Marketing Grain with Crop Insurance
CODAK Risk Advisory, LLC is not a licensed crop insurance agency and therefore is not authorized to sell or distribute crop insurance. This article is being distributed for informational purposes only and all questions should be directed to your insurance agent.
Margins are tight for the 2025 crop year, and many farmers are looking for ways to cut costs. Before you consider trimming crop insurance from your budget, let’s take a closer look. Crop insurance continues to evolve, both in terms of government involvement and the variety of products available. Here, the focus is on highlighting a few of those changes and how you can integrate your guarantees into your marketing plan.
Keep in mind, our government has tied crop insurance coverage levels to disaster relief programs. In my opinion, this is an acknowledgement by politicians that the current Farm Bill is no longer providing the safety net farmers nationwide truly need. For those of you who received payments from the 2020/2021 ERP program, you might recall the attached ERP factor table. It is believed that the Disaster Assistance program voted on at the end of 2024 will use similar factors to calculate payments for losses from 2023 and 2024.
ECO- Enhanced Coverage Option
As farm yields/expenses continue to rise, the demand for shallow loss coverage levels has gained traction. ECO is an area plan that offers coverage for the gap from 87% - 95%. However, if you’ve purchased Margin Protection, you are not eligible for ECO.
Since its inception, ECO has been subsidized at 44%, but in 2025, that subsidy will increase to 65%. This 21% jump in subsidies results in a 37.5% reduction in premiums for farmers. When you combine these savings, with the fact that many of the counties across the nation have seen increases in county expected yields, ECO is a product worth looking into.
Now, for those of you who don’t want to have your liability tied to your county’s final yield, several new or updated private products now offer individual coverage up to the 95% level.
I’d venture to say that most farmers in 2025 will use some form of crop insurance. Having the appropriate coverage level and unit structure is extremely important. I encourage you to go beyond using crop insurance for peace of mind—leverage it as a tool to strengthen your marketing plan.
To illustrate this, I’ve built the table below to show how changes in 5% coverage levels can impact both the bushels available for marketing and the revenue guaranteed. Since Spring price discovery has not yet begun, I’ve used recent futures prices for the calculations.
If you’ve read a few of our blog posts, you’ll likely see the value in making informed decisions as to when you set futures and/or basis. Just as the opportune time to lock in futures and basis rarely happens simultaneously, having confidence in a great crop rarely matches when the markets rally higher. Crop insurance is designed to help you avoid limiting your marketing opportunities to after harvest.
Below, I’ll demonstrate how taking advantage of strong markets during uncertain weather conditions can still be profitable. The first example considers a higher harvest price. Selling zero grain before harvest would have maximized profits in this scenario, but the challenge lies in managing risk and uncertainty in real time. A higher harvest price often becomes a key concern when yield losses occur.
Notice the total income in the example—it matches the gross expected income from selling futures, even though fewer bushels were produced. This accounts for the loss of unsold bushels and the associated marketing loss. Despite not hitting the market high, the final income exceeded the original revenue guarantee.
The second example shows the outcome of a lower harvest price combined with a yield loss. This scenario is the most profitable outcome when a claim occurs. The total income exceeds the original crop insurance guarantee due to market gain on bushels that weren’t produced. Crop insurance is designed to support, not penalize, good marketing decisions.
In conclusion, crop insurance is more than just a safety net—it's a critical tool for managing risk and enhancing profitability in your marketing strategy. As the agricultural landscape evolves, so do the opportunities to leverage crop insurance in innovative ways. Take time to evaluate your coverage options and integrate them into your overall farm plan. By doing so, you can position yourself to make confident decisions, protect your revenue, and capitalize on market opportunities, no matter what challenges the growing season may bring.
Kyle Adams
Crop Insurance Expert | Marketing Advisor, Eastern Corn Belt
With more than a decade of experience as a crop insurance agent, Kyle integrates our marketing strategies with crop insurance products to maximize both sets of tools, creating a well-rounded risk management program for our clients.
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