Growers want to protect against a declining harvest price, which has led to quite a few recent discussions about the merits of county coverage, specifically the Enhanced Coverage Option (ECO). For those that only read the first paragraph of articles, the message is this - don’t dismiss ECO because it’s county coverage.
Let’s illustrate this point using a few scenarios from our exclusive Optimum tool. The examples shown below are Barnes County, North Dakota with 39 bushel APH soybeans, but would apply to all other crop counties with enterprise units because the subsidies are the same across the board.
Would you rather…
1. Spend $16.03 per acre on 75% Revenue Protection with ECO 95%/60% protection factor. The County Yields on this chart are relevant to net indemnity, because ECO indemnity is triggered by county yield.
Option 1 Takeaways:
- As an insurance specialist, I like this matrix because of the indemnities that kick in when the county comes in between 32 to 36 bushels. There are positive net indemnities whether the harvest price comes in at $16.88 or $11.00.
- You don’t want to exchange a hail policy for ECO coverage. The hail policy is still important in case you get smoked by hail, but the county yield is greater than 36.
OR
2. Spend $13.51 per acre on *80% Revenue Protection. The County Yields on this chart are not relevant to net indemnity.
Option 2 Takeaways:
- Option 2 would give you a Prevent Plant advantage over Option 1
- Option 2 might give you an Farm Service Agency program advantage over Option 1
Revenue Protection is individual revenue coverage insuring your yield at the higher of projected or harvest price. ECO is county revenue coverage insuring an 86%-95% band of expected county yield at higher of projected or harvest price. The claim trigger yield increases for RP and ECO when the harvest price is lower than the projected price. Decisions for RP and ECO must be made on or before March 15, 2023.
If you want to see how ECO compares with other options in your local area, contact your nearest AgCountry office and ask to speak with an insurance specialist. Our exclusive Optimum Crop Analyzer Tool will be able to run hundreds of simulations based on your unique information.
