MCO offers a unique combination of area coverage with a margin-based trigger.
Margin Coverage Option (MCO) Overview
The Margin Coverage Option (MCO) is a federal crop insurance product that provides area-based coverage against an unexpected decrease in operating margin caused by:
- 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 products like the Supplemental Coverage Option (SCO) and Enhanced Coverage Option (ECO) but with a margin-based trigger like Margin Protection (MP).
How MCO Works
- MCO is purchased as an endorsement to your underlying federal crop insurance policy: YP, RP, RP-HPE or APH.
- You may choose any coverage level available for each crop and irrigated or non-irrigated practice, but coverage levels cannot vary by type.
- MCO covers a band from 86% up to 90 or 95% of expected crop value. The value is based on USDA-established expected and final area yields.
Determining The Margin
When determining the margin calculation for a loss payment, the following inputs are included for most crops, except soybeans, which do not factor urea.
CORN | COTTON | GRAIN SORGHUM | RICE | WHEAT:
Diesel, natural gas (irrigated crops only), diammonium phosphate, urea, and potash.
SOYBEANS:
Diesel, diammonium phosphate, and potash.
MCO Availability
MCO is available for corn, cotton, grain sorghum, rice, soybeans, and spring wheat in select counties in the following states:
| Corn & Soybeans | IL, IN, IA, KS, MI, MN, MO, NE, ND, OH, SD, WI |
|---|---|
| Cotton & Grain Sorghum | TX, OK, KS |
| Rice | AR, CA, LA, MS, MO, TX |
| Spring Wheat | CA, ID, MN, MT, ND, OR, SD, WA |
What Are The Benefits?
SIMPLER, COMBINED PROTECTION
MCO uses a unique combination of area coverage with a margin-based trigger.
HIGHER COVERAGE BAND
MCO offers a band of protection from 86% up to 90 or 95% of your expected crop value.
STAX-FRIENDLY
When combined with the Stacked Income Protection Plan (STAX) at the 90% area loss trigger, MCO covers a band from 90-95%.
Coming Soon!
Who Is MCO Right For?
Learn how MCO works and if it’s the right fit for you with FMH expert Ken Ripley on our FMH InsureCast podcast.