OMAHA (DTN) -- It's early in the game for thinking about crop insurance policy options for 2026 spring crops, but March 16 will be coming fast once price protection levels are set throughout February.

So, how attractive is it going to be to stack an area-based policy on top of your multi-peril revenue policy plan?

Congress last year tweaked two area-based policy options that farmers can add to their individual crop-insurance policies: the Supplemental Coverage Option (SCO) and the Enhanced Coverage Option (ECO).

First off, premium subsidies for SCO and ECO are both now set at 80%, reducing the costs for producers to tack on the policies to their coverage. That change alone could dramatically increase enrolled acres for both policies.

Last year, RMA boosted the premium subsidy for ECO to 65% and saw a spike in acreage covered under ECO, jumping from 15.6 million acres in 2024 to 61.8 million acres in 2025.

SCO also was changed to allow farmers to buy a policy regardless of whether they enroll in Agricultural Risk Coverage (ARC) or Price Loss Coverage (PLC). That decision should also boost SCO enrollment for 2026 crops. SCO in 2026 will cover countywide yield or revenue losses from that 80% level up to 86%. SCO covered 12.2 million acres in 2025 and roughly the same level of acreage in 2024.

ECO still maintains some restrictions such as it cannot be combined with certain area policies or the cotton insurance program STAX. ECO offers two options covering countywide losses from 86% to 90% or 86% to 95%.

Cory Walters, an associate professor in agricultural economics at the University of Nebraska-Lincoln, offered some food for thought about SCO and ECO policy decisions going into 2026.

1 -- RISK OF LOWERING RP COVERAGE

Given the financial challenges producers face, they might be looking at lowering their individual farm coverage for a revenue policy (RP) from 85% or 80% down to 75%, then supplementing that policy with SCO to bump protection back up to 86%.

Those higher premium subsidies for SCO and ECO may make those options hard to turn down, but the decision is not a simple one.

Cutting back on that individual policy could drop crop insurance premium costs by roughly 40% in some areas, but doing so also adds some financial risks. Is the cost savings worth putting a share of your protection level at the county level rather than the farm level?

"You think you have protection because your insurance documents are going to tell you with SCO, you have this protection, but you are sampling from a fundamentally different yield distribution," Walters said.

There are going to be cases where that shift works well, but also cases where it is simply not a good idea.

2 -- AREA NOT ALWAYS THE COUNTY

In some areas, especially on the margins of production, the "area" is not always an individual county, but could also include multiple neighboring counties.

If you are growing a crop that doesn't have a lot of acreage in your area, the scope of an area policy can increase dramatically. For instance, a producer growing non-irrigated sorghum in eastern Nebraska looking at SCO or ECO could be grouped with as many as 25 counties, depending on the location.

The number of counties -- and even states -- factored into an area becomes even larger for growing irrigated grain sorghum in parts of Nebraska, Walters said.

"If you are thinking about these policies and you have a particular crop, you need to go find out what that production area is," Walters said.

He added, "And my question then would be, at what point does the area get so large that it's potentially not a good idea to even have a policy available?"

So, check with crop insurance agents about whether SCO or ECO includes adjacent or even "catty corner" to each other and how that would work.

3 -- YIELD ISSUES: IRRIGATED AND NON-IRRIGATED

Yields are updated yearly and come from USDA Risk Management Agency (RMA) data.

Farmers have to know what is going on with yields both on their farms and in their counties to understand whether they are going to see an advantage or disadvantage with a SCO or ECO policy.

One consideration when looking at that county data for your crops is: How are overall county yields trending?

"If your farm yields are going up and the county yields are constantly staying flat, then that is eroding the usefulness of the program," Walters said.

Then there are questions about irrigated and non-irrigated yields in the same county. In Nebraska, for instance, there are counties in eastern Nebraska in which both the corn and soybean irrigated and non-irrigated yields are listed as identical.

In some cases, counties that have split irrigated and non-irrigated yields in the past may again only list a single yield. Platte County, Nebraska, for instance, in 2025 listed non-irrigated corn yields at 187.6 bushels per acre (bpa) while irrigated yields were 232.6 bpa. For 2026, Platte County shows both irrigated and non-irrigated yields at 232.6 bpa.

Yet, in neighboring Colfax County, irrigated and non-irrigated yields come in for 2026 at 197.5 bpa -- significantly lower and closer to a typical non-irrigated yield.

"That is a little bit of my angst with this program is that it is wildly different by county," Walters said.

Yet, in Colfax County, an SCO/ECO policy could look attractive to irrigated farmers because they likely won't face a yield loss, while a drought could dramatically bring down yields for non-irrigated acres.

Walters produced a map showing multiple counties in several states where RMA has different risk rates for irrigated and non-irrigated yields but posts the same county yield for both practices. He said it's important to check with your crop insurance agent about whether your individual county falls into that situation.

4 -- COUNTY VERSUS FARM YIELD

It is just as likely that you have a loss on your farm, but the county has a good year. Under that scenario, SCO and ECO won't pay out.

"If you have a problem on your farm, but the county has nothing, there's no payment," Walters said.

Both farm size and county size matter here. Basically, a smaller farm in a larger county is less likely to trigger an SCO or ECO payment.

"There is a much higher chance of a bad outcome with the county level policies and a small farm," Walters said. He added, "So I would encourage people to be very careful about this."

That issue becomes even more pronounced if the farmer is growing a crop where the area factored into the policy includes multiple counties.

Conversely, a farm that has acres distributed around the county has a higher likelihood of triggering a payment from an area-based plan.

5 -- RISK MANAGEMENT VERSUS LOTTERY TICKET

So, there are multiple factors to consider if a farmer wants to incorporate SCO or ECO policies as a legitimate risk management strategy. At the same time, SCO and ECO policies also are relatively inexpensive add-ons to an individual policy.

"These things are so cheap maybe you buy the darn thing as a lottery ticket," he said. "Buy it, forget about it and do not change your underlying multi-peril policy. Know what you're buying and the reasons for it."

To watch the full webinar, go to: https://cap.unl.edu/….

Chris Clayton can be reached at Chris.Clayton@dtn.com

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