Even with the spotty and sporadic rains this past summer, yields continue to surprise producers. If you had asked producers in July, many believed there would be yield losses that would be below a producer’s insurance guarantee. Another factor impacting producers this year was the insurance price drop between spring and harvest price for corn and soybeans. With this drop in price, producers with revenue insurance policies needed more bushels to cover the drop in price, otherwise their revenue protection policies would cover the revenue difference. As we look at yields this fall, we are finding many producers had shallow losses not above their deductible.
Enhanced Coverage Option (ECO) is a federally subsidized add-on insurance product that allows a producer to get band of coverage from 86%-90% or 86%-95% on top of their revenue protection policy. ECO is AREA BASED so a loss is triggered when actual county level revenue or yield falls below expected county’s trigger revenue or yield. If a loss is triggered, the loss will be paid based on producer’s APH. It is possible to have an ECO loss and no MPCI loss and vice versa.
The drop in price from spring to harvest for corn (17% drop) and soybeans (7% drop) may be enough to trigger an indemnity for ECO 95% as it is greater than 5% change in revenue. The other part of the equation to determine a loss for ECO is based on final county yields. Final area yields for 2023 will be reported on/ before June 16, 2024. Here is an example of what the yield would need to be below for a payment to trigger in 2023 for Dane County.
If you are interested in ECO or other add-on private products, talk to your agent. Your agent can find the right add-on product for you to achieve your risk mitigation goals.