Is the New Margin Coverage Option Right for You?
What is MCO?
- Reduced county yields
- Reduced commodity prices
- Increased prices of certain inputs
- Any combination of these perils
MCO covers a portion of your underlying policy’s deductible similar to other area-based products − but it also combines it with a margin-based loss trigger like Margin Protection (MP).
How is MCO different?
An important consideration for producers considering the switch to MCO is how coverage differs from other products already available, including MP, Enhanced Coverage Option (ECO), or Supplemental Coverage Option (SCO).
MCO is unique with coverage based on a combination of county-level yield data and margin-based triggers – before only offered in separate federal products.
The MCO federal premium subsidy is now offered at the 80% level, the same level as other area-based products: ECO and SCO.
Where is MCO offered and what crops are covered?
MCO is available for corn, cotton, grain sorghum, rice, soybeans, and spring wheat in the following states:
What are important dates for MCO?
The Sales Closing Date (SCD) for most MCO-eligible crops is September 30; for rice, the SCD is either January 31 or February 28 depending on the state and county.
When do policyholders receive loss payments for MCO?
If a loss payment is due, payments are made when final county yields are available, in the summer of the following year – generally June.
How is the MCO margin calculation determined?
When determining the margin calculation for a loss payment, the following inputs are included for most crops, except soybeans, which require fewer inputs.
- Corn | Cotton | Grain Sorghum | Rice | Wheat: Diesel, natural gas (irrigated crops), diammonium phosphate, urea, and potash.
- Soybeans: Diesel, diammonium phosphate, and potash.
Depending on which MCO trigger you select, MCO begins to pay when area margin falls below 90 or 95% of the expected margin.