An agricultural economist with the University of Illinois says the recent rally in the commodity markets could affect crop insurance payouts this year.

Speaking during a recent FarmDoc webinar, Gary Schnitkey said that if prices remain at current levels or higher through October, insurance payments will decline.

“We’ll have a projected price above $4.62, and we’ll need yield bosses on revenue protection policies and ECO and SCO,” he said. “That could happen, I suppose, in some counties. Remember that that’s a county level product.”

The projected price for revenue protection crop insurance is set using futures market averages over a defined discovery period, so when futures rally, the revenue guarantee rises and payments shrink unless yields fall far enough to offset the higher price floor. Revenue Protection (RP), Supplemental Coverage Option (SCO), and Enhanced Coverage Option (ECO) are the main federal safety-net tools farmers use; SCO and ECO supplement individual coverage at the county level, which is why Schnitkey framed any remaining payout potential as geographically limited.

Schnitkey also noted that ARC and PLC payments for the 2025 crop season, which are to be received this October, could also be reduced.

“And there is a potential for it to have a small impact on the ARC and PLC payments,” he said. “Remember, the marketing year runs from September to August. So, some of those August cash prices are going to be higher. Very small impact.”

The Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs, reauthorized under successive farm bills, trigger payments when county revenue or national prices fall below benchmarks set from historical averages. Because ARC benchmarks are based on a five-year Olympic average of prices and yields, higher prices gradually lift those guarantees in future years as well — one reason economists watch multi-year price trends, not just a single season, when assessing farm program exposure.

Schnitkey said the adjustments are simply a product of how the programs work, and suggested producers take advantage of the rally to lock in prices that should be above break-even levels for most operations. For growers, that framing points to the familiar trade-off in the current safety-net structure: the programs are designed to cushion low-price years, so a market recovery naturally shifts income from government payments back toward the marketplace — and marketing decisions regain importance relative to program enrollment choices.

Source: Brownfield Ag News, September 4, 2026, by Jared White.