The USDA offers multiple policies for livestock and crops
Being a farmer means co-existing with the unexpected whether it’s a storm, a machinery breakdown, or a geopolitical situation causing challenges on the farm.
And when the unexpected strikes, a comprehensive insurance policy can help farmers get back on their feet.
The United States Department of Agriculture, through its Risk Management Agency, offers multiple types of insurance covering more than 100 different crops plus livestock and other assets.
Participation in federal crop insurance programs isn’t mandatory but recommended to secure eligibility for things like disaster assistance and loans.
Here’s a look at some of the main types of crop insurance, and how they work.
Insurance Type | Description | Calculation and Other Notes |
Yield Protection | Protects against unavoidable losses caused by weather, fire, wildlife, disease, insects, and natural disasters. Price drops are not included in this policy. | This policy uses the Actual Production History of an individual farm for the last four to 10 years Farmers can insure most crops between 50 and 85 percent in increments of 5 percent. |
Actual Production/ Revenue History | This program determines insurance guarantees based on a farmer’s historical yields. ARH protects against revenue fluctuations using a farmer’s actual historical data. | Farmers must submit updated and accurate production reports to insurance agents to be eligible for APH/ARH. |
Revenue Protection | Protects farmers against revenue losses caused by crop pressures like weather. It also protects changes in harvest prices from the projected price. | Approved Yield x Coverage Level (between 50 and 85 percent) x higher of projected or harvest price. |
Area Plans | These programs provide protection against widespread losses of revenue or yield in a county. | Payments are triggered when the final county-level yield or revenue falls below the level selected by an individual producer. |
Rainfall Index | This program protects against lost revenues caused by a lack of precipitation. | Payments are calculated using the NOAA’s Prediction Center. The NOAA divides the country into a grid. If areas in that grid experiences low rainfall, producers within the grid may receive payment. |
Whole Farm Revenue Protection | These policies can protect all commodities, including livestock, on the farm under one insurance policy. The plan is tailored for any farm with up to $17 million in insured revenue under the program. | Payments are triggered when revenue-to-count (the approved revenue generated by a farm in an insured tax year) falls below the insured revenue. |
Having crop or livestock insurance means paying a premium to receive the necessary protection.
Premiums can vary depending on factors like the state and county where a farmer operates.
State | Average Crop Insurance Cost in 2024 (per acre based on available data) |
Texas | $11 |
North Carolina | $36.41 |
Iowa | Up to $30 |
Illinois | Up to $23 |
Indiana | Up to $30 |
Missouri | More than $30 |
Ohio | Over $23 |
Michigan | $20 |
In addition, the USDA has a Cost Estimator tool available to help producers estimate federal crop insurance premium costs.
The USDA has livestock producers covered too.
And the programs may have different parameters depending on the livestock being insured.
The Livestock Gross Margin plan, for example, provides overall protection against loss of gross margin (market value of livestock minus feed costs).
The Livestock Risk Protection Plan protects against price declines.
Dairy cattle have its own program.
The Dairy Revenue Protection Plan protects against declines in revenue (yield and/or price) on the milk produced from dairy cows on a quarterly basis.
One program is tailored to farmers in specific states on a pilot basis.
The Weaned Calf Risk Protection program is for beef cow-calf producers in Colorado, Nebraska, South Dakota, and Texas. The program protects against declines in weaning weights and loss of revenue.
Any farmers looking for more information on insurance are encouraged to contact a local RMA agent.