SCO coverage also available

THIESSE, from pg. 15 al insurance, such as hail or wind insurance, may be required to insure against these types of losses. It is also important for producers to run “what if” scenarios when analyzing the comparison between enterprise units and optional units.

Many times, producers automatically opt for enterprise units every year, due to the lower premium cost per acre for similar coverage, while probably not totally understanding the differences in coverage between enterprise units and optional units. It is important to analyze the yield risk on each individual farm unit, when determining if paying the extra premium for insurance coverage with optional units makes sense. If a producer has uniform soil types and drainage, in a close geographical production historical area, and is primarily concerned with a price decline, a RP policy with “enterprise units” is probably a good option. However, if a producer has farm units that are more spread out geographical production historically, with more variation in soil types and drainage, and has greater concerns with yield variability, they may want to consider a revenue protection policy with optional units.

The Supplemental Coverage Option coverage is only available to producers who choose the Price Loss Coverage farm program option for the 2023 crop year. The deadline for 2023 farm program sign-up is March 15 — which is the same as the enrollment deadline for 2023 crop insurance. As a result, farm operators will need to consider SCO insurance coverage at the same time they are finalizing their 2023 farm program choice. The federal government subsidizes 65 percent of the premium for SCO coverage, so it may be a viable option for producers who choose the Price Loss Coverage farm program option.

SCO allows producers to purchase additional county-level crop insurance coverage up to a maximum of 86 percent coverage. For example, a producer that purchases an 80 percent revenue protection policy could purchase an additional 6 percent SCO coverage.

SCO is a county revenue-based insurance product somewhat similar to some of the area risk protection crop insurance products available. The calculations for SCO function very similarly to revenue protection insurance policies, since they utilize the same crop insurance base price and harvest price. The biggest difference is that SCO uses county level average yields, rather than the farm-level actual production history yields that are typically used for most revenue protection and yield protection policies. As a result, the SCO and revenue protection insurance policies may achieve different results.

The Enhanced Coverage Option (ECO) was a new crop insurance option in 2021 and will again be available for 2023. ECO provides areabased insurance coverage from 86 percent up to 95 percent coverage, utilizing county yields similar to SCO coverage. Producers can choose between 90 or 95 percent ECO coverage. Unlike SCO coverage, the purchase of ECO coverage is available with the selection of either the Price Loss Coverage or Agriculture Risk ARC-CO farm pro-