If you purchased the ECO (Enhanced Coverage Option) on your USDA crop insurance, you know it can be a powerful enhancement to your farm risk management. ECO protects you at a higher coverage level than standard crop insurance, potentially from 86 percent up to 90 or 95 percent of your county’s expected yield and/or revenue.
The USDA has increased its premium subsidy for ECO to 65%, making it more affordable for many farmers. As a result, adoption of the program has grown quickly in 2024 and 2025.
What Is ECO?
ECO is an optional add-on to your USDA crop insurance policy that helps cover a portion of your yield and/or revenue loss at the county level. It pays when your county average yield and/or revenue falls below your chosen coverage band. Assuming you selected Revenue Protection, your potential ECO payout is calculated using two factors: (i) Price, which is the difference between the Projected Price (calculated in February) and the average futures price during the harvest price discovery period (the month of October), and (ii) Yield, which compares county-wide yields with the historical average.
Example: For 2025, the Projected Price, calculated in February, is $4.70/bu for corn and $10.54/bu for soybeans. Assuming county-wide yields equal the average, and if you selected Revenue Protection with a 95% trigger level, then your ECO will start to pay out for corn at $4.465/bu and for soybeans at $10.013/bu.
Why Hedge Your ECO Payouts?
Corn: As of mid-August 2025, prices for corn are at five-year lows. Any rally in corn prices from now until the end of October could substantially shrink or even eliminate your potential ECO payout.
Soybeans: Prices are currently above the estimated ECO 95% trigger level, but there is always the potential for pricing softness between now and October.
How AcreHedge Can Help
An AcreHedgeTM is a contract that we manage for you. With an AcreHedgeTM UP strategy, the goal is to help protect your ECO payout if prices increase during the harvest price discovery period, while incurring limited downside risk if they continue to fall.
Here’s what all this can mean for you:
- If prices rally during the harvest price discovery period (month of October), then your ECO payout could shrink. An AcreHedgeTM UP can help offset that loss.
- If prices continue to fall, then you will still be able to collect your ECO payout with an additional, limited cost from the AcreHedgeTM. If you forward sell some of your crop in conjunction with entering into an AcreHedgeTM, then your ECO payout should cover most of the cost of the AcreHedgeTM, and you will still get to keep some of the upside from any price rally.
This approach gives you a way to protect the value of your ECO insurance coverage without having to monitor the market every day.
You can enter into an AcreHedgeTM contract without opening a brokerage account, making a deposit, or posting margin.
The Takeaway
ECO can be an important part of a strong farm risk management plan. However, your payout is still tied to the market and the timing of price changes. AcreHedgeTM UP can give you protection during the harvest price discovery period to help you lock in some of your potential payout while prices are low.
If you have ECO coverage, it may be worth exploring how an AcreHedgeTM can help. Call or text us at 479-222-0887 or email members@acrehedge.com to talk with our team.