In today’s unpredictable agricultural landscape, managing risk is more important than ever. It’s important to stay on top of additional opportunities to manage risk. That’s where the Margin Coverage Option (MCO) comes in. It’s a new crop insurance tool designed to help farmers protect their operating margins from the dual threats of falling revenues and rising input costs.
What is Margin Coverage Option?
MCO is an area-based insurance plan that provides a band of coverage between 86% and either 90% or 95% of your expected margin. It’s designed to work alongside your existing Revenue Protection (RP), Yield Protection (YP), or Actual Production History (APH) policy. Unlike traditional insurance, MCO isn’t tied to your individual yields or input purchases—it’s based on county-level data, making it ideal for farmers whose yields closely track county averages.
Why Consider Margin Coverage Option?
- Simple and Strategic: MCO offers many of the benefits of Margin Protection (MP) insurance but in a more straightforward format.
- Substantial Subsidy: With a 65% premium subsidy, MCO is a cost-effective way to add another layer of protection.
- Earlier Price Discovery: MCO uses the highest of three pricing windows—August 15–September 14, February, or October—giving you more flexibility and marketing opportunities.
- Input Cost Protection: It factors in key input costs like diesel, natural gas, and fertilizers (urea, potash, DAP), helping you manage rising expenses.
How MCO Compares
Feature | Enhanced Coverage Option (ECO) | Margin Coverage Option (MCO) | Margin Protection (MP) |
|---|---|---|---|
Purchase deadline | March 15 | September 30 | September 30 |
What yield is used to calculate coverage? | Underlying policy approved yield | Underlying policy approved yield | Expected county yield |
Overlap with underlying policy? | No | No | Yes: Premium credits may apply |
Subsidy Rate | 65% | 65% | 44% |
Can we bundle? | With SCO | With SCO | No |
How Margin Coverage Option Works
A payment is triggered when the harvest margin for your county falls below the trigger margin, due to lower yields, falling prices, or higher input costs. The indemnity is calculated based on the difference between the expected and actual margins, multiplied by a payment factor that reflects the severity of the loss.
Availability
MCO is available for the 2026 crop year in the following crops and states:
- Corn/Soybeans: IL, IN, IA, KS, MI, MN, MO, NE, ND, OH, SD, WI
- Spring Wheat: CA, ID, MN, MT, ND, OR, SD, WA
- Grain Sorghum: KS, OK, TX
Important Dates
- Initial Price Discovery: August 15 – September 14
- Sales Closing Deadline: September 30
Is MCO Right for My Farm?
To understand if Margin Coverage Option is going to be the best option for your farm, it’s best to reach out to one of our insurance officers. They have access to our proprietary software to help you understand if MCO is the right fit for your farm’s risk management goals. With so many crop insurance options available, this tool helps your insurance officer simplify your decision.
