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Tough decisions around crop insurance and farm programs in 2024

A crop insurance specialist says customers were focused on protecting revenues when selecting risk management tools this year.

Lee Waters, a vp of crop insurance with Farm Credit Illinois based in east-central Illinois, tells Brownfield…

“You know we do have lower input costs for corn this year, but a couple billion extra bushels of corn sitting around that we don’t have a home for right now,” he says, “so a lot of worry of lower prices if we have another big crop and so a lot of people were mainly focused on protecting that.”

Waters says the lower prices led to more in-depth discussions of the ARC & PLC programs…

“This year, on the other hand, the five-year olympic average price for ARC county is $4.85.”  He says, “What we saw people do is Enhanced Coverage Option (ECO) is the first line of defense on price drop; maybe yield ARC county is the second line of defense; and then the backstop is your own coverage.”

Revenue protection prices for corn came in at $4.66 per bushel, while the soybean projected price was $11.55 per bushel.  Wheat was $6.85 per bushel.  All well below last year’s prices.

He says the soybean insurance prices were still profitable.

“Soybeans I personally saw a little pullback on coverage.”  He says, “$11.55 we’re still in the money on profit I think at that level.  A lot of people were probably be a little more aggressive on the hail side and took a basic bean package.”

He says ECO was also a popular choice this year…

“We had some people taking that last year already in my book of business, which that’s going to work very well from the ‘23 crop, due to the large decline in price.”  He says, “I think a lot of us were looking at that again this year, looking at our $4.66 corn price and going ‘OK, I think our first line of defense is setting a 95% floor against that.’”

AUDIO: Lee Waters, vice president of crop insurance, Farm Credit Illinois