LUBBOCK, TX – New research from North Dakota State University highlights the role of crop insurance in shielding farmers from revenue losses between 2015 and 2023. Led by Senior Research Economist Francis Tsiboe, the study found that combining basic insurance products like Revenue Protection (RP) and Yield Protection (YP) with supplemental policies such as the Supplemental Coverage Option (SCO) and Enhanced Coverage Option (ECO) boosted revenue stability significantly. Farmers using these combined programs had a 27.9% higher chance of recovering losses compared to those farming without insurance. Revenue variability dropped by nearly half, while downside risk fell by more than 80%.
Cotton saw the highest reduction in downside revenue risk at 88%, followed by corn, canola, and wheat. Geographically, states like Arizona, Iowa, and Illinois reported the strongest protections, while regions such as Arkansas and California saw more modest benefits. The study also noted that the strongest protections often came with higher producer costs, though recent legislation in the One Big Beautiful Bill (OBBB) increased premium subsidies for SCO and ECO to 80%, easing the out-of-pocket burden for farmers.
Farm-Level Takeaway: Crop insurance remains a vital tool for managing climate-driven risk. Supplemental policies can dramatically reduce revenue volatility, with expanded subsidies making them more affordable for producers nationwide.