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Crop Insurance Series: Private Products · Professional Ag Marketing Podcast

• 0:01
  SPEAKER_00: Welcome to the Professional Ag Marketing Podcast.
• 0:04
  SPEAKER_00: If you want a deep dive into the ag markets and risk management strategies, your search is over.
• 0:10
  SPEAKER_00: Come here after every Friday to get your weekly commodity recap.
• 0:14
  SPEAKER_00: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 0:21
  SPEAKER_00: This is your host, Mike Minor.
• 0:22
  SPEAKER_00: Let's get started.
• 0:24
  SPEAKER_01: Welcome everybody to the Professional Egg Marketing Podcast.
• 0:27
  SPEAKER_01: I am your guest host today, Lucas Peters, and I'm kicking off our 2025 Crop Insurance Decision Time Series, where we're going to take five different topics and record a short podcast on each topic.
• 0:41
  SPEAKER_01: The topics this year we're going to cover changes and updates for the program for 2025.
• 0:47
  SPEAKER_01: We're going to take a podcast and look at ECO coverage in 25, the ARC PLC decision, some add-on private products for crop insurance in 25, and then review some of the government program payments that got announced at the end of the year that will be hitting the farm country here in 2025.
• 1:06
  SPEAKER_01: Thanks for joining us and let's get started.
• 1:09
  SPEAKER_01: One of the topics I get asked a lot about are private products available on crop insurance.
• 1:17
  SPEAKER_01: So these are unsubsidized products that are different company to company.
• 1:23
  SPEAKER_01: The uh, you know, subsidized products, YP, RP, ECO, SEO, margin protection, PRF, all those products are subsidized by the government.
• 1:33
  SPEAKER_01: So they're the same price no matter what company or agency you're buying, they work the same way, and it's uh it's a nice nice product and a nice availability that there are no differences.
• 1:45
  SPEAKER_01: Uh everybody's on the same playing field.
• 1:48
  SPEAKER_01: Uh, one way that uh you can kind of differentiate your uh coverage from what everybody else has is to use these private products.
• 1:56
  SPEAKER_01: And so each company has a suite of different products they're looking at, and they're using a lot of these products are used as sales tools uh to get uh get you in the door and start quoting and and looking at how they might fit your farm uh each year.
• 2:12
  SPEAKER_01: Uh, they aren't bad products, um, and they can offer protection, especially if you are somebody that's looking to take risk off the table uh for the coming year.
• 2:22
  SPEAKER_01: And so one of the more popular products you're gonna hear about uh this year uh is going to be tied to ECO.
• 2:30
  SPEAKER_01: So we talked about ECO on an earlier episode, uh ECO subsidy level being increased, premium level going down, coverage remaining the same.
• 2:39
  SPEAKER_01: Uh, you can get that 95% coverage on a subsidized product.
• 2:44
  SPEAKER_01: Looks like a pretty good deal for 25, but one of the uh biggest hiccups or or watch outs we have with ECO is that it is county-based coverage, meaning the county is going to have to have a loss in revenue in order for ECO to trigger with that revenue either being price or yield.
• 3:04
  SPEAKER_01: And of course, that uh creates a little bit of an issue if maybe your specific farm has a problem, has a hail storm, uh, gets planted late, or or something happens where your yield isn't as high as you'd like it to be, and the rest of the county does really well.
• 3:20
  SPEAKER_01: Well, then the ECO coverage likely won't pay, and you might have a specific issue on your farm.
• 3:27
  SPEAKER_01: Uh, maybe it's not bad enough where your standard 85-80% coverage policy would pay, um, but it's not uh widespread enough where that 95% county coverage from ECO will pay.
• 3:40
  SPEAKER_01: That's where the private products can help you out.
• 3:43
  SPEAKER_01: And so, like uh the popular um products that they're tying to ECO, you might hear them called as ECO bands or ECO plus.
• 3:53
  SPEAKER_01: And what they're doing is they're taking that 95% coverage, that 86 to 95% coverage band, okay, and they're going to look uh at your specific units on your policy, and by buying the uh ECO plus ECO bands, now you're you're paying for the option to get paid out on your individual units or the ECO county coverage, whichever would be more in your benefit.
• 4:27
  SPEAKER_01: Okay, so pretty good deal.
• 4:29
  SPEAKER_01: Uh, it's a way to really take a lot of risk off of the table on your farm for the coming year.
• 4:35
  SPEAKER_01: Uh, of course, the downside is going to be the cost.
• 4:38
  SPEAKER_01: And so, since we are not talking about subsidized products, the the products have to be actually sound or the companies wouldn't offer them.
• 4:47
  SPEAKER_01: And so that's gonna, you know, double or or even more increase your premium costs.
• 4:54
  SPEAKER_01: And so it's not uncommon to have some of these products costing$25,$30,$35 an acre on top of your uh your cost of your standard insurance coverage.
• 5:06
  SPEAKER_01: Now, for some producers, that's worth it.
• 5:09
  SPEAKER_01: Maybe uh you have some riskier farms, maybe you're planting more corn on corn this year and and need the protection with the increased input cost.
• 5:18
  SPEAKER_01: Uh, maybe you're looking at your soybean levels and or or or or production and thinking, if I have any slip in yield or price, I need to be protected because uh we we aren't really in a profitable situation on soybeans.
• 5:31
  SPEAKER_01: So that's where these products can help fill that gap.
• 5:35
  SPEAKER_01: Um, so definitely uh if you are somebody that is looking for the highest level protection available on your individual farm, there are products out there uh that can help you hit those coverage levels.
• 5:49
  SPEAKER_01: It's gonna cost you more premium, but if it helps you sleep better at night, they are definitely worth it.
• 5:54
  SPEAKER_01: Uh so get in.
• 5:55
  SPEAKER_01: Uh, we'd be happy to quote them here or talk to your agent and see what products they have available uh on that end of it.
• 6:02
  SPEAKER_01: A couple other uh private products, you know, the one that we think of most often is our hail coverage, um, and and that is still available.
• 6:10
  SPEAKER_01: Uh hail coverage in our area, meaning Minnesota, Iowa, South Dakota, uh generally is the same as last year, and premiums uh are pretty similar.
• 6:20
  SPEAKER_01: If you are in the state of Nebraska, there are there were lots of changes to the hail program there due to the history of losses, so please pay attention to that.
• 6:28
  SPEAKER_01: One of the other private products that I've uh looked at the last few years and and feel pretty good about and have I would uh encourage everyone to consider is extra replant coverage.
• 6:40
  SPEAKER_01: And these products pay you from acre one uh for the most part a little extra uh replant.
• 6:46
  SPEAKER_01: A standard replant is included on every multi-parel crop insurance coverage, but you need at least 20 acres or 20% of the unit to initiate a payment.
• 6:57
  SPEAKER_01: Uh 20 acres can be a pretty big deal if we have a drowned out or an area where maybe you had a little frost come in and wiped a few acres out.
• 7:06
  SPEAKER_01: You can buy these add-on replant policies to help uh pay from acre one and get out and replant those areas uh if you feel uh you need to, and the crop insurance company allows you to.
• 7:19
  SPEAKER_01: Uh as we push these planting dates earlier and earlier, especially on soybeans, that's where I'd feel uh if you are in a situation where you like planting early, uh, I would definitely at least quote or consider adding that replant option.
• 7:33
  SPEAKER_01: Of course, you're gonna pay the extra premium on all your acres, and you're only probably gonna pick it up on those small potholes or small areas that you replant, but it can be a little bit of a safeguard if you're going out early before the initial plant date on the multiparal policy.
• 7:51
  SPEAKER_01: Uh that's where these products work really well.
• 7:53
  SPEAKER_01: Of course, if you plant before the initial plant date, uh, which uh in in our areas, uh um, you know, April 10th on corn, uh, April 20th on beans in Minnesota, 26th, 25th in in South Dakota, if you're planting before that, that's where these products can give you a little more peace of mind of having replant coverage, because if you plant before the initial plant date, you are giving up your replant coverage on your multiparo policies.
• 8:19
  SPEAKER_01: So uh just keep that in mind.
• 8:21
  SPEAKER_01: Uh something to consider as you uh head to the fields this spring.
• 8:26
  SPEAKER_01: All those replant coverages do have to be purchased before March 15th.
• 8:30
  SPEAKER_01: Uh so give it some thought.
• 8:32
  SPEAKER_01: Uh, think about your past history and how replant has affected your operation and maybe consider that.
• 8:38
  SPEAKER_01: So lots of different private products out there uh they can help fill some of the niches on your farm, on what you want covered.
• 8:45
  SPEAKER_01: Uh, consider those.
• 8:46
  SPEAKER_01: Uh, give our office a call, and we'd be happy to discuss a few of them for your operation this year.
• 8:52
  SPEAKER_00: And thank you to all our listeners.
• 8:54
  SPEAKER_00: Please reach out to us at professional eggmarketing.com.
• 8:57
  SPEAKER_00: Check out our other podcast as well, Professional Egg Marketing, that's released every Friday.
• 9:02
  SPEAKER_00: Trading commodity futures and options involves substantial risk of loss and is not suitable for all investors.
• 9:08
  SPEAKER_00: See you next time.