Crop Insurance Papers and Information

Link to article: https://www.agmanager.info/crop-insurance/crop-insurance-papers-and-info...

This study estimates how the Supplemental Coverage Option (SCO) performs with and without the changes to subsidies and coverage levels in the One Big Beautiful Bill Act (OBBBA). We calculate “net indemnities” (payments minus farmer-paid premiums) using 2025 crop prices and premium rates, combined with historic county yield data. By averaging across many possible yield outcomes, we estimate the long-term value of SCO under both the old and new rules. For corn, soybeans, and wheat, expected SCO net indemnities increase by 63–70% with the OBBBA changes. In short, the new law makes SCO more valuable to farmers by lowering their costs and increasing the likelihood and size of payments. Other considerations not analyzed in this study include premium costs and farm-level risk reduction.

This tool helps corn, grain sorghum, soybean, and wheat producers analyze the relationship between their yields and county-level yields, which can be useful in deciding whether or not to use high coverage policies such as the Supplement Coverage Option (SCO) and the Enhanced Coverage Option (ECO). Producers will need to have yield records to use the tool.