Proactive Strategies for Business Success: Protecting your investment with crop insurance

While we can’t predict the future, we can certainly plan for the unexpected, and crop insurance is an important tool to help producers do just that. Ag businesses that are eligible for crop or livestock insurance should consider the value risk management tools can provide. So, what are the next steps for protecting your investment with crop insurance?

Determine coverage amount

When evaluating crop insurance options, the most important consideration is to look at your annual input costs and insure your crop for its value at planting.

For example, if it costs $700 per acre to put a crop in the ground, then should have it covered for at least $700 per acre. You may lose the ability to have a profit on that acre, but at least you won’t lose your entire investment.

Importance of production records

Keeping good production records helps substantially, especially if you have separate farms or tracts of land in different counties. Your crop insurance agent will find it helpful in planning for your insurance needs. The USDA Risk Management Agency looks at production data as well.

Evaluate coverage options

There’s more than one way to insure your crops, too. Farm Credit East’s team of crop insurance specialists at Crop Growers provides value by being knowledgeable about a variety of policies for all different crop types and disaster events that may yield a premium.

Producers are encouraged to look into the Supplemental Coverage Option (SCO) and Enhanced Coverage Option (ECO), which provide additional bands of coverage on top of an individual crop insurance policy. Both plans use area yields and revenue to determine loss, regardless of your farm’s actual production.

If you’re a dairy producer, be sure to talk to your livestock insurance agent about Dairy Revenue Protection (DRP), Livestock Risk Protection (LRP) or Livestock Gross Margin (LGM) coverage.

If you’re interested in learning more about Crop Growers from Farm Credit East, contact one of our crop insurance agents today.