MCO offers a unique combination of area coverage with a margin-based trigger.
Margin Coverage Option (MCO) Crop Insurance Endorsement
The Margin Coverage Option (MCO) is a federal crop insurance endorsement that helps protect your farm’s operating margin from unexpected decreases caused by reduced county yields, lower commodity prices, increased prices for certain inputs, or a combination of these risks.
MCO provides area-based coverage with a margin-based trigger and can be added to eligible underlying federal crop insurance policies, including YP, RP, RP-HPE, or APH. This option may help farmers strengthen their overall risk management plan by covering a portion of the deductible on their underlying policy.
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.
- MCO indemnities are triggered when the county-level operating margin falls below the selected coverage level, offering area-based margin protection rather than individual farm-level yield or revenue coverage.
Curious how this product compares with other area plans? View our ECO/MCO/SCO Comparison Flyer.
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?
Margin Protection Focus
Offers an additional layer of financial risk management beyond traditional yield or revenue-based endorsements.
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%.
How is MCO different from ECO or SCO?
Unlike ECO and SCO, which provide supplemental county-level yield or revenue coverage, MCO protects operating margins by factoring in both commodity prices and input costs. This makes MCO a strategic option for producers concerned about price volatility and rising production expenses.
Who Is MCO Right For?
Learn how MCO works and if it’s the right fit for you with FMH experts on our FMH InsureCast podcast.
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