AgCountry Farm Credit Services / Prepare / December 2021
2022 Crop Insurance AND BEYOND
Written by: Rob Fronning, VP Insurance and Commodity Marketing Education After a year of widespread drought in our territory, I know the majority of our producers are asking themselves, “Did I buy the right crop insurance coverage last year?” It’s in years of poor production along with many insurance claims that we tend to look a little closer at what we did. Hindsight is always 20/20. A year of claims leads us to think we should have bought more while a year of good production has us asking, “Why did we buy insurance?” While every year we have new items to consider, we need to remember why insurance is one of the most important parts to a risk mitigation plan. When raising a commodity there is production risk, market risk, input risk, and demand risk. With all the new policies and options available, many of these risks can be mitigated to some extent.
allow our team to work through your options to identify the best fit for your operation. The tools will help our insurance specialists to better explain all of these products so you can make an informed decision. When looking at one specific crop, we found over 130 ways to use different options, strategies, and policies to insure that crop. Using a new tool called Optimum, we can sort the choices by your priorities, such as the highest number of guaranteed bushels to help with the forward contracting decision, or the highest revenue guarantee to cover the 2022 crop and protect your balance sheet. From there, we can narrow our focus and compare the top three or five choices available to you.
Optimum also brings into the discussion Supplemental Coverage Option (SCO) and Enhanced Coverage Option (ECO). Optimum helps you to determine if these products are a fit for your operation. All plans are county-based, which allows Optimum to compare county yields to your yields. This will provide you with a correlation, which is the measure of the relationship between At AgCountry, we have invested in training for our county and individual yields. Producers with crop insurance specialists and new tools that will stronger correlation may find the coverage offered Crop insurance is offering more choices than ever before, and some of your farm program decisions interlock with your crop insurance decisions. Understanding interactions and running calculations to identify the best set of farm programs and crop insurance products can be overwhelming.
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