Maximize Your Crop Insurance

If you feel daunted by the decision of which crop insurance coverage is best for your farm operation, you’re not alone.

“I think it’s easier to rebuild a John Deere B tractor than to choose a crop insurance contract that works well with farm risk,” says Cory Walters, an ag economist at the University of Nebraska-Lincoln.

Yet as with any machinery repair, you can tackle the crop insurance question if you do your homework.

When it comes to managing risk on your farm in 2016, plenty has changed in a year.

At this time a year ago, producers were wrestling with the choice between Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC) programs introduced with the 2014 farm bill. Since then, some farmers received their first payments this fall under the five-year program.

“We have an idea of what farm bill program payments could be next year in terms of the ’15 crop, and they could be substantial,” says Brad Lubben, a public policy specialist at the University of Nebraska—Lincoln Extension. “But we also know that ARC and PLC do not provide farm-level protection.”

The two programs have delivered more than $5.2 billion in payments for the 2014 crop year but are based on county-level data. Experts caution against using them without other available safety nets. “If someone has a weak financial standing, they may need to buy more crop insurance, not less, because a bad event may force the sale of assets, possibly land,” Walters points out.

Avoid Outright Cuts
Even with prices below the cost of production, experts strongly advise against cutting back on crop insurance.

“If we are dealing with lower margins, we have higher risk, not less,” Lubben warns.

That’s because you could be gambling with your farm’s future. “It appears to me that lots of farmers make their decision based on cost, not on risk,” Walters says. “You have to balance the cost of that premium against the possibility of a bigger indemnity,” which your operation could end up needing this year.

Crop Insurance Deadlines in 2016
Note these dates as you finalize crop insurance decisions.

Jan. 31: Deadline to purchase whole-farm revenue protection in some counties. Other counties close on Feb. 28 or March 15.

March 15: Deadline to purchase crop insurance for many crops in key Corn Belt states.

Aug. 1: Last day to enroll in ARC/PLC for 2016 crop year.

Source: Alison Rice,

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