HAVANA, Ill. - Currently, budgets for corn and soybean production by Illinois Farmers is projected to be below breakeven on profitability. University of Illinois Farmdoc budgets can be found here: farmdocdaily.illinois.edu/2024/01/revised-2024-crop-budgets
Federal Crop Insurance can be used as an effective tool to protect farm operations from yield and/or price loss.
Farmers often select Revenue Coverage (FCS) @ 75% to 80% coverage due to premium savings on the Federal Crop Insurance. In 2025, farmers should highly consider using 85% coverage to protect against loss. In addition, subsidies have been greatly increased on the Enhanced Coverage Option (ECO) for Federal Crop Insurance which boosts loss coverage from 85% to 95% if selected.
Individual policies cover individual farmer’s crop revenue from yield and price losses. However, ECO uses the county yield average to compute losses above the 85% guarantee from standard coverage to 95%. ECO payments will not be based on your farm, but the performance of the county average yield. This is not perfect coverage for your farm but provides additional coverage at a highly subsidized rate.
During challenging times, it is human nature to cut costs. An increased cost for income protection by purchasing higher levels of insurance may be very well worth the reduced risk of lower profits from further price erosion or reduced yield due to weather.
Given the current political climate and international relation challenges, the Enhanced Coverage Option should be highly considered. The road you choose for protection may have a significant positive impact.
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PHOTO CAPTION: Federal Crop Insurance can be used as an effective tool to protect farm operations from yield and/or price fluctuations. University of Illinois Extension Farm Business Management and Marketing Educator Kevin Brooks weighs in on details to guide in that decision making process.
Photo by Kevin Brooks
University of Illinois Extension develops educational programs, extends knowledge, and builds partnerships to support people, communities, and their environments as part of the state's land-grant institution. Extension serves as the leading public outreach effort for University of Illinois Urbana-Champaign and the College of Agricultural, Consumer and Environmental Sciences in all 102 Illinois counties through a network of 27 multi-county units and over 700 staff statewide. Extension’s mission is responsive to eight strategic priorities — community, economy, environment, food and agriculture, health, partnerships, technology and discovery, and workforce excellence — that are served through six program areas — 4-H youth development, agriculture and agribusiness, community and economic development, family and consumer science, integrated health disparities, and natural resources, environment, and energy.