U.S. expands insurance for corn, soybeans

More of Arkansas’ soybean and corn producers are eligible for federal margin protection insurance now that the U.S. Department of Agriculture Risk Management Agency has added hundreds of counties to its eligibility list in a plan expansion.

The agency recently added 1,255 counties for soybean growers and 1,729 counties for corn growers nationwide.

Margin protection insurance gives farmers coverage against an unexpected decrease in operating margin (revenue minus input costs). The Risk Management Agency uses county-level estimates of average revenue and input costs to establish the amount of coverage, according to the United States Department of Agriculture.

“Margin protection was not available for any counties in Arkansas beforehand, it was only available for rice in east Arkansas,” said Hunter Biram, extension economist for the University of Arkansas System Division of Agriculture.

“There are a few counties in the River Valley that are actually not able to get rice protection but they can get corn and soybean protection, which is kind of interesting because there is rice grown in the River Valley,” Biram said.

As far as how many new Arkansas counties will qualify for margin protection, there will be 46 new counties for corn and 47 new counties for soybeans, and 26 counties in east Arkansas are now eligible for rice, corn and soybeans, Biram said.

In 2023, of the 41,433 crop insurance policies sold in Arkansas, 48 policies included margin protection, “which highlights the relatively low uptake in margin protection,” Biram said.

The margin protection insurance expansion will be available by June 30 and interested producers have to purchase their insurance coverage by Sept. 30 for the 2024 crop year.

This will add margin protection insurance coverage in 22 states for soybeans and 34 states covered in total and will also make coverage available for corn in the contiguous U.S.

Margin protection is also available in select counties for rice in Arkansas, California, Louisiana, Mississippi, Missouri and Texas.

Margin protection was first implemented in the 2016 crop year to protect farmers when they experience lower than expected crop yields or commodity prices, or increased prices for farming inputs.

“Margins are still pretty thin this year in spite of lower fertilizer prices, relatively lower to what we saw last year, we’re seeing a large increase in interest expense, so in spite of those fertilizer prices coming down, now the margins are getting eaten up by interest,” Biram said.