Editor’s note: This story is part of an ongoing series called “Smart Moves for 2027,” which outlines steps to guide farmers in the coming year.
Have you ever been befuddled by a restaurant menu with dozens of choices?
Well, that pales in comparison to the dizzying array of crop insurance choices farmers have for 2027. In central Iowa alone, a corn grower now has more than 2,000 possible combinations of crop insurance coverage, said Tony Jesina, senior vice president of insurance and consumer lending for Farm Credit Services of America.
“There used to be this old play that everyone would run,” Jesina said. “Folks would say, ‘Here’s what I had last year, and if I go up or down a level, here’s what it would look like.’”
Such simplicity no longer works, given current weather and market risk. And even though today’s crop insurance options are more complicated, this complexity can yield opportunity in better protection for your farm’s bottom line.
Fill the gap
Knowing the cost of production gives farmers a starting point for determining breakeven and profit margins, Jesina said. Working capital — the cash that remains after current liabilities are subtracted from current assets — also can identify how much weather and market risk a farmer can withstand.
Then they should work with their crop insurance agent to fill the gap with revenue and/or yield protection insurance.
“Every farm will have a gap,” Jesina said. “It’s just how big and what kind of a gap you can afford.”
Gaps vary. Younger farmers with slim working capital may need a comprehensive and more expensive policy. More experienced farmers with more working capital may opt for a less expensive plan with slimmer coverage.
Plans also may differ between crop and livestock farmers.
“If you feed everything to livestock, you may want bushel protection,” Jesina said. “If you plan on selling everything [as a crop farmer], you likely need revenue insurance. You have to pick the bundle that makes sense for you.”
Area-based options
Revenue protection plans that shield farmers against adverse market moves have existed for years. So have yield protection plans, which guard against reduced yields spurred by weather perils.
What’s new is an increased emphasis on area-based revenue and yield protection. Jesina noted that the One Big Beautiful Bill Act that became law in July 2025 pumped more premium support into these options.
These plans cover areas as wide as counties, rather than individual farms and fields. They’re much less expensive than individual field and farm policies, Jesina said.
“An area plan is based on a whole county and how it performed,” he said. “Think of it as a group plan versus individual medical coverage. Premiums are much cheaper than plans that get down to farm and field levels.”
They’re popular, as Jesina said sales have doubled in the past year. And area coverage works well if a farm consistently performs at the area or county level.
“If you receive an indemnity [payment] with an area plan, it’s likely because your own operation has a similar type of event or risk,” Jesina said.
However, these plans aren’t well-suited for farms that don’t mirror area performance.
“A worst-case scenario is if your farm has a big setback that doesn’t occur in the rest of the county for these plans to kick in,” he said.
If a farm has better soil and rainfall patterns than the rest of the county, an area plan may provide insufficient protection, Jesina said.
“Area plans can be a cost-effective way to fill the gap, but they are not for everyone,” he added.
Supplemental products
The OBBBA also pumped subsidies (80% of premium cost) into the Supplemental Coverage Option (SCO) and the Enhanced Coverage Option (ECO). Both can build upon existing multi-peril revenue and yield protection coverage of 85% for individual policies and 95% for area-based policies.
To be eligible for SCO coverage, farmers must first purchase an actual production history, yield protection, revenue protection or revenue protection with the harvest price exclusion policy product. The SCO can then be added to maximize individual coverage up to 90%. Meanwhile, the ECO can protect the band between 90% and 95% of your APH.
At an 80% insured level with $5-per-bushel corn, a $4-per-bushel floor is created with a multi-peril policy.
“Prices have to drop a dollar at a normal yield before you collect,” Jesina said. “But if you opt for 90% to 95% coverage levels — as can occur with an SCO or ECO — you’re more likely to collect by triggering a loss.”
Hail, wind riders and private plans
The move to less costly area-based plans has led to farmers buying riders that add individual protection against adverse weather. Hail riders have been popular in the past, but growth has slowed.
“When farms were smaller, one hailstorm could wipe out all acres,” Jesina said. “With farms larger and acres spread out, that isn’t as likely to happen.”
Wind riders are another story, as events such as the 2020 Midwest derecho have increased. Meanwhile, the surge in better corn genetics has created heavier ears and placed more pressure on stalks that can be damaged by wind, Jesina said.
The increase in area plans also has spurred sales of private products that supplement or complement area-based coverage.
“They can be expensive, as they aren’t subsidized, and you pay 100% of the cost,” Jesina said.