2025 Crop Insurance Payments May Be Limited

Due to the strong yield potential in many areas of the Upper Midwest, the number of corn and soybean producers that qualify for 2025 crop insurance indemnity payments may be limited. However, there are portions of the region that have dealt with excessive rainfall and severe storms during July and August that has caused damage to crops. There has also been some dryness in some portions of the eastern Corn Belt and other areas, along with an early frost threat in northern parts of the region. These weather issues could result in yield reductions on some farms across the region, which together with potential price declines from the crop insurance Spring base prices on March 1, could increase the likelihood of 2025 crop insurance indemnity payments for some producers. 
With Federal Crop Insurance, every year is different, and with the multiple options available to producers, there are many variable results from crop insurance coverage at harvest time. The 2025 crop year will be no different, with some producers choosing Yield Protection (YP) policies (yield only), Revenue Protection (RP) policies (yield and price) and RPE policies (RP policies without harvest price protection). Producers also carry different levels of insurance coverage on various crops. There is further variation, with some farmers having “optional units” for their crop insurance coverage while other farmers insure with “enterprise units”. In addition, some producers also have enhanced insurance coverage through private insurance companies, or through the “Supplemental Crop Option” (SCO) and “Enhanced Coverage Option” (ECO) policies that were available. 
In the Midwest, most corn and soybean producers in recent years have tended to secure some level of revenue (RP) crop insurance coverage, rather than standard yield-only (YP) policies. Farm operators like the flexibility of the RP policies that provide insurance coverage for reduced yields, as well as in instances where the harvest price drops below initial base price. RP policies also offer enhanced insurance coverage in instances when the harvest price rises above the initial Spring price. 
The crop insurance harvest prices for corn and soybeans are based on the average Chicago Board of Trade (CBOT) price for December corn futures and November soybean futures, during the month of October, with the harvest prices being finalized on November 1. The Spring base prices for corn and soybeans are based on the average CBOT prices for December corn futures and November soybean futures during the month of February. The final harvest prices are used to calculate the value of the 2025 harvested crops for all revenue protection (RP) and RPE crop insurance policies. The harvest price is also used determine the revenue guarantee for the RP policies that include harvest price protection, if the harvest price is higher than the base price. The base price is used to determine revenue guarantees for all RPE insurance policies and for RP policies when the Spring price is lower than the final harvest price, which appears likely for both corn and soybeans in 2025 at this time. 
The established Spring base prices for 2025 YP, RP, and RPE crop insurance policies were $4.70 per bushel for corn and $10.54 per bushel for soybeans. These base prices will be the payment rate for 2025 YP policies for corn and soybeans. These base prices will also likely serve as the final price to calculate revenue guarantees for determining potential RP and RPE crop insurance indemnity payments for corn and soybeans in 2025, based on current harvest price estimates (as of 9-08-25). If the harvest price for corn rises to $4.70 or higher, or the soybean harvest price rises to $10.54 or higher, then the harvest price would be used to calculate potential RP Indemnity payments; however, the Spring price would be used for any RPE policies. 
The 2025 harvest price estimates (as of 9-0-25) are near $4.15 per bushel for corn and $10.25 per bushel for soybeans. The harvest price will be used to calculate the final revenue amount for all revenue protection (RP) and revenue protection with harvest price exclusion (RPE) policies for corn and soybeans. Since the harvest price for corn and soybeans appears likely to be lower than the base price, it is highly probable that 2025 indemnity payments will begin at higher final farm yield levels than the RP insurance policy level. 
For example, on an 85% RP policy on corn, with a 200 bushel per acre APH yield and a $4.15 per bushel harvest price, 2025 crop insurance indemnity payments would begin at a yield of 192.5 bushels per acre (near 96.2 percent of the APH yield). If the harvest price increases to $4.35 per bushel, the payments would begin at a yield near 184 bushels per acre (near 92 percent of the APH yield). Based on the final soybean harvest price estimate of $10.25/bu. and an APH yield of 60 bushels per acre, with an 85% RP insurance policy, crop insurance indemnity payments would begin at 52.4 bushels per acre (near 87.4% of the APH yield). If the final harvest price increases to $10.55 per bushel or higher, indemnity payments would begin near 51 bushels per acre (very near 85% of the APH yield), and be calculated at the final harvest price. 
Optional Units versus Enterprise Units 
Farm operators in areas with variable yield losses on different farm units that chose “optional units” for their 2025 crop insurance coverage rather than “enterprise units” may be in a more favorable position to collect potential indemnity payments on this year’s crop losses. “Enterprise units” combine all acres of a crop in a given county into one crop insurance unit, as compared to “optional units”, which allow producers to insure crops separately in each township section. Traditionally, more crop producers have opted for “enterprise units”, due to lower crop insurance premium levels; however, there has been an increase in the selection of “optional units” more recently. Many crop losses in 2025 will likely be highly variable from farm-to-farm in the same County, which will favor the “optional units” for collecting any potential crop insurance indemnity payments. 
For example ……assume that producers A and B both have 5 separate farms in the same county with an APH corn yield of 200 bushels per acre, and that the overall average 2025 corn yield on all farms was 195 bushels per acre. However, three of the farms were 215 bushels per acre each, and the other two farms were 175 bushels per acre each. Also assume a final corn harvest price of $4.10 per bushel. Producer A has an 85% RP policy with optional units and producer B has an 85% RP policy with enterprise units. Producer A, with the optional units, would receive no insurance payment on the three farms with the higher yield; however, that farmer would receive an indemnity payment of $82 per acre on the two farms with the lower yield. Producer B with the enterprise units would receive no insurance payments on any farms, based on the average yield for all farms. 
Producers that have crop revenue losses in 2025, which could result in potential crop insurance indemnity payments, should properly document the yield losses, regardless of their type or level of insurance coverage. Farm operators that collect very large indemnity payments should be aware that they may be subject to an audit, which may require more detailed documentation of losses. It is important for producers who are facing crop losses in 2025 to understand their crop insurance coverage and the calculations used to determine crop insurance indemnity payments. 
A reputable crop insurance agent is the best source of information to make estimates for potential 2025 crop insurance indemnity payments or to find out about documentation requirements for crop insurance losses, as well as to evaluate future crop insurance options. Details on various crop insurance policies can be found on the USDA Risk Management Agency (RMA) website at: https://www.rma.usda.gov/. 
Kent Thiesse has prepared an Information Sheet titled “2025 Crop Insurance Payment Potential”, which is available by contacting: [email protected]. The University of Illinois FarmDoc web site also contains some good crop insurance information and spreadsheets to estimate crop insurance payments. The FarmDoc web site is located at: https://farmdoc.illinois.edu/crop-insurance 
For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group Phone - (507) 381-7960; E-mail - [email protected]