Important Crop Insurance Information for Clients of Compeer Financial
FALL 2025
CROP TALK In this issue: 2 | Your Crop Insurance Documents Are Available Digitally Online Renewals Holiday Office Closures Sign Up for Crop Insurance Text Notifications 3 | Strengthen Coverage, Control Costs: ARC, PLC, SCO & ECO in 2026 4 | Additional Livestock Risk Protection Options Now Available 6 | New Federal Tax Law: Key Ways the OBBBA Impacts Farmers 7 | With Passage of the OBBBA, the Work for the Crop Insurance Industry Still Must Continue 8 | Crop Outlook: Weather & Risk Webinar
ECONOMIC ATMOSPHERE, WEATHER PATTERNS IMPACT COMMODITY PRICES, FARM INCOME by Cole Patrick, Director of Insurance Strategies Market Implications: Modest Adjustments, But Supplies Still Heavy
up 9% from last year and well above spring intentions. Soybean acreage ended at 81.1 million, 7% lower than 2024.
After a one-month data gap, USDA’s November World Agricultural Supply and Demand Estimates (WASDE) release brought only modest changes to U.S. row-crop fundamentals.
Looking to 2026, producers may rebalance acres. Historically, when corn acres jump more than 6% in one season, acres tend to swing back toward soybeans the following year — especially true with tighter farm budgets and recent southern rust pressure.
For corn, the national yield was trimmed slightly to 186.0 bushels per acre — just 0.7 bushels per acre lower than September — while harvested area remained near 90 million acres. Production now stands at 16.75 billion bushels, still among the largest crops on record. Higher beginning stocks from September’s revisions pushed ending stocks to roughly 2.15 billion bushels. USDA raised the season-average farm price to $4.00/bushel, reflecting solid domestic use and steady exports, but overall supplies remain burdensome.
Weather challenges continued through summer. Heavy June-July rainfall was followed by a dry, warm August, causing localized stress and complicating yield forecasts. Meanwhile, climate models carry a 71% chance of La Niña developing by winter. If typical La Niña patterns trigger dryness in South America, a winter price bounce is possible as global markets react.
For soybeans, yield declined to 53.0 bushels per acre, reducing production to 4.25 billion bushels. USDA lowered exports by 50 million bushels and set ending stocks at 290 million. The average farm price rose to $10.50/bushel, indicating a somewhat tighter balance sheet than corn, yet still far from a bullish setup. Weather Impacts: Mixed Conditions Across the Corn Belt Growing-season weather varied widely. Parts of the eastern Corn Belt saw delays, contributing to shifts in prevent-plant acres. Corn preventplant dropped 32% from last year to 1.8 million acres, while soybeans rose 55% to 1.2 million. With mostly favorable early conditions and a corn-soybean ratio below the 2.5 trigger, farmers pushed corn acreage to 98.7 million,
Corn: Big Crop, Narrow Margins Despite a slight yield cut, corn supplies remain overwhelming. USDA raised exports to 3.1 billion bushels, thanks to strong movement to Mexico, Japan and Colombia. However, feed and ethanol use were unchanged, leaving demand growth minimal. Strong yields paired with flat prices emphasize the value of revenue protection and proactive marketing. Soybeans: Slightly Tighter, Still Competitive Production slipped 48 million bushels from September, and smaller beginning stocks helped balance reduced exports. The challenge is global competition. U.S. shipments to China remain well below last year, with Brazil maintaining dominance and continued on page 5 >>
Online Renewals Compeer Financial is committed to providing robust and secure online tools to help our clients get business done — where and when they want. That’s why we provide options for renewing your crop insurance policy. If you’re not making any changes to your crop insurance policy, your Compeer insurance officer can send you an email, enabling you to review your policy coverage from the past year and easily renew with a simple click. If you’re interested, please contact your Compeer insurance officer.
Offices Closed for Holidays Compeer Financial offices will be CLOSED on the following days in observance of upcoming holidays: Wednesday, December 24, at noon in observance of Christmas Eve Thursday, December 25, in observance of Christmas Day Thursday, January 1, in observance of New Year’s Day Monday, January 19, in observance of Martin Luther King Jr. Day
Sign Up for Crop Insurance Text Notifications Scan the QR code or visit compeer.com/cropinstext >>
YOUR CROP INSURANCE DOCUMENTS ARE AVAILABLE DIGITALLY We all accumulate paperwork throughout the year. To help you reduce this pile while maintaining access to your crop insurance information, Compeer Financial provides your crop insurance documents online through the MyCompeer portal. With MyCompeer, you can enjoy the convenience of secure online access. MyCompeer is accessible 24 hours a day from your desktop, tablet or smartphone. Crop insurance documents available on MyCompeer include:
• Confirmation of Coverage • Schedule of Insurance • Approved Production History You can also view your policy coverage on the MyCompeer page. Enrolling in MyCompeer is a swift and straightforward process. Scan the QR code, visit compeer.com/mycompeer or call (800) 705-6603. Third-Party Access Providing third-party access to your crop insurance documents is a hassle-free process. Your Compeer insurance officer or our service team can help you complete the required form. Once enrolled and authorized, the third party can easily and securely access your crop insurance documents at their convenience. Opt Out If you wish to opt out of electronic document delivery or are currently receiving a mailed copy and prefer a completely digital approach, please get in touch with your Compeer insurance officer or call us at (844) 426-6733.
Loan Clients — Act Now! All patronage payments will be processed via direct
deposit starting in August 2026. Complete this required enrollment today to make sure you don’t miss a single payment. To sign up for patronage direct deposit, log in to your MyCompeer account and navigate to Tools & Forms, call our client care team at (844) 426-6733 Monday-Friday from 7:30 am to 5:00 pm, or visit your local Compeer office in person. 2 CROP TALK
Fall 2025
Projected USDA Farm Program Payments Major Title 1 Commodity Programs for 2025/26 Crop Year
STRENGTHEN COVERAGE, CONTROL COSTS: ARC, PLC, SCO & ECO IN 2026 In today’s tight farm economy marked by weak commodity prices and slim margins, producers are seeking ways to boost insurance protection while controlling costs. Although per-acre input costs are expected to rise in 2026, crop insurance premiums may hold steady or even decline — a welcome relief when every dollar counts. ARC and PLC: Updated Tools for a Changing Market Uncertainty for 2026, including an undetermined spring price, makes the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) decision more complex. Administered by the Farm Service Agency (FSA), both programs were less appealing in recent years due to low reference prices. The One Big Beautiful Bill Act (OBBBA) revitalized them by raising reference prices, adjusting benchmark formulas and adding 30 million base acres to the program. The OBBBA allowed producers to receive the higher of the ARC or PLC payment this year. But for 2026, you must elect one. These programs remain valuable complements to crop insurance, offering additional protection in a volatile environment. However, neither ARC nor PLC provide enough standalone coverage — they work best when paired with products like the Supplemental Coverage Option (SCO) or Enhanced Coverage Option (ECO). Making A Decision for 2026 ARC provides county-based revenue coverage at 90% of the benchmark, using Olympic average yields and prices to calculate potential revenue losses. PLC, by contrast, protects against price declines below the effective reference price based on the marketing year average price finalized each August. Historically, selecting SCO required enrollment in PLC. Under the OBBBA, producers can now combine SCO with either ARC or PLC. Keep in mind: both ARC and SCO include yield components, while PLC only addresses price risk. Additionally, ARC payments are based on farm base acres, while SCO applies to planted acres — an important distinction for maximizing protection.
2026 Reference Prices (unless a new Farm Bill is passed) Corn
• ARC: $5.03
(90% = $4.53)
• PLC: $4.42 Soybeans
• ARC: $12.17
(90% = $10.95)
• PLC: $10.71
Similar to Revenue Protection, ARC-County uses a benchmark yield multiplied by the Olympic average price to determine benchmark revenue. In simplified terms, yield x price = revenue. For a payment to trigger, county revenue must fall more than 10% below that benchmark, whether from lower yields, lower prices or both. If county yields have grown more than 5% above benchmark levels, PLC may offer stronger protection. Even though ARC-County has a higher price guarantee, don’t forget to compare that price with county yields trends. If you expect lower yields than the benchmark, ARC could provide better coverage. If you think anticipate higher yields, then PLC might be the more strategic option. 2026 SCO and ECO: Higher Subsidies, Lower Cost While final 2025 ECO payments are still being calculated, 2024 levels were at near record highs, underscoring the value of these county-based tools. The map below illustrates the loss ratio (ratio of total indemnity payments to total premiums paid). 2024 ECO Loss Ratio for Corn and Soybeans Combined Total U.S. Loss Ratio Aggregate = 0.82 or 82%
The OBBBA further strengthened SCO and ECO by setting both at an 80% premium support level for 2026 — meaning
*Other covered commodities include barley, oats, dry peas, lentils, chickpeas and other oilseeds. Sources: USDA ERS, USDA NASS, USDA FSA, Terrain
farmers only pay 20% of the premium. That’s more than a 40% reduction from 2025 costs and a major shift following the previous increase from 44% to 65%, which already drove a surge in participation. SCO and ECO trigger payments based on county yield or revenue, so expected county yields and prices directly affect coverage. Many counties have seen yield growth of 20% or more since 2018, enhancing the responsiveness of the county products. The OBBBA also raised base policy premium support by 3-5%, lowering overall premium costs and making layered protection through ECO and SCO an increasingly cost-effective way to safeguard against volatile markets and rising input costs. Making Smart Coverage Decisions Take time to compare ARC, PLC, SCO and ECO carefully as you plan for 2026. Each program covers different layers of risk and, together, can strengthen your financial safety net without significantly raising total insurance costs. Given today’s tight margins, aligning your farm’s risk management strategy with updated premium support levels and reference prices can yield meaningful savings and protection. Partner with your Compeer insurance officer to model scenarios for your operation and design the optimal coverage mix for next year’s growing season. Fall 2025
CROP TALK 3
ADDITIONAL LIVESTOCK RISK PROTECTION OPTIONS NOW AVAILABLE Whether you’re marketing feeder cattle, fed cattle, swine or — new in summer 2025 — cull cows and dairy-beef cross calves, Livestock Risk Protection (LRP) helps safeguard your revenue in a cost-effective way.
Feeder Cattle, Fed Cattle & Swine Coverage LRP provides producers with flexible, market-based options that allow them to better manage price risk while still benefiting if market prices move in their favor. As a reminder, here are the additional LRP options.
The following additional coverage options could not have come at a better time with the increasing revenue that these animals contribute to a dairy’s bottom line: Dairy Cull Cows Provides targeted protection for farmers marketing dairy cull cows sold for slaughter.
• • • •
Coverage period: 13 weeks from effective date Target weight range: 800-1,500 pounds Sales records will be required in the event of an indemnity Actual ending value is based on the Feeder Cattle Index, which is multiplied by a price adjustment factor to reflect seasonality and the difference in cash cull cow prices compared to the Index
Unborn Calves Designed for dairy-beef cross calves sold off the farm within two weeks of birth. Note that purebred dairy calves are not eligible.
Feeder cattle coverage is typically used by cow-calf producers and backgrounders marketing lighter-weight animals under 1,000 pounds. These policies offer flexibility with coverage periods ranging from 13-52 weeks, and actual ending values are based on the CME Feeder Cattle Index to reflect market trends at the time of sale.
• Target weight range: 60-99 pounds • Settles off the Feeder Cattle Index with a dynamic price
adjustment factor that reflects real-time market conditions • Requires sales records in the event of an indemnity, but not individual weights Like always, your Compeer insurance officer is just a phone call away. We’re here to work with you one-on-one to make sure your coverage aligns with your marketing plans and financial goals.
Scan the QR code to learn about our Livestock Insurance Analyzer tool >> compeer.com/insurance-analyzer Reach out to your local Compeer insurance officer to request access. 4 CROP TALK
Fall 2025
Fed cattle protection, on the other hand, is tailored for feedlot operators finishing cattle that will weigh over 1,000 pounds at harvest. This option also offers coverage periods ranging from 13-52 weeks, with actual ending values based on AMS weekly cash price data.
For swine producers, LRP coverage is available for hogs weighing between 189-351 pounds at the time of slaughter. Whether you’re raising pigs in a farrow-to-finish or wean-tofinish operation, this option offers protection that typically tracks closely to CME Lean Hog Futures, with coverage lengths ranging from 30-52 weeks for unborn swine and 13-30 weeks for all other swine.
2026 OUTLOOK (cont’d from page 1) Argentina regaining export footing. Still, strong domestic crush margins support steady U.S. demand, providing a buffer against softer exports. Market Outlook The November WASDE confirmed the prevailing 2025 narrative: record-large corn supplies, steady soybean output and cautious demand growth. Markets remain in a holding pattern, awaiting a new catalyst — likely weather shifts in South America or changes in global feed and energy demand. For crop insurance and marketing strategy:
• Lock in profits when they appear. Use modest rallies to
secure margins and manage basis. • Protect revenue, not just yield. With strong yields and soft prices, revenue coverage is essential. • Stay flexible. La Niña may add volatility; be ready to adjust marketing plans. • Watch global trends. Renewable fuels, livestock feed demand and new export markets will shape long-term opportunity. Bottom Line The November report didn’t deliver the bullish correction many anticipated. In the months ahead, success will rely on patience, disciplined marketing and robust insurance coverage. With high yields but weak prices, the focus shifts from production optimism to margin management — a critical factor for profitability heading into the 2025-26 marketing year. Income Levels: Margin Pressure Despite Support Record yields, rising ending stocks, uncertain trade flows and historically high production expenses continue to pressure margins. Farm production costs for 2025 are projected at $467 billion, up 31% since 2020, with season-average prices projected at $3.90 corn and $10.00 soybeans. Even so, USDA projects 2025 net cash farm income at $180.7 billion, up more than 25% from 2024 when adjusted for inflation. Much of this improvement comes from government support and livestock profitability. Emergency programs — including ECAP, ELRP, SDRP and MASC — are expected to contribute over $30 billion in payments. The One Big Beautiful Bill Act (OBBBA) enhanced the safety net through higher subsidy levels, updated ARC/PLC reference prices, expanded Beginning Farmer and Rancher provisions and improved crop insurance premium support. Yet, University of Illinois farmdoc estimates show many operations hovering near breakeven once land costs are included. Government aid has helped maintain farm income above long-term averages, but underlying profitability remains tight.
Track your profitability with our
GRAIN MARGIN MANAGER Scan the QR code or visit compeer.com/grain-margin-manager
Compeer Financial remains committed to helping producers navigate volatility with lending, planning and risk management tools. Markets will shift. Weather will test. Compeer will continue to support clients through every cycle. Fall 2025
CROP TALK 5
NEW FEDERAL TAX LAW: KEY WAYS THE OBBBA IMPACTS FARMERS by Eric Schmidt, Christina Plummer and Dan Coulthard, Managers — Tax & Accounting The One Big Beautiful Bill Act (OBBBA) brings significant changes to federal tax law — many with direct impacts on agricultural operations and rural communities. Farm Operation Impacts 1. Full Expensing for Equipment, Machinery & Farm Structures OBBBA restores and makes 100% bonus depreciation permanent for qualified business property. This means you can immediately deduct the full cost of new and used equipment placed in service after Jan. 19, 2025. The new provision also allows first-year expensing for certain nonresidential property if placed in service after July 4, 2025. 2. Installment Payment Option for Capital Gains on Farmland Sales If you sell qualified farmland property to a qualified farmer, you may elect to pay the resulting capital gains tax in four equal annual installments rather than all at once, provided the property remains in agricultural use for at least 10 years after the sale. 3. Expanded Deductions & Credits for Rural Activities The Section 179 expensing limit was increased for small businesses
6 CROP TALK
Fall 2025
to $2.5 million (with a $4 million phaseout threshold) indexed for inflation, allowing more immediate write-offs for equipment purchases. It also permanently increases the state and local tax (SALT) deduction cap to $40,000 through 2029. But be aware of the phase down-for high incomes. After 2029, this deduction reverts to $10,000. 4. Immediate Deduction for Domestic Research & Development OBBBA now allows full and immediate expensing of domestic research and development (R&D) expenditures, including on-farm research and innovation. This change is effective for tax years beginning after Dec. 31, 2024, and includes a catch-up deduction for unamortized expenses from 2022–2024. 5. Permanent Estate & Gift Tax Exemption Previously set to expire on Dec. 31, 2025, OBBBA made permanent the amounts for the federal estate and gift exemption. For 2025, the exemption is $13.99 million per single taxpayer. Further, it established this exemption at $15 million per single payer in 2026, following with inflation index adjustments beginning in 2027. This provides stability relative to creating strategies for longer-term planning in succession and transition plans of your farm operation. Be sure
to discuss with your tax professional. Personal & Other Business Impacts In addition to these changes that will impact your farm business, there are personal and other business impacts you should be sure to consider including:
• Temporary Senior Deduction • Interest Deduction on New Vehicle Loans
• Tax Cuts and Jobs Act Federal Tax Code Changes Made Permanent
• IRS Electronic Payment Requirement The OBBBA opens new doors for ag-focused tax strategies, long-term planning and growth. Whether you’re already working with us or exploring options, Compeer Financial's tax and accounting team is here to help you navigate it all with confidence. Scan the QR code to read the full article on these federal tax changes.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Tax and accounting services provided by members of Compeer Financial’s Tax and Accounting division. Compeer Financial does not provide legal advice or certified financial planning. You should consult your own tax, legal and accounting advisors before engaging in any transaction or tax return filings.
WITH PASSAGE OF THE OBBBA, THE WORK FOR THE CROP INSURANCE INDUSTRY STILL MUST CONTINUE by Ben Duncanson, Senior Legislative Affairs Consultant As the year wraps up, we still find ourselves without a new Farm Bill. Congress extended the remaining provisions of the 2018 bill for another year as part of the agreement to reopen the government in early November. These are the “remaining provisions” because several crop insurance and other improvements and reforms were already passed earlier this year through the One Big Beautiful Bill Act (OBBBA), outside the traditional Farm Bill process. Changes to the Crop Insurance Program from OBBBA Much has already been written about these changes in detail, but below is a brief summary: • Expanded eligibility for the Beginning Farmer Rancher premium discount from five to 10 years. • Increased Whole-Farm Revenue Protection coverage levels from 85% to 90% • Raised Supplemental Coverage Option (SCO) coverage levels from 86% to 90%, starting in crop year 2027, and increased the premium support level to 80% — bringing it in line with the Stacked Income Protection Plan (STAX) program. » SCO will now also be available to producers regardless of whether they selected Agriculture Risk Coverage or Price Loss Coverage as their Title I program choice. » This subsidy increase will also apply to similar coverages to SCO, including the Enhanced Coverage Option, Margin Coverage Option, Hurricane Insurance Protection — Wind Index (HIP-WI) and Fire Insurance Protection — Smoke Index (FIP-SI), according to the Risk Management Agency (RMA). • Increased premium support levels for many underlying MPCI coverage options to make them more affordable for producers in certain parts of the country to purchase higher coverage levels. See chart below from the RMA with details. Premium Support by Coverage Level 50%
55%
60%
65%
70%
75%
80%
85%
Optional Unit
67%
69%
69%
64%
64%
60%
51%
41%
Basic Unit
67%
69%
69%
64%
64%
60%
51%
41%
Enterprise Unit
80%
80%
80%
80%
80%
80%
71%
56%
Congress authorized these change through FY31, aligning with the anticipated reauthorization of the next five-year Farm Bill — if lawmakers can pass the remaining titles and provisions this Congress, something we have been strongly advocating for at Compeer Financial. Reminder: We Are Only Halfway There Much has changed since the 2018 Farm Bill, including a significant rise in input costs across agriculture and the broader U.S. economy. Passing the remaining titles would give farmers greater certainty and flexibility as they face another
year of tight margins. While we appreciate that Congress addressed several safety net programs updates through the OBBBA, the remainder of the critical programs that would normally make up a Farm Bill must also be addressed/modernized for producers to receive the full benefits of the legislation as intended. Provisions like higher FSA loan limits, which could not be included in the OBBBA, would also greatly help farmers during this downturn — especially beginning farmers who have lower equity positions — as it would give them and their lenders a greater amount of flexibility to manage debt through the cycle. As we discuss the work required to prepare these crop insurance reforms for the next crop year it is also important to remember that Congress, in addition to the administration and industry, still has work to be done on this Farm Bill. What Comes Next for Crop Insurance? Now that Congress had enacted these crop insurance reforms through the OBBBA, the work now shifts to USDA/RMA to work with their insurance partners to implement these changes — a step as critical in many cases as passing the legislation itself. The recent shutdown cost RMA and others more than 40 working days, echoing the delay that followed the 2018 Farm Bill, yet there should still be enough time to meet the deadlines set by Congress. Even so, our industry must stay closely involved to help ensure these changes deliver their intended benefits to producers while also continuing to strengthen the program for Approved Insurance Providers (AIPs), agents, policyholders and taxpayers. These updates reinforce that crop insurance remains the primary safety net tool many farmers and ranchers rely on to manage their risk. With its long record of success and a strong public/private partnership, Congress continues to view crop insurance as essential to supporting U.S. agriculture and national food security. Beyond the other elements of the OBBBA, these improvements to the farm safety net will help farmers navigate the current economic downturn, from oversupply to tariff-related demand impacts, as the changes take effect next year. Congress must now pass the remaining Farm Bill titles to provide producers with greater certainty. And it is up to us in the crop insurance industry to ensure America’s farmers and ranchers fully realize the benefits of the reforms already in place.
Fall 2025
CROP TALK 7
2600 Jenny Wren Trail PO Box 810 Sun Prairie, WI 53590 COMPEER.COM | (844) 426-6733 #CHAMPIONRURAL
Compeer Financial, ACA is an Equal Credit Opportunity Lender and Equal Opportunity Provider and Employer. ©2025 All rights reserved. USDA is an equal opportunity provider and employer. To file a program discrimination complaint, complete the USDA Program Discrimination Complaint Form, found online or at any USDA office, or call (866) 632-9992 to request the form. You may also write a letter containing all of the information requested in the form. Send your completed complaint form or letter by mail to the U.S. Department of Agriculture, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue, S.W., Washington, D.C. 20250-9410 or email to program.intake@usda.gov.
Mark your calendar!
Crop Outlook: Weather & Risk Wednesday, February 25 | 10am–12pm Weather Outlook with Matt Reardon Sr. Atmospheric Scientist, Nutrien Ag Solutions
Navigating weather extremes and the growing season ahead
Register Today
Risk Management Update with Compeer Financial team Cole Patrick, Director of Insurance Strategies Brandon Pezanoski, State Insurance Product Officer Spring crop price announcements, ARC/PLC elections and more
compeer.com/crop-insurance-updates