Kansas State University agricultural economists are urging farmers to proactively evaluate their options for federal farm and crop insurance programs.* Several deadlines are approaching for programs designed to offer financial assistance to growers.
Farm economist Robin Reid highlighted that the deadline for the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs has been extended to April 15 this year. The deadline for crop insurance applications remains March 15.
ARC provides payments to farmers when the actual revenue from their base crop acres falls below a guarantee based on historical yields and prices. PLC offers payments when the actual price for a covered commodity dips below its effective reference price. These programs, in place since 2014, aim to shield U.S. farmers from substantial income losses stemming from fluctuating crop prices or revenue shortfalls.
“One interesting factor going into farmers’ decisions on ARC or PLC this year is that we have higher prices as far as the benchmarks and guarantees than we’ve had in a long time,” Reid noted. “That’s because these prices are based on what has happened in the market for the last five or six years.”
Reid explained that the current election for ARC and PLC programs’ coverage for farmers is based on 2025 harvested crops. “So the marketing year for these crops does not start until further down the road.” For example, the marketing year for wheat begins June 1. The marketing year for corn, soybeans, and grain sorghum begins September 1 and extends until August 31, 2026.
“There are a lot of unknowns about where our commodity prices will go in that timeframe, and that’s what makes the current decision on ARC and PLC very difficult for farmers,” Reid elaborated.
K-State agricultural economist Jenny Ifft, who also holds the Flinchbaugh Agricultural Policy Chair in the university’s Department of Agricultural Economics, said farmers also have options to purchase county-level crop insurance in addition to their individual coverage. However, she cautioned that “they’re going to cost more” and frequently don’t trigger payouts until the year following harvest.
The Supplemental Coverage Option (SCO) begins to pay when a county-based loss falls below 86% of its expected level. The Enhanced Coverage Option (ECO), introduced in 2021, provides additional county-based coverage for a portion of the underlying crop insurance policy deductible. Farmers can choose an ECO that pays at 90% or 95% trigger levels.
“These programs are designed so that the producer comes out ahead in the long run, but you are going to be paying a higher premium, and might go a couple years without a payment,” Ifft stated. “The potential benefits are that if a producer wants a higher coverage level, using SCO or ECO can be more affordable than bringing your underlying policy up to an 85% coverage level. Also, the SCO and ECO are more sensitive to price declines, so they’re going to provide more price protection than underlying revenue protection policies that most producers use.”
Reid and Ifft recently discussed crop insurance options for farmers on the weekday radio program, Agriculture Today, produced by K-State Research and Extension. This broadcast is available online. They also presented on the topic during K-State’s Winter Wednesday Webinar series on February 12; a recording is available online.
Ongoing updates from K-State’s Department of Agricultural Economics, including information on crop insurance and other topics, can be found at https://agmanager.info.
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