Margin Coverage Option (MCO) Protects Farm Profit Margins
In today’s ag economy, managing risk is about more than yield or revenue – it’s about protecting your margin. With rising input costs and market volatility, even a strong yield can fall short on profitability. That’s why Margin Coverage Option (MCO) was created.
MCO is a new, area-based crop insurance endorsement designed to help you stay ahead of unexpected input cost spikes and price drops – providing peace of mind and additional protection when it matters most.
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What Is MCO?
MCO fills a critical gap between 86% and either 90% or 95% coverage levels. Like the Enhanced Coverage Option (ECO), it works alongside your existing baseline crop insurance policy – but MCO focuses on operating margin by factoring in both revenue and input costs.
This endorsement uses county-level data to evaluate margin performance, offering a simpler, more accessible path to margin coverage than traditional Margin Protection (MP). It does not require fixed or interest-cost inputs like an MP policy.
What’s Covered?
MCO helps shield your operation from margin loss due to both reduced revenue and rising input costs. Covered inputs include:
- Diesel
- Natural Gas
- Urea
- Diammonium Phosphate (DAP)
- Potash
Where MCO Really Shines
MCO works especially well in scenarios where input costs rise sharply or county revenues dip modestly – just enough to erode profits, but not enough to trigger a traditional Revenue Protection (RP) claim.
Producers without MCO can face margin pressure even when their yields are strong. That’s because RP is designed to protect against yield or price losses – not rising costs. With MCO, however, producers can receive payment when area-level input costs increase or revenue falls beyond the selected coverage threshold (90% or 95%), even if their individual fields are performing well.
Similarly, if fertilizer, fuel or other input prices spike, MCO helps cushion the blow –providing margin protection when your bottom line is vulnerable, even if commodity prices are holding steady. Because MCO is margin-based (revenue minus input costs), it offers a more holistic layer of coverage for today’s cost-conscious producers.
Farmers who keep a close eye on their operating margins – or who have experienced rising costs eroding profits despite healthy yields – should especially consider MCO as part of their risk management plan.
Curious How MCO Might Work for You?
The sales closing date for MCO is September 30, 2025, for the 2026 crop year. This makes now the ideal time to evaluate your crop insurance risk management strategy.
Every operation is unique. If you’re wondering how MCO might respond to different market shifts or input cost changes, your local Compeer insurance officer can walk you through you options to help you understand how certain events could affect potential payouts across coverages.
Let’s Talk About Margin Risk Before You’re Exposed
If input costs are on your radar, or you’re looking to increase your margin protection without overcomplicating your plan, MCO may be the right fit. Let’s explore what it could mean for your operation.
Sales closing for MCO is September 30, along with margin protection (MP) and spring-planted wheat coverage.
Crop Insurance
Crop insurance provides farmers with risk management tools to protect against crop loss or the loss of revenue due to declines in crop prices.
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