Smart Insurance Helps Farmers Face Climate Risks

Jun 27, 2025
By Farms.com

Modern Crop Coverage Prepares Growers for Extreme Weather Impacts

Extreme weather caused over $20 billion in agricultural losses in the U.S. last year. To support farmers, modernizing crop insurance is now critical.

The Federal Crop Insurance Program, a public-private partnership, covered more than 50% of these disaster losses in 2024, according to the American Farm Bureau.

This program protects farms from financial risk, but it depends heavily on outdated historical data. As weather patterns shift, it limits farmers from adopting more climate-resilient strategies like water conservation or crop changes.

Private sector innovations offer smarter options. New parametric insurance models use data and predictive tools to pay farmers quickly after events like heatwaves.

For instance, Praedictus Climate Solutions and Descartes are developing insurance based on real-time weather models. These help farmers recover faster while adjusting to changing growing conditions.

Nature X is creating insurance to reduce pollution from fertilizer runoff, helping protect water bodies like the Gulf of Mexico. Such tools support both the environment and farming resilience.

Public-private partnerships are also making progress. EDF is working with Kansas farmers and using OpenET evapotranspiration data to improve insurance coverage for irrigated fields.

Meanwhile, the University of Illinois and Illinois Corn Growers Association are testing insurance rate adjustments for conservation practices like cover cropping.

New ventures are growing too. The MBOLD Coalition backs crop insurance for winter camelina, a cover crop used for renewable fuel and soil protection. Growers Edge partners with food companies to support farmers adopting conservation plans through crop warranties.

"Crop insurance plays a critical role in supporting the financial health of U.S. farms and ranches through the ups and downs of weather conditions."

Modern insurance gives farmers flexibility to face today’s climate, protect natural resources, and strengthen rural economies.

Video: Not only is corn getting sweatier, it's getting smarter

Over the past several weeks, much of the U.S. Midwest has experienced prolonged episodes of extreme heat, a trend also observed in other major corn-producing regions of North America such as eastern South Dakota, southern Ontario, and parts of Kansas and Missouri. These high-temperature events can place significant physiological stress on maize (Zea mays L.), which is cultivated on approximately 90 million acres across the United States, with leading production in Iowa, Illinois, Nebraska, and Minnesota. Like all maize, Bayer’s PRECEON™ Smart Corn System is subject to transpiration-driven water loss under high heat. However, this system incorporates agronomic traits designed to improve standability through enhanced stalk strength, thereby reducing lodging risk during stress conditions. Furthermore, the system supports precision agriculture practices by enabling more targeted fertilizer and crop protection applications. This approach not only helps to optimize input efficiency but also contributes to maintaining or increasing yield potential under variable environmental stresses such as heat waves, which are becoming more frequent in corn belt and fringe production regions.