Due to the strong yield potential in many areas of the Upper Midwest, the number of corn and soybean producers that qualify for 2025 crop insurance indemnity payments may be limited. However, there are portions of the region that have dealt with excessive rainfall and severe storms during July and August that has caused damage to crops. There has also been some dryness in some portions of the western Corn Belt, along with an early frost threat in northern parts of the region. These weather issues could result in yield reductions on some farms across the region, which together with potential price declines from the crop insurance base prices on March 1, could increase the likelihood of 2025 crop insurance indemnity payments for some producers.
With Federal Crop Insurance, every year is different, and with the multiple options available to producers, there are many variable results from crop insurance coverage at harvest time. The 2025 crop year will be no different, with some producers choosing Yield Protection (YP) policies (yield only) versus Revenue Protection (RP) policies (yield and price), and producers having different levels of coverage on various crops. Producers also vary on having “optional units” versus “enterprise units” for their crop insurance coverage. In addition, some producers also have enhanced insurance coverage through private insurance companies, or through the “Supplemental Crop Option” (SCO) and “Enhanced Coverage Option” (ECO) policies that were available.
In the Midwest, most corn and soybean producers in recent years have tended to secure some level of revenue (RP) crop insurance coverage, rather than standard yield-only (YP) policies. Farm operators like the flexibility of the RP policies that provide insurance coverage for reduced yields, as well as in instances where the harvest price drops below initial base price. In 2025, crop insurance loss calculations for corn and soybeans with RP policies may function differently, depending on the harvest price for corn and soybeans being below the 2025 crop insurance base prices, which were finalized on March 1.
The established crop insurance base prices for 2025 YP and RP crop insurance policies are $4.70 per bushel for corn and $10.54 per bushel for soybeans. These base prices will determine potential payment eligibility and amount for 2025 YP policies for corn and soybeans. These base prices will also serve as the final price to calculate revenue guarantees for determining potential RP crop insurance indemnity payments for corn and soybeans, if the harvest price is lower than the base price. If the harvest price is higher than the base price, the harvest price will be used to calculate crop insurance payment potential for RP policies.
The final harvest price for RP policies with harvest price protection is based on the average Chicago Board of Trade (CBOT) price for December corn futures and CBOT November soybean futures during the month of October, with prices finalized on November 1, 2025. If the final CBOT price for December corn futures or November soybean futures is higher than the established base prices, the harvest price would then be used to determine the RP insurance guarantees, as opposed to the base price. The harvest price is also used to calculate the value of the actual harvested bushels for all RP insurance policies. As of August 25, the crop insurance harvest price estimates were near $4.10 per bushel for corn and $10.50 per bushel for soybeans.
The level of insurance coverage that a producer chooses can result in some producers receiving crop insurance indemnity payments, while other producers receive no indemnity payments, even though both producers had the same adjusted APH yield and the same final yield. For example, at an adjusted APH corn yield of 200 bushels per acre, a producer with 85% RP coverage would have a yield guarantee of 170 bushel per acre, and a revenue guarantee of $799 per acre, while a producer with 75% coverage would have a yield guarantee of 150 bushels per acre, and a guarantee of $705 per acre. If the actual 2025 yield is 175 bushels per acre, with a $4.10 per bushel harvest price, the producer with 85% coverage would receive a gross indemnity payment of $82 per acre, while the producer with 75% coverage would not receive an indemnity payment.
The likelihood of a lower crop insurance harvest price for corn, based on the average CBOT December corn futures price during October, increases the likelihood of crop insurance indemnity payments for Upper Midwest corn producers that have a yield loss below the APH yield in 2025, and have an 85% RP insurance policy in place. Based on a CBOT December corn price projection near $4.10/bu., indemnity payments for corn could begin at final yields that are about 4-6 bushels per acre below the typical APH yields for many farmers in the Upper Midwest with 85% RP insurance policies. For example, with an 85% RP policy on corn with a 200 bushel per acre APH yield and a $4.10 per bushel harvest price, 2025 crop insurance indemnity payments would begin at a yield below 195 bushels per acre. If the harvest price increases to $4.35 per bushel, the payments would begin at a yield below 184 bushels per acre (92 percent of APH yield).
The situation for soybeans will likely be different than corn, based on current CBOT November soybean price estimates, which could limit potential 2025 indemnity payments for soybeans. Based on a soybean harvest price estimate of $10.50/bu. and an APH yield of 60 bushels per acre, crop insurance indemnity payments would begin near 51 bushels per acre. If the final soybean harvest price is $10.54 per bushel or higher, the harvest price will also serve as the base price for RP insurance payment calculations. This would mean that payment calculations for RP policies will function similarly to YP calculations, with the exception that RP policies will use the higher harvest price for calculations rather than the spring base price.
A majority of Midwest corn and soybean producers utilize “enterprise units” for their crop insurance coverage, which combines all acres of a crop in a given county into one crop insurance unit. By comparison, “optional units” allow producers to insure crops separately in each township section. Premium rates are somewhat higher with optional units. Enterprise units work quite well with RP policies to protect against price drops during the growing season, and when a producer has most of their land in the same general area. Optional units are preferable when a producer has a variety of land that is spread across a wide area in a county, or when producers have individual farms that are highly susceptible to natural disasters, such as flooding, drought, etc.
For example, assume that producers A and B both have five separate farms in the same county with an APH corn yield of 200 bushels per acre, and that the overall average 2025 corn yield on all farms was 195 bushels per acre. However, three of the farms were 215 bushels per acre each, and the other two farms were 175 bushels per acre each. Also assume a final corn harvest price of $4.10 per bushel. Producer A has an 85% RP policy with optional units and producer B has an 85% RP policy with enterprise units. Producer A, with the optional units, would receive no insurance payment on the three farms with the higher yield; however, that farmer would receive an indemnity payment of $82 per acre on the two farms with the lower yield. Producer B with the enterprise units would receive no insurance payments on any farms, based on the average yield for all farms.
Producers that have crop revenue losses in 2025, which could result in potential crop insurance indemnity payments, should properly document the yield losses, regardless of their type or level of insurance coverage. A reputable crop insurance agent is the best source of information to make estimates for potential 2025 crop insurance indemnity payments, and to find out about documentation requirements for crop insurance losses. Farm operators that collect very large indemnity payments should be aware that they may be subject to an audit by the USDA Risk Management Agency (RMA), which may require more detailed documentation of losses. It is important for producers who are facing crop losses in 2025 to understand their crop insurance coverage and the calculations used to determine crop insurance indemnity payments.
Kent Thiesse has prepared an Information Sheet titled “2025 Crop Insurance Payment Potential,” which is available by contacting: kentthiesse@gmail.com. The University of Illinois FarmDoc web site also contains some good crop insurance information and spreadsheets to estimate crop insurance payments. The FarmDoc web site is located at https://farmdoc.illinois.edu/crop-insurance.
Kent Thiesse is a Farm Management Analyst from Lake Crystal, Minn. He can be reached at (507) 381-7960 or kentthiesse@gmail.com.
