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Performance of SCO and ECO in the Midwest

Author

Listed:
  • Schnitkey, Gary
  • Sherrick, Bruce
  • Zulauf, Carl
  • Paulson, Nick
  • Baltz, Jim

Abstract

Supplemental Coverage Option (SCO) is a county-level insurance product that adds a band of coverage over the underlying COMBO crop insurance product up to an 86% coverage level. Enhanced Coverage Option (ECO) provides an additional band from 86% up to either 90% or 95% coverage again based on the county-wide outcome. This article evaluates SCO and ECO for non-irrigated corn and soybeans in the Midwest states from 2015 to 2023. If purchased each year, results show that SCO and ECO had very low payments relative to premiums, particularly for Illinois, Indiana, Iowa, Ohio, and Wisconsin. Given the loss performance, justifying the use of SCO and ECO to supplement coverage is difficult, particularly in regions with low yield variability.

Suggested Citation

  • Schnitkey, Gary & Sherrick, Bruce & Zulauf, Carl & Paulson, Nick & Baltz, Jim, 2025. "Performance of SCO and ECO in the Midwest," farmdoc daily, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics, vol. 14(136).
    • Handle: RePEc:ags:illufd:358470
    DOI: 10.22004/ag.econ.358470
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    File URL: https://ageconsearch.umn.edu/record/358470/files/fdd072324.pdf
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    References listed on IDEAS

    as
    1. Paulson, Nick & Coppess, Jonathan, 2014. "2014 Farm Bill: The Supplemental Coverage Option," farmdoc daily, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics, vol. 4, February.
    2. Paulson, Nick & Schnitkey, Gary & Swanson, Krista & Zulauf, Carl, 2020. "The New Enhanced Coverage Option (ECO) Crop Insurance Program," farmdoc daily, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics, vol. 10(203), November.
    3. Paulson, Nick & Coppess, Jonathan, 2014. "Further Discussion of the Supplemental Coverage Option," farmdoc daily, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics, vol. 4, April.
    Full references (including those not matched with items on IDEAS)

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