Managing Risk in the 2025 Ag Economy

  • February 14, 2025

From the Farm Bill extension to the new administration, recent political events and the pricing landscape affect the real commodity price concerns farmers are facing. Below, find excerpts from FMH’s latest InsureCast episode with special guest Chip Flory, host of AgriTalk Radio, on 2025 ag economy impacts to farmers.

Current State of US Ag

The American ag economy is going through a huge transition, said Flory. “The way the cash flow has just drained out of the industry in late 2024, is nothing short of scary.”

The ongoing low price environment challenges farmers to manage input costs. “Right now, it’s very easy as a farmer to get down – this next year, break-evens may be very difficult to find,” said Ken Ripley, FMH Assistant Vice President – Regional Sales Manager.

However, Flory noted that when surveyed about their outlook recently, “there is optimism for twelve months out, five years out” among farmers.

Using Crop Insurance to Manage Risk

Continued uncertainty in the markets means that farmers will need to consider their risk management strategy carefully

in 2025.

“Every risk management plan should start with crop insurance. Period. End of story,” said Flory.

Ripley highlighted Enhanced Coverage Option (ECO), where the subsidy rate for 2025 is moving from 44 percent to 65 percent, as a product that could be crucial for many farmers. “You’ve got to look at ECO as a subsidized put, and it gives you yield protection along with it,” he said. “Packages where you can maybe add on some county plans just to give that extra cushion have definitely been on my radar for 2025,” he said.

Ripley emphasized the need for producers to understand their break-evens and use that information to maximize their crop insurance protection. “It’s not going to be as fun as it’s been in the past. But the good news is, we still have great tools out there that we can customize to fit every producer’s needs.”

 

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