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Margin Crop Insurance Available Across the Southern Region

As harvest progresses and crop prices stay at historical lows, it is difficult to consider risk management for 2026. The federal crop insurance program offers a tool that can currently provide a form of county-level revenue protection. Margin Protection (MP) crop insurance was made available for a variety of crops across the southeast region in 2024. MP is an area-level (i.e., county-level) crop insurance product designed to provide risk protection against the risk of thin margins using a combination of county yields, futures prices, and region-specific input usage. Coverage levels range from 70% to 95% and may be purchased with any individual insurance, such as Yield Protection (YP) or Revenue Protection (RP). It may not be purchased with Supplemental Coverage Option (SCO) or Enhanced Coverage Option (ECO) (see Biram and Connor, 2023). Additionally, there is a new product offering similar to ECO and MP called Margin Coverage Option (MCO), which I will provide more details on below.

For certain crops/regions the sales closing date (SCD) for MP coverage is similar to other traditional products, However, in some cases there is an early SCD and price discovery window. This early window offers the opportunity to lock in prices sooner if you think that might be an advantage to the normal spring price discovery. Check here for MP SCD’s and price discovery windows. The earlier price discovery window offered by MP (August 15, 2025, to September 14, 2025), provides corn and soybean producers with the option to buy MP and lock in futures prices, if they think that might be an advantage over the normal price discovery window (January 15, 2026, through February 14, 2026). For example, the current USDA, Risk Management Agency (RMA) projected price for MP purchased for corn is $4.55/bushel, which implies a price guarantee of $4.32/bushel assuming county yields and costs remain constant. The risk of cost of production portion of MP provides protection from price volatility for Urea, Diammonium Phosphate (DAP), Diesel, and the Interest Rate on a farmer’s production loan. These prices also face projected price discovery periods similar to crop futures prices but have different windows of harvest price discovery (see Chattha and Biram, 2024).

Another decision variable in the MP coverage decision is the Protection Factor (PF). The PF ranges from 80% to 120% and offers higher (lower) protection at a higher (lower) premium cost and largely functions as a farm-level production adjustment. That is, if a farmer perceives their yield to be higher than the county average, they may select a PF higher than 100% at an additional premium cost. Alternatively, if a farmer perceives their yield to be lower than the county average, they may select a PF less than 100% and pay a lower premium.

The University of Arkansas, Cooperative Extension Service offers a fully web-based Margin Protection decision aid. The decision aid allows the user to input information such as state, county, crop, and irrigation practice to determine Margin Losses (i.e., indemnities) net of producer paid premiums across all coverage levels. Additionally, the tool offers a feature that calculates a breakeven price, which is a harvest time crop futures price that results in a Zero Net Indemnity, or a Margin Loss equal to the producer paid premium. Breakeven prices vary by coverage level and harvest county yields input by the user.

An example output showing net indemnities across different harvest crop futures prices, including a breakeven price of $4.13/bushel at the 95% coverage level, is provided in Figure 1 below. This figure suggests that Margin Losses at or above the producer paid premium are experienced if the 2026 December corn futures price has a 30-day average below $4.13/bushel at harvest (i.e., from August 15, 2026, through September 14, 2026). You may access the Margin Protection Payment Estimator (2026 Crop Year) at this link. Fact sheets which provide all of the details of MP, including counties eligible for enrollment, may be found at the following links: Margin Protection Crop Insurance and Determining Expected Cost and Premium Rates.

Figure 1. Example Breakeven Price Figure from Margin Protection Payment Estimator Tool

This is an example of net indemnities across various harvest time crop futures prices for corn in Arkansas County, Arkansas assuming county yield remains unchanged. Intuitively, as the harvest price increases the net indemnity decreases.

Margin Coverage Option (MCO)

Like MP, MCO provides area-based coverage against an unexpected fall in operating margin. This could be driven by a fall in the county-level yield average, a fall in the harvest-time futures price, or an increase in the futures prices of select inputs or any combination of these perils. MCO faces the same projected and harvest price discovery periods for crop futures and input future prices as MP. MCO uses the same expected and final county-level yields as SCO and ECO and covers a band from 86% to either 90% or 95% of expected county-level revenue. Figure 2 provides a visual comparison of MP and MCO and their eligibility to be enrolled with other federal crop insurance products. Currently, the subsidy rate for MCO is the same as the updated subsidy rates for SCO and ECO, which is 80% of the actuarially fair premium, meaning farmers will pay 20% of the total premium expense. For a full list of crops and MCO pilot areas, visit www.margincoverageoption.com. The Sales Closing Date (SCD) for the 2026 crop year for MCO on cotton and sorghum is September 30, 2025, while the SCD for MCO on Rice in Arkansas is February 28, 2026, like MP and other major crop insurance plans (e.g., YP, RP, SCO, and ECO).

Figure 2. Comparing Coverage Bands of MP and MCO and Eligible with Other Federal Crop Insurance Products

Source: www.margincoverageoption.com

MCO Resources

USDA, Risk Management Agency Frequently Asked Questions on ECO

USDA, Risk Management Agency Fact Sheet on MCO

Watts and Associates Website for MP

Watts and Associates Website for MCO

References

Biram, H.D. and Connor, L. (2023). Types of Federal Crop Insurance Products: Individual and Area Plans. University of Arkansas System Division of Agriculture, Cooperative Extension Service Fact Sheet No. FSA75.

Biram, H.D. and Stiles, S. (2022). Margin Protection Crop Insurance: A Way to Manage the Risk of High Input Costs. University of Arkansas System Division of Agriculture, Cooperative Extension Service Fact Sheet No. FSA66.Chattha, K.A. and Biram, H.D. (2024). Determining Expected Cost and Premium Rates in Margin Protection Crop Insurance. University of Arkansas System Division of Agriculture, Cooperative Extension Service Fact Sheet No. FSA87.

Biram, Hunter D. “Margin Crop Insurance Available Across the Southern Region.” Southern Ag Today 5(42.1). October 13, 2025. Permalink

October 13, 2025
Asking the Right Questions: Fulfilling Your Duty on the Cooperative Board of Directors
You have been elected to the board of directors, and now what? Gaining some confidence as a new director can be as simple as asking important questions. This is a brief dive into your fiduciary duties and role as a director of a cooperative with a focus on the questions you should be asking. But first, what are fiduciary duties?

Fiduciary Duties

In simple terms, a fiduciary is someone who is entrusted to act on behalf of another. As a director of your cooperative, you have been given authority to act on the behalf of cooperative members. There are specific duties associated with this role. Some of them include:

The Duty of Loyalty

Acting in unity with the best interests of the cooperative and its members.

The Duty of Care

Exercising reasonable care, skill, and diligence in carrying out your responsibilities.

The Duty of Good Faith

Acting honestly and fairly in your dealings with the cooperative and its members.

The Duty of Confidentiality

Keeping confidential all information related to the cooperative and not using that information for personal gain.

Your role as a director

Your role as director is to represent the interests of the cooperative members, and to represent the interests of the cooperative itself. As a director, your role is limited to a few general things.
1. Hire and evaluate a manager (and then get out of the way).
2. Establish policies to protect the cooperative, its assets, and its employees.
3. Engage professional services needed by the cooperative such as a lawyer or auditor.
4. Ensure accountability for the proper use of cooperative assets.
5. Provide strategic direction.
Some questions for self-reflection

Let’s consider some questions that might help you stay aligned with your fiduciary and board responsibilities. During board discussions, you might ask yourself:
1. Is this a topic for board discussion, or is it the responsibility of management?
2. How will this decision affect our members?
3. Is this decision fair to all members?
4. Do we fully understand the facts about this issue?
5. Have we verified this information?
6. Is there anything about our decision that might have the appearance of something illegal or unethical?
7. Is this something that should not be discussed outside the boardroom?
Some questions to improve board discussions

The best boards are the ones that engage in a lot of discussion. If your board meetings feel repetitive, or methodical, or if you feel like your board is in a rut, simply approving what is presented, consider asking some of these questions.
1. Does this support the mission of the cooperative?
  1. Why does our cooperative exist?
  2. What does our cooperative do better than competitors?
  3. Why should someone be a member of our cooperative?
2. What are the financial trends of our cooperative, and how do they compare to our industry?
  1. Are we profitable?
  2. Are we efficient?
  3. Are we adding value to member investments?
  4. Are we taking unusual risks (including the status of our accounts receivable)?
  5. Are we replacing and protecting assets?
3. What are the forces that impact profitability in our industry, and how can we counteract them?
  1. How can we avoid price competition with rival firms?
  2. Is it likely that new firms could enter our industry?
  3. Could our core business be replaced by firms or technologies from other industries?
  4. Do our suppliers have power over prices?
  5. Do our buyers have power over prices?
The most common advice that veteran directors offer new directors is to ask lots of questions. It’s natural to feel reluctant to ask questions. Maybe you are embarrassed to ask something simple, or you are afraid to appear inexperienced. But your questions are likely in the minds of others as well. The answers to these questions will generate discussions that strengthen board connections and overcome groupthink. The questions presented here will help new directors to become more confident in their duties, and boards to become more progressive and effective.

Park, John. “Asking the Right Questions: Fulfilling Your Duty on the Cooperative Board of Directors.” Southern Ag Today 5(41.5). October 10, 2025. Permalink
October 10, 2025
Feral Swine Eradication and Control Pilot Program and Crop Insurance Indemnities

Introduction

Wildlife damage to crops has become a growing concern for U.S. agriculture. Crop insurance records show that payments for wildlife-related losses increased from about $15 million in 2012 to nearly $39 million in 2022. Among the different threats, feral swine stand out as one of the most destructive, causing an estimated $800 million in damages each year to crops, livestock, property, and even natural resources such as water quality and wildlife habitat.

Feral swine have spread quickly—moving from fewer than 20 states in the early 1980s to more than 30 states today. Because animals often cross property lines, private control efforts, such as hunting and trapping, have been costly and only partly effective. This has created demand for coordinated public programs that can reduce hog populations and restore damaged farmland.

In response, the 2018 Farm Bill created the Feral Swine Eradication and Control Pilot Program (FSCP) with $75 million in funding to remove feral hogs and restore land. The program began in 2020 in 20 selected counties across 11 southern states and expanded in 2021. These counties were selected based on feral swine presence and notable increases in damages (Figure 1). This article summarizes findings from our recent study (Duncan et al., 2025) that evaluated the impact of the FSCP on crop insurance damages.

Findings

Our analysis of USDA Risk Management Agency data from 2013 to 2022 indicates that the FSCP has had an impact, but the benefits are not spread evenly across all crops. The clearest effect was seen in corn. Counties participating in FSCP showed fewer corn acres receiving wildlife-related insurance payments than similar counties without the program. This pattern is consistent with what producers in the field have reported—that corn losses to feral hogs were noticeably lower in areas where FSCP activities were underway.

For other crops, the story is more mixed. For soybeans, wheat, and peanuts, however, the data looked much the same—whether or not counties participated in FSCP. Cotton did show some reduction in losses in certain years, but the effect was smaller and less consistent than what we observed for corn. These results suggest that while FSCP is helping to address hog damage, especially for corn, it may take more time and continued investment before its benefits can be clearly seen for other crops.

Implications

The finding that corn producers benefited the most from FSCP is not surprising. Corn is one of the crops most heavily targeted by feral hogs, and the program’s design, focused on removal and land restoration, appears to be reducing this pressure. For producers, this means that FSCP can serve as a valuable complement to private control efforts that have often proven costly and only partly effective. The lack of clear effects for other crops should not be taken to mean that the program has no value beyond corn. Rather, it may reflect the fact that FSCP is still in its early stages. The program roll out coincided with COVID-19 disruptions which potentially slowed participation and adoption. It is possible that as the program continues and expands, measurable benefits for soybeans, peanuts, and wheat could become more apparent. Also, we should note that a limitation of this study is that only crop damages that were severe enough to trigger crop insurance payments were included. The crop insurance data does not determine the species causing crop damage. We exclude damages that were not severe enough to trigger a crop insurance payment, as well as benefits to livestock health, property, and the environment.

For policymakers, these results suggest that targeting resources towards corn-producing regions could deliver the greatest near-term return on investment. Continued funding and expansion could strengthen these results and help ensure that the success of the corn program translates more widely throughout US agriculture in the coming years.

Figure 1. Wildlife-related indemnified crop acres by crop, 2013–2022. Soybeans and corn account for the majority of reported losses.

Duncan, H., Boyer, C. N., Park, E., & Smith, S. A. (2025). “Evaluating Feral Swine Eradication and Control Pilot Program Impact on Crop Indemnities.” Applied Economic Perspectives and Policy. https://doi.org/10.1002/aepp.70016

Park, Eunchun, Hence Duncan, Christopher Boyer, and Aaron Smith. “Feral Swine Eradication and Control Pilot Program and Crop Insurance Indemnities.” Southern Ag Today 5(41.4). October 9, 2025. Permalink

October 9, 2025
How Brazil’s Rise in Global Cotton Markets Impacts U.S. Exports

The United States had long been the world’s leading cotton exporter (Figure 1), with 87% of cotton production, on average, destined for export markets over the past decade (2016 – 2025). In 2016, U.S. cotton exports captured 39% of the global market, but this share has steadily declined since the onset of trade disputes with China. By 2023, the U.S. share in the global cotton market had fallen to 26%, its lowest point in over a decade. Although it rebounded slightly to 28% in 2024 and 2025, U.S. cotton has faced rising competitive pressures, particularly from Brazil. Brazil’s ability to double-crop cotton with other crops has driven substantial growth in its cotton production and exports. Consequently, Brazil has rapidly expanded its role in the global cotton market, surpassing U.S. cotton export volumes by 2023 and becoming the world’s leading cotton exporter. This shift is closely tied to China’s strategic diversification away from U.S. cotton, with Chinese investment in Brazilian infrastructure improving logistics, port access, and overall competitiveness.

Cotton prices received by producers across countries vary only slightly, with Brazilian cotton producers typically receiving marginally lower prices than their U.S. counterparts. Although Brazilian cotton producers face higher seasonal costs per acre for fungicides and insecticides due to the tropical climate, these expenses are more than offset by advantages in land, labor, and machinery costs. Consequently, Brazil’s overall production costs per acre for cotton are slightly lower than those of the U.S. producers, reinforcing the former’s competitiveness. Moreover, USDA FAS data indicate that Brazilian cotton yields from 2021 to 2024 averaged 1.8 times that of U.S. yields, resulting in significantly lower costs per pound of cotton produced. Since Brazil’s production costs for cotton remain below market prices, its cotton producers have continued to operate profitably, enabling expanded production. As a result, Brazil’s cotton output has surged, and by 2023, it had surpassed U.S. cotton production, becoming the world’s third-largest cotton producer after China and India. In contrast, U.S. cotton producers have faced production costs exceeding gross revenues, leading to financial losses since 2022 (Liu 2024), coincidental with a severe drought that year in the U.S. Southern Plains.

The global cotton market is undergoing significant shifts, with Brazil emerging as a leading exporter and the United States facing new competitive pressures. Brazil’s ability to expand production efficiently, combined with China’s strategic diversification, has reshaped export patterns and global market shares. For U.S. producers, this evolving landscape underscores the importance of monitoring international market trends, production costs, and trade relationships. While challenges exist, understanding these dynamics can help growers make informed planting, marketing, and risk management decisions, ensuring continued competitiveness in a changing global market.

Figure 1. Top Three Global Cotton Exporters by Country and Year.

Data from the U.S. Department of Agriculture, Foreign Agricultural Service, Production, Supply and Distribution Database.

Liu, Yanguan, Gopinath Munisamy, and John Robinson. “How Brazil’s Rise in Global Cotton Markets Impacts U.S. Exports.” Southern Ag Today 5(41.3). October 8, 2025. Permalink

October 8, 2025
Cull Cow Prices See Just a Little Seasonal Decline

Cull cow prices typically decline this time of the year as beef and dairy cow culling ramp up and the beef market is fully past grilling season.  Cow prices this Fall have shown just a little seasonal decline as tight beef supplies keep prices high.

Southern Plains cow prices at auctions have been about $165 per cwt since mid-year, with a brief dip into the low $150s in the last 2 weeks.  Prices a year ago at this time were under $120 per cwt. and were declining to their Fall lows.  Cutter quality cows have declined from about $137 to about $129 per cwt over the last few weeks, showing a little more seasonal decline.  On the meat side, the boxed cow beef cutout and 90 percent lean boneless beef have shown little seasonal decline and are sitting at record levels.

Total cow slaughter includes dairy and beef cows.  Beef and dairy cow slaughter each exhibit a different seasonality based on production patterns.  Beef cow slaughter hits its peak in the Fall when most culling occurs around the country.  Dairy cow slaughter peaks early in the first quarter of the year but, does increase in the Fall.  The dairy herd has been expanding this year due to profits hitting over 9.5 million head on September 1, 2025, the most since 1993.  As the herd has grown, culling has increased.  For the year, total dairy cow slaughter is almost 19 percent smaller than the same period in 2024.  But, in the last 2 months dairy cow slaughter is equal to last year.  Beef cow slaughter remains well below last year but may begin to pick up seasonally in coming weeks.  In total, cow culling has closed the gap compared to last year in recent weeks but, it has not been enough to weaken prices.

Cull cow prices are going to stay high.  While a little more beef cow culling should occur this Fall even with larger dairy cow culling it won’t be enough to drastically boost supplies.  There is little evidence of consumers switching to competing meats indicating that demand remains quite good.  So, overall, this should be the best Fall cull cow market ever.

Anderson, David. “Cull Cow Prices See Just a Little Seasonal Decline.” Southern Ag Today 5(41.2). October 7, 2025. Permalink

October 7, 2025