By Josh Gossman | Crop Insurance Agent | Midwest Bank Agency
Agriculture is the backbone of Nebraska’s economy. The state is known for its vast farmlands, diverse crops, and robust livestock operations, making it one of the largest producers of corn, soybeans, and cattle in the U.S. However, with this level of productivity comes significant risks. From unpredictable weather to market volatility, Nebraska’s farmers face many uncertainties that can threaten their livelihoods.
Agriculture insurance has become an essential tool for managing these risks, offering a safety net to protect both crops and livestock from unexpected losses. Here’s a closer look at the different types of agriculture insurance available to farmers in Nebraska and through Midwest Bank Agency, including multi-peril crop insurance, livestock risk protection, crop hail insurance, and coverage for pasture, rangeland, and forage (PRF).
Multi-Peril Crop Insurance (MPCI)
Multi-Peril Crop Insurance (MPCI) is one of the most commonly used forms of crop insurance in Nebraska. As its name suggests, MPCI covers many risks, including natural disasters like drought, hail, flooding, and disease. It provides farmers with the peace of mind that comes from knowing their crops are protected from the most common perils.
MPCI policies are backed by the federal government and administered by private insurers, offering several coverage options based on the farmer’s needs. Farmers can choose yield protection, revenue protection, or a combination of both. Yield protection insures against losses due to a reduction in yield, while revenue protection also factors in price fluctuations in the marketplace.
Given Nebraska’s exposure to extreme weather conditions—especially droughts, hailstorms, and early freezes—MPCI has become a crucial tool for managing risk. It enables farmers to stabilize income, even when natural disasters impact crop yield or market prices drop unexpectedly.
Livestock Risk Protection (LRP)
Livestock farming plays a significant role in Nebraska, particularly in the production of beef and pork. However, fluctuations in market prices can make livestock operations highly unpredictable and risky. Livestock Risk Protection (LRP) insurance helps mitigate this risk by offering price protection for cattle, swine, and lamb.
LRP provides protection against declining market prices by allowing producers to lock in a floor price for their livestock, without having to sell on the futures market. If the actual market price at the time of sale is below the insured price, the farmer receives an indemnity payment to cover the difference.
This coverage is especially valuable for cattle ranchers in Nebraska, where market prices can be volatile due to factors like changing consumer demand, trade disputes, or economic conditions. LRP provides a buffer, helping farmers maintain profitability even when market conditions are unfavorable.
Crop Hail Insurance
While MPCI provides broad coverage for various perils, it may not offer enough protection against isolated hail damage. Nebraska is in a region where hailstorms can occur frequently during the growing season, and even a short hailstorm can cause significant damage to crops like corn and soybeans.
Crop hail insurance is designed to fill this gap, providing farmers with additional protection specifically against hail damage. Unlike MPCI, which is based on overall yield or revenue, crop hail insurance offers acre-by-acre coverage. This means farmers are compensated for the actual damage caused by hail, even if the rest of their crop is unaffected.
For Nebraska farmers, where hailstorms can be a major threat, crop hail insurance can distinguish between a profitable year and financial loss. It’s a tailored solution for those looking to safeguard their crops against one of nature’s most unpredictable perils.
Pasture, Rangeland, and Forage (PRF) Insurance
Nebraska’s ranchers rely heavily on the health of their pastures, rangelands, and forage to sustain their livestock. When drought or other adverse weather conditions reduce the quality or availability of forage, ranchers are left with few options other than to buy expensive feed or reduce their herd size.
Pasture, Rangeland, and Forage (PRF) insurance is designed to protect farmers and ranchers against losses caused by insufficient rainfall. This insurance uses a rainfall index to measure precipitation in specific geographic areas, providing payouts when rainfall falls below historical averages during a selected period. PRF coverage helps ranchers maintain their operations by offsetting the costs of purchasing additional feed or providing compensation for lost forage.
With Nebraska’s susceptibility to droughts, PRF insurance has become a valuable risk management tool for ranchers. It ensures they have the financial support to maintain herd health and productivity, even in dry years.
The Importance of Tailored Insurance Solutions for Nebraska Farmers
Nebraska’s agriculture industry is highly diverse, with operations ranging from large-scale grain farms to family-owned cattle ranches. Because of this, there is no one-size-fits-all solution for agriculture insurance. Each farmer or rancher must assess their unique risks and choose the insurance products that best fit their needs.
For instance, a corn farmer in central Nebraska may prioritize MPCI and crop hail insurance to protect against yield losses and hail damage. On the other hand, a cattle rancher in the Sandhills may place more emphasis on PRF and LRP insurance to guard against drought and market fluctuations.
Working with knowledgeable insurance agents who understand the specific challenges of Nebraska agriculture is key to creating a comprehensive risk management plan. Many agents specialize in ag insurance, offering expertise in how different policies interact and complement each other to provide maximum coverage.
Midwest Bank Agency is Here to Help Farmers
Agriculture in Nebraska is both rewarding and risky. Farmers and ranchers must contend with numerous factors beyond their control, from the weather to market prices. Having the right insurance coverage can make all the difference in whether an operation thrives or struggles in the face of these challenges.
Multi-peril crop insurance, livestock risk protection, crop hail insurance, and pasture, rangeland, and forage insurance offer tailored solutions that address the specific needs of Nebraska’s agriculture community. By taking a proactive approach to risk management, farmers can protect their operations, ensure financial stability, and continue feeding the world.
If you’re a Nebraska farmer, now is the time to review your coverage options and ensure that you have the right protection for the upcoming season. By partnering with an experienced insurance agent from Midwest Bank Agency, you can tailor your policies to safeguard your crops and livestock—and ultimately, your livelihood.