There’s no controlling weather extremes, but farmers can protect themselves from the uncertainty that rain, early frost and other variables bring with an insurance policy through Farm Credit Mid-America.
Margin Protection is a federally-affiliated, privately-developed crop insurance option that helps protect producers against an unexpected decrease in their operating margin. Unlike revenue protection, which is individually based, Margin Protection uses county-level estimates of revenue and input costs to determine margin loss. When the harvest margin for the county is lower than the target, Margin Protection covers a portion of that shortfall.
“Margin Protection is a financial option many farmers we serve are going to want to consider and utilize,” says Savannah Steinke, Crop Insurance Specialist with Farm Credit Mid-America.
Margin Protection for corn and soybeans is available to Farm Credit Mid-America customers in Indiana and Ohio through Sept. 30, the last day to purchase a policy.
Not only does Margin Protection mitigate yield and price risk, it also protects against risk associated with variable input costs increasing between when farmers make planting decisions and when they actually buy and use inputs. And it comes at an opportune time.
This past spring was one of the rainiest on record for much of the United States, leaving fields saturated, crop plantings behind schedule and farmers uncertain about what the year might yield. A summer dry spell further compounded problems in some areas, presenting ongoing challenges for many farmers across the Midwest.
A ‘GAME CHANGER’ FOR AGRICULTURE
Margin Protection is a highly subsidized, shallow-loss product with only a five percent deductible that can pay $1.20 for every dollar of loss. A producer may choose from 70 percent to 95 percent coverage of their expected margin, and it can be purchased in combination with a Yield Protection or Revenue Protection policy.
“This protection option could be a real game changer for agriculture in our region,” Steinke says. “As experts in Margin Protection, we are the right folks to help farmers utilize this product to provide coverage against an unexpected decrease in operating margin.”
The Association’s seasoned crop insurance team can also discuss the implications of prevented plantings, Market Facilitation Program, cover crops and more, while financial officers can discuss tools such as debt refinancing, deferment and other flexible restructuring options.
Farm Credit Mid-America understands the unpredictable nature of agriculture and is prepared to assist with Margin Protection or any customized solutions to help farmers thrive – for the remainder of 2019, into the next operating cycle and beyond.
To learn more about Margin Protection or any other programs or services, call us at 800-444-FARM or visit our website at e-farmcredit.com.