Margin Protection – Federally Subsidized Coverage for Row Crop Farmers

Margin Protection (MP) is the first crop insurance product subsidized by the Federal Government to protect operating margin. Started in 2016, MP is applicable by county in select states to insure corn and soybeans, wheat, and rice, offering risk protection in exchange for the smallest revenue deductible in all of crop insurance.

In our video, Silveus Insurance Group President Scott Silveus explains: “Margin Protection is a complicated product, but it provides a very simple solution to growers: protect your margin. It sounds a little too good to be true, but you have to remember: this is a subsidized product approved by the USDA’s risk management agency. Also new with MP, farmers who carry two policies for crop risk are awarded the greater of the two payouts according to the policy that pays most.”

Here are the basics: MP is a crop insurance option that protects producers against an unexpected decrease in their operating margin. The coverage is based on an expected margin which is the expected area revenue minus the expected area operating costs, for each applicable crop, type, and practice. MP is area-based coverage and may not necessarily reflect a producer’s individual experience. The price discovery periods for MP corn, soybeans, and wheat begin August 15. The first price discovery period for rice begins December 15.

MP is offered either as a stand-alone policy or in conjunction with a base MPCI policy. If a grower chooses to purchase both MP and a Yield Protection or Revenue Protection policy, the premium for MP will be reduced. The amount of the reduction cannot be known definitively until all information needed to establish liability under the base policy is known. The premium is the maximum amount of premium per acre that could be owed for MP given the estimated market values and assuming no base MPCI policy is purchased.

“This is a good deal for farmers,” concludes Silveus. “Every farmer that’s got this policy available needs to take a hard look at it.”

Contact Silveus Insurance Group for more information about MP, or visit the MP product page on our website.