Margin Coverage Option

What is Margin Coverage Option (MCO)?

MCO is a powerful risk management tool designed to protect your operation’s profit margin. It provides area-based coverage when your operating margin (revenue minus input costs) declines due to lower yields, falling prices, rising input costs or a combination of all three.

Why should I consider MCO?

MCO helps you:

• Protect against rising input costs.
• Guard against declining commodity prices.
• Strengthen your overall risk management strategy.
• Fill coverage gaps left by traditional policies.

How does MCO work?

MCO tracks margin performance at the county level, not individual farm results. When the area margin drops below your selected trigger level, a payment may be made, even if your own farm performs differently.
It works alongside existing programs by covering a specific band of risk, helping fill gaps in your protection strategy.

What makes MCO different from other coverage options?

MCO complements programs like SCO (Supplemental Coverage Option) and ECO (Enhanced Coverage Option) by focusing on margin protection instead of just revenue or yield.

• Covers margin losses caused by both price and input cost changes.
• Provides coverage from 86% up to 90% or 95% of expected crop value.
• Can extend protection up to 95% when paired with STAX (for cotton).

What crops are eligible for MCO?

MCO is available for corn, soybeans, cotton, grain sorghum, rice and spring wheat. 
Availability varies by county. Contact your agent or AgriSompo representative for details.

What insurance plans can MCO be added to?

• MCO is not a standalone policy; it enhances your underlying MPCI coverage. You can add it to:
• Yield Protection (YP).
• Revenue Protection (RP).
• Revenue Protection with Harvest Price Exclusion (RP-HPE).
• Actual Production History (APH).

When is the MCO sales closing date?

For most crops, the sales closing date is September 30. The SCD for rice varies by state and county.

What coverage levels can I choose with MCO?

MCO gives you the flexibility to match your risk tolerance. It created a customized band of protection spanning from either 95% or 90% of the area margin to 86% or 90%.

When does MCO pay?

MCO triggers when the county’s margin falls below your selected threshold. Payments are calculated based on:

• The difference between actual and trigger margin.
• The size of your coverage band.
• Your selected payment factor.

What costs are included in the MCO margin calculation?

MCO accounts for real input expenses, including diesel, natural gas and fertilizers. This ensures your protection reflects actual cost pressures, not just market prices.