How to Choose the Right Crop Insurance for Your Farm

When it comes to protecting your farm, crop insurance is one of the most important decisions you’ll make. Matching your farm’s risks, weather, yield variability, and market volatility, to the right type and level of protection can make all the difference.

Mike Bristle here, Crop Insurance Specialist at Citizens Alliance Agency, to share practical insights to help you evaluate your options and choose coverage that fits your operation.

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Key Factors to Consider When Purchasing Crop Insurance

1. Type of Coverage

Different policies protect against different risks:

• Yield Protection (YP): Covers losses from low yields due to natural causes (drought, hail, disease, etc.). Good for farms with stable prices but variable yields.

• Revenue Protection (RP): Covers both yield loss and price decline. Most popular option for corn and soybean producers in Minnesota.

• Catastrophic (CAT) Coverage: Lowest-cost option (heavily subsidized). Only covers extreme losses (50% yield loss at 55% of price). Often insufficient for commercial operations.

• Area-Based Plans (ARPI, SCO, ECO): Triggered by county-level losses, not your individual farm’s loss. Useful as supplemental coverage to individual policies.

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2. What’s Available in Your County

Not all crops or coverage levels are available everywhere. Availability depends on USDA Risk Management Agency (RMA) programs. For Chippewa County, MN, and surrounding areas, common insurable crops include:

• Corn

• Soybeans

• Dry beans

• Sugar beets

• Wheat

• Forage crops

  (Specialty crops may have limited or no coverage.)

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3. Coverage Level & Premium Cost

Coverage is chosen in 5% increments (50%-85%).

• Higher coverage: Costs more, reduces deductible, provides more stable revenue.

• Lower coverage: Cheaper, leaves more risk on the farm.

  Tip: Many Minnesota producers choose 75-85% RP because of price volatility and weather risk.

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4. Your Farm’s Risk Profile

Consider:

• Historical yield variability

• Soil type and drainage

• Irrigation vs. dryland

• Weather patterns (MN = high hail, wind, and wet spring risk)

• Market exposure (forward contracts increase revenue risk)

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5. Your Financial Situation

Crop insurance is a financial tool. Think about:

• Cash flow needs

• Loan requirements (many lenders require insurance)

• Ability to absorb losses without insurance

• Marketing strategy (hedging + RP often works well)
  

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6. Recordkeeping & APH (Actual Production History)

Your APH determines your guaranteed yield.

• Accurate records = better coverage.

• New farmers: Transitional yields (T-yields) may apply.

• Beginning farmers may qualify for premium discounts.
  

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7. Supplemental Options

Fill gaps in your base policy:

• SCO (Supplemental Coverage Option): County-based coverage from your deductible up to 86%.

• ECO (Enhanced Coverage Option): Covers from 86% up to 90% or 95%.

• Private products: Hail, wind, replant, and production cost insurance.

  
  

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8. Choosing the Right Agent

Crop insurance is sold only through licensed agents, not directly by USDA.

A good agent helps you:

• Compare policies

• Understand county rules

• File claims correctly

• Optimize coverage for your operation

  
  

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Ready to Protect Your Farm?

Come see us at Citizens Alliance Agency to review your federal crop insurance options and find the coverage that fits your farm best.

Contact Mike Bristle at (507) 530-2303 today!