 Expected Revenue: $1,200 Expected County Revenue: $1,230 The underlying policy covers 75% (or $900) of the expected crop value and leaves 25% (or $300) uncovered as a deductible. In this example, SCO would begin to pay when the County Average Revenue falls below 86% of its expected level ($1,057.80).  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 $132.00 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 $132.00 (or 11% • $1,200.00). The SCO policy can cover up to $132.00 of the $300 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: $6.00 Harvest Price: $5.00 Producer Yield: 180 County Yield: 180 Expected Revenue: $1,200 Expected County Revenue: $1,230 The underlying policy covers 75% (or $900) of the expected crop value and leaves 25% (or $300) uncovered as a deductible. In this example, ECO would begin to pay when the County Average Revenue falls below 95% of its expected level ($1,168.50).  It would pay out fully when the county revenue falls to the 86% level ($1,057.80, 75% of expected county revenue).   This example would provide $108.00 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 $108.00 (or 9 percent • $1,200.00). The ECO policy can cover up to $108.00 of the $300 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 may not be a good fit for producers whose yields trend well below the county or are poorly correlated with county yields. However, if you have yields that do not trend with the county, there may be 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, you can also elect PLC (Price Loss Coverage) when signing up for the farm program, but not ARC (Area Revenue Coverage) since ARC also provides you with a band of county based coverage. If you elect SCO and ARC for the same crop on a farm, your SCO coverage for that crop on that farm will be canceled 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 ( ARC ) functions and provide some observations on the two underlying products; ARC-CO ( county based coverage ) and ARC-IC ( individual based coverage ).   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 Senior Crop Insurance Agent, Bruce Lantzky, walks through the basics of two supplemental crop insurance products, Supplemental Coverage Option (SCO) and Enhanced Coverage Option (ECO). Learn if these may be a good fit for your operation on top of your annual multi-peril policy. To discuss how this could have an impact on your crop insurance decisions, please visit fbn.com/MPCI . Audio Transcript Hello, my name is Bruce Lantzky I'm a crop insurance agent out of new Hampton, Iowa for FBN Crop Insurance. I just wanted to give you a little information on SCO and ECO supplemental coverage options as an enhanced coverage option. Supplemental coverage option is just that, it's a supplemental policy on top of your normal multi -peril policy which would insure you based on the county from where your multi-peril policy stops up to 86% of the expected county revenue. Enhanced coverage option is just that it's enhanced, it's up and above the supplemental coverage option. You can choose anywhere from 86 to 90 or 86 to 95% of the expected county revenue based on your local county. We have multiple tools available to help you determine whether or not you correlate very well with the county, and if you do correlate with the county, these products could be a very good fit for your operation. So feel free to contact us for more information. Resources USDA ARC/PLC Fact Sheet Farmdoc ARC/PLC Calculator Copyright © 2014 - 2023 Farmer's Business Network, Inc. All rights Reserved. The sprout logo, “Farmers Business Network”, “FBN” are trademarks, registered trademarks or service marks of Farmer's Business Network, Inc. We are an Equal Opportunity Provider. FBN Crop Insurance services are offered by FBN Insurance LLC (dba FBN Insurance Solutions Services LLC in Texas, and FBN Insurance Solutions LLC in California and Michigan) and are only available where FBN Insurance LLC is licensed. FBN membership is not required to purchase through FBN Insurance LLC, but certain features are only available to FBN members. FBN Crop Insurance is currently offered in the following states: AL, AR, AZ, CA, CO, FL, GA, IA, ID, IL, IN, KS, KY, LA, ME, MI, MN, MO, MS, MT, NC, ND, NE, NM, NV, NY, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WA, WI, WV, WY.