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USDA Announces New Operating Margin Protection Crop Insurance Option

The U.S. Department of Agriculture’s (USDA) Risk Management Agency (RMA) announced this week the availability of a new crop insurance coverage option that provides producers with coverage against an unexpected decrease in their operating margin. Starting in the 2016 crop year, the new Margin Protection plan will be available in addition to underlying crop insurance policies in select counties starting for corn and soybeans in all Iowa counties, for rice in counties in Arkansas, California, Louisiana, Mississippi, Missouri and Texas counties, and for spring wheat in select Minnesota, Montana, North Dakota and South Dakota.

The plan provides coverage based on a farmer’s expected margin: the expected area revenue minus the expected area operating costs. Margin protection is area-based coverage and may not necessarily reflect a producer’s individual experience. The margin protection plan can be purchased by itself, or in conjunction with a Yield Protection or Revenue Protection policy.  A producer may choose coverage from 70 percent to 90 percent of their expected margin.  A higher level of coverage will have a higher premium rate. The catastrophic (CAT) level of coverage is not available under this policy. The last day to purchase a margin protection policy for corn, soybeans, and spring wheat is Sept. 30, 2015. The last day to purchase margin protection for rice is the same as the sales closing date for the underlying rice insurance policy, which varies by county. Maps of eligible counties and other resources can be found on the margin protection Web page.

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