By Scout Nelson
Agricultural economists at Kansas State University are advising farmers to carefully consider their options ahead of important deadlines for federal farm and crop insurance programs, which offer financial support. These deadlines include the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs, which have a new deadline of April 15 this year, extended by one month. The deadline for crop insurance applications remains March 15.
ARC offers payments to farmers when the actual county revenue for their base crop acres falls below a specified guarantee based on historical yields and prices. PLC provides payments when the price of a covered commodity drops below its reference price. Both programs have been in place since 2014, helping to protect U.S. farmers from significant income losses caused by fluctuations in crop prices or revenue shortfalls.
One notable aspect of this year’s decision-making for ARC and PLC is the higher benchmark prices used for calculating guarantees. These prices are based on recent market trends over the past five to six years, which have seen higher price levels. However, decisions for these programs are made in advance for crops harvested in 2025, with uncertainty about future commodity prices making it difficult for farmers to predict potential outcomes.
Farmers also have the option to purchase additional county-level crop insurance, though these options can be more expensive and often pay out in the following year after harvest. Programs like the Supplemental Coverage Option (SCO) and Enhanced Coverage Option (ECO) offer additional protection. SCO pays when county losses fall below 86% of the expected level, while ECO, introduced in 2021, provides coverage for a portion of the underlying policy deductible, with coverage levels of 90% or 95%.
While these additional coverage options can provide higher protection against price declines, they come with higher premiums, and farmers might not see immediate payouts. However, these options may be more affordable than increasing the coverage of the underlying policy.
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Categories: Kansas, Crops, Corn, Soybeans