Amid historically high input costs and slumping commodity prices, farmers are no doubt looking for ways to trim expenses heading into the 2025 season.  

But pulling back on crop insurance may not be a savvy option right now, according to Tony Jesina, senior vice president with Farm Credit Services of America. 

“This is not the time to save your way to prosperity when it comes to your only protection that guarantees revenue,” he says. “I would look at other areas of the operation before I’d look at cutting back on my risk management plan.” 

More options 

Most farmers are familiar with (and use) the Federal Crop Insurance Program offered through USDA’s Risk Management Agency. In fact, FCIP participation between 2000 and 2022 was 81% across all eligible acres.  

But over the past decade, a trio of area plan options emerged to boost the percentage of losses covered from 85% up to 95%. Those include: 

Jesina says these products were developed in part because of disastrous losses incurred from the historical 2012 drought. 

“The Risk Management Agency wasn’t just sitting round saying, ‘We’re bored and need more work,’” he says. “These plans were developed because there is a demand or desire from producers.” 

MP provides coverage against unexpected decreases in operating margins. It can be purchased by itself or added to a base multiple-peril crop insurance policy.  

ECO and SCO cover yield or revenue losses. They can only be paired with an MPCI policy. 

When considering if an area plan is right for your operation, first ask these questions, Jesina says: 

“For producers who don’t like having so many dollars at risk, they might prefer to pay a little more now and create a better floor under their operation,” Jesina says. “Taking more risk in a tight- or negative-margin environment is usually not good. Because when disaster hits, you’re really playing with fire.” 

Cost of production 

Knowing you can cover your cost of production can also give a much-needed confidence boost to take advantage of forward-pricing strategies, he says.  

Also, avoid making an emotional decision about insurance, Jesina says. If it hasn’t paid out in past years, that doesn’t mean it was necessarily a bad decision. 

“I’ve paid for life insurance for 35 years,” he says. “And I’m thankful we haven’t collected on that yet — of course! But now is not the time to scrimp on it.” 

Decisions regarding margin protection coverage must be made by the end of September, while deadlines for enhanced and supplemental coverage options don’t hit until mid-March.