The deadline to purchase crop insurance for corn and soybeans for the 2024 crop year is March 15. The 2024 Spring prices for corn and soybean will be reduced substantially from the base price levels last year; however, there still should be some favorable crop insurance guarantees again this year at reasonable premium costs. Producers have several crop insurance policy options to choose from, including yield-only (YP) and revenue protection (RP and RPE) policies, SCO and ECO policies, and other private insurance options. The cost of production for corn and soybeans in 2024 is still significantly higher than in recent years, due to much higher crop input costs for seed, repairs, labor, etc., as well as continued higher cash rental rates in many areas. This means that crop producers may need to increase their crop insurance coverage in 2024 in order to adequately cover the increased investment in the crop.

The crop insurance Spring base prices for 2024 revenue protection (RP) and yield protection (YP) insurance policies for corn and soybeans are determined during the month of February and are finalized on March 1. The estimated 2024 Spring base prices (as of 2-16-24) were $4.73 per bushel for corn and $11.72 per bushel for soybeans. The current 2024 base price estimate for corn compares to recent Spring base price levels of $5.91 per bushel in 2023, $5.90 per bushel in 2022, and $4.58 per bushel in 2021. The estimated 2024 Spring price for soybeans compares to recent base prices of $13.76 per bushel in 2023, $14.33 per bushel in 2022, and $11.87 per bushel in 2021. The 2024 crop insurance harvest price will be the average CBOT prices during October for December corn futures and November soybean futures, with the prices finalized on November 1, 2024.
Choosing crop insurance coverage is one of the more important risk management decisions that producers make each year. Following are some key items to consider when making 2024 crop insurance decisions:

There are a wide variety of crop insurance policies and coverage levels available.
Make sure you are comparing “apples to apples” when comparing crop insurance premium costs for various options or types of crop insurance policies, as well as recognizing the limitations and the differences of the various insurance products. 2024 Crop Insurance premiums for most coverage levels of corn and soybeans in the Midwest will likely be slightly less than 2023 premium levels, depending on the final Spring base price and the “volatility level”.

View crop insurance decisions from a risk management perspective.
Given the continued higher crop input costs in 2024 and tighter profit margins, it may be more important than ever to have adequate crop insurance coverage. A producer must decide: “How much profit margin reduction or potential dollar loss per acre do I want to risk if there are greatly reduced crop yields due to potential weather problems in 2024, and/or lower than expected crop prices by harvest time ?”

Take a good look at the 85% coverage level for added risk protection.
In many cases, the 85% coverage level offers considerably more protection, with a modest increase in premium costs. Many producers will be able to guarantee near $750.00 to over $900.00 per acre for corn, and near $500.00 to over $650.00 per acre for soybeans, at the 85% coverage level for 2024.

Use caution when considering RPE insurance policies to reduce premium costs.
If the “harvest price” (average CBOT price in Oct.) for corn or soybeans is lower than the “base price” (average CBOT price in Feb.), the RP and RPE payment calculations function similarly, and RPE premium costs are less than RP premiums. However, if the final “harvest price” exceeds the “base price”, which has occurred several times in recent years, there is considerable added risk in utilizing a RPE policy.

Consider the advantages of “Optional Units” vs. “Enterprise Units”.
Even though the premium cost to insure with “optional units” is higher than purchasing crop insurance with “enterprise units”, it may be worth considering the added investment for “optional units” in many instances. If a farm operator has several farm units that are spread out, with a fairly wide range of soil types and APH yields, “optional units” may provide a more comprehensive risk management approach in instances of drought or other weather disasters.

“Supplemental Crop Option” (SCO) insurance is available with the PLC farm program choice. Producers that choose the “Price Loss Coverage” (PLC) farm program option for 2024 have the option to purchase additional county-level SCO crop insurance coverage up to a maximum of 86 percent coverage. The SCO coverage fills the gap up to the 86% coverage level from the coverage level chosen by the producer (75%, 80%, 85%, etc.) for Yield Protection (YP) or Revenue Protection (RP) insurance coverage. For example, a producer that purchases an 80% RP policy could purchase an additional 6% SCO coverage. SCO calculations utilize the same base and harvest prices as traditional crop insurance policies; however, SCO utilizes county average yields rather than farm-level yields. As a result, SCO coverage in 2024 will be very similar to the ARC-CO farm program option. The SCO premium costs are quite reasonable, as the premiums are 65 percent subsidized by the Federal government.

The “Enhanced Coverage Option” (ECO) is another insurance option to increase coverage levels. ECO provides area-based insurance allowing producers to increase their coverage from 86 percent up to either 90 or 95 percent coverage. Similar to SCO insurance, ECO utilizes county-level yields and typical crop insurance prices; however, unlike SCO coverage, ECO is available with either the PLC or ARC-CO farm program choice. Producers can utilize both ECO and SCO together, in addition to their underlying RP or YP insurance policy. For example, a producer could have an 80 percent RP policy, carry SCO coverage from 80 to 86%, and carry ECO coverage from 86% to either 90 or 95 percent. It is possible for a producer to collect on an individual RP policy, but not collect on a SCO or ECO policy, or vice versa.

Evaluate other “buy-up” crop insurance options.
In addition to the government subsidized SCO and ECO county-based insurance products that allow insurance coverage up to 95 percent coverage, there are also “buy-up” private policies using farm-level yields up to 90 or 95 percent coverage. Private companies also offer separate wind and hail insurance endorsements. Of course, any of the “buy-up” or “add-on” insurance options add to the total premium cost. Producers need to ask: “What mix of crop insurance products provides me with the desired risk protection for my 2024 crop investment at a premium amount that I am willing to spend?”

Where to get more information on 2024 crop insurance alternatives.
A reputable crop insurance agent is the best resource to find out more details of the various crop insurance coverage plans, and premium quotes. Many crop insurance companies have some very good websites for details and information on various crop insurance policies. Kent Thiesse, Farm Management Analyst, has prepared an information sheets titled: “2024 Crop Insurance Decisions” To request a free copy of either information sheet, send an e-mail to: kentthiesse@gmail.com

Following are some other good web sites for crop insurance information:
> USDA Risk Management Agency (RMA) : http://www.rma.usda.gov/
> University of Illinois FarmDoc : http://www.farmdoc.illinois.edu/cropins/index.asp
> Kansas State University Ag Manager: https://agmanager.info/crop-insurance
> Iowa State University Ag Decision Maker: https://www.extension.iastate.edu/agdm/


Note — For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Phone — (507) 381-7960; E-mail — kentthiesse@gmail.com