Early Signals for Supplemental Crop Insurance Adoption Under Partial OBBBA Implementation

By Francis Tsiboe and Hongxi Zhao

Crop insurance continues to evolve as policy parameters change and producers adjust their risk management choices. The One Big Beautiful Bill Act (OBBBA) altered the subsidy and coverage environment for supplemental insurance beginning with the 2026 crop year. For the 2026 crop year, the premium subsidy for both the Enhanced Coverage Option (ECO) and the Supplemental Coverage Option (SCO) increased to 80 percent, making higher layers of area-based coverage less expensive for producers than under the prior 65 percent subsidy structure. RMA also noted that although SCO remains capped at 86 percent in 2026, producers can effectively cover the 86 to 90 percent band with ECO in 2026, before the SCO cap formally increases to 90 percent in 2027. These changes are effective for policies with sales closing dates on or after July 1, 2025.

As acreage reporting for the 2026 crop year remains incomplete, reported totals currently understate the eventual insured acreage for both base and supplemental products. That said, the number of policies sold is already nearly fully observed for commodities in counties with sales closing date on or before April 15, 2026, and can provide preliminary evidence into changes in producers’ choices. This brief uses those observed policy counts together with historical relationships between policy counts and insured acreage to produce an early forecast of 2026 supplemental insurance adoption.

Before the recent subsidy expansions, supplemental insurance adoption remained modest when measured relative to eligible acreage. Among the commodities and counties considered in this brief, ECO adoption rate rose from 3.8 percent of eligible acreage in 2022 to 5 percent in 2023 and 5.7 percent in 2024, before jumping to 19.3 percent in 2025 after the administrative subsidy increased to 65 percent. SCO, which has not yet undergone a cap increase, exhibits much flatter changes in adoption. The rate moved from 2.8 percent in 2022 to 3 percent in 2023, falling to 2.4 percent in 2024, and returning to 3 percent in 2025. The 2025 ECO experience is particularly informative because it suggests that adoption can expand rapidly when supplemental coverage becomes cheaper.

For the 2026 commodity year, base policy counts remained essentially unchanged at about 1.99 million policies in both 2025 and 2026. Over the same period, ECO policy sales increased from 231.29 thousand to 531.4 thousand, while SCO policy sales rose from 63.33 thousand to 313.23 thousand. These provide the first clear indication that producers responded strongly to the new OBBBA subsidy environment.

To translate policy counts into projected acreage, we first estimate the amount of acreage likely to be insured under qualifying base policies. Between 2022 and 2025, the number of insured acres per base policy was highly stable, averaging 142.16 acres per policy. Applying that historical relationship to the 1.99 million observed base policies sold in 2026 yields an estimated 282.91 million insured base acres. This projected base acreage serves as the eligible acreage denominator for the supplemental adoption calculations. We then apply the same approach to ECO and SCO. For ECO, the acreage-per-policy ratio in 2025 was 274.64 acres per policy. Applying that ratio to the 531.4 thousand ECO policies sold in 2026 yields a projected 145.94 million insured ECO acres. For SCO, the 2025 acreage-per-policy ratio was 210.15 acres per policy. Applying that relationship to the 313.23 thousand SCO policies sold in 2026 yields a projected 65.83 million insured SCO acres.

Combining these projected supplemental acres with the projected eligible base acreage implies that ECO adoption could reach 51.6 percent of eligible acres in 2026, while SCO adoption could reach 23.3 percent. As shown in Figure 1, relative to 2025, this would represent an increase of 32.4 percentage points for ECO and 20.2 percentage points for SCO. Put differently, the projected 2026 ECO adoption rate is about 2.6 times the 2025 rate, while the projected 2026 SCO adoption rate is about 7.8 times the 2025 rate.

Figure 1: National Adoption Rates for the Enhanced Coverage Option (ECO) and Supplemental Coverage Option (SCO), 2022–2026P

Note: The 2026 values are projected from observed policy sales and historical acres-per-policy relationships.Includes commodities in counties with sales closing date on or before April 15, 2026.

Source: NDSU Agricultural Risk Policy Center (ARPC), USDA, Risk Management Agency as of May 07, 2026.

The spatial pattern of predicted adoption changes for 2025-2026 in Figure 2 suggests that SCO and ECO will continue to grow unevenly across states, with ECO showing the clearest concentration of growth in the Midwest. For SCO, the largest predicted increase occurs in Alabama, while moderate to large gains are expected in Alabama, Arizona, Colorado, Idaho, Illinois, Indiana, Iowa, Kansas, Minnesota, Montana, Nebraska, Nevada, New Mexico, South Dakota, Texas, and Washington. These increases are consistent with broader growth across several major agricultural states, including parts of the Corn Belt, Plains, and South. In contrast, predicted declines are observed in Florida, New Jersey, South Carolina, Vermont, and West Virginia, with the largest decline occurring in Vermont. States such as Massachusetts, New York, North Carolina, and Utah are projected to experience little or no substantial change in SCO adoption.

Figure 2: Projected Change in Supplemental Coverage Option (SCO) and Enhanced Coverage Option (ECO) Adoption by State, 2025–2026P

Note: The 2026 values are projected from observed policy sales and historical acres-per-policy relationships.Includes commodities in counties with sales closing date on or before April 15, 2026.

Source: NDSU Agricultural Risk Policy Center (ARPC), USDA, Risk Management Agency as of May 07, 2026.

For ECO, the strongest predicted increases are more clearly concentrated in major row-crop states. Adoption is projected to increase by more than 50 percentage points in Illinois, Indiana, Iowa, Kentucky, Minnesota, Nebraska, New Jersey, Ohio, Pennsylvania, and Tennessee, with the largest predicted gain occurring in Illinois. Additional meaningful increases are expected in Alabama, Colorado, Delaware, Idaho, Kansas, Louisiana, Maryland, Michigan, Mississippi, Missouri, Montana, New York, North Dakota, Oklahoma, Oregon, South Dakota, Virginia, Washington, West Virginia, Wisconsin, and Wyoming. Several states show little or no substantial change, including Arizona, California, Georgia, Nevada, New Mexico, North Carolina, Utah, and Vermont, whereas Florida, Massachusetts, and South Carolina are predicted to experience declines. The largest predicted ECO decline occurs in Massachusetts.

SCO adoption appears to be expanding more slowly and less consistently than ECO, suggesting that producers in high-insurance-participation regions may find ECO more attractive as a supplemental coverage option. States with limited growth or predicted declines may reflect smaller eligible acreage bases, different crop mixes, or less reliance on SCO/ECO-type coverage.

Predicted crop-level changes in Figure 3 indicate that SCO and ECO adoption growth will be concentrated among major commodity crops. Predicted adoption growth exceeds 25 percentage points for both SCO and ECO among Corn, Cotton, and Dry Peas. Soybeans also show strong predicted growth, particularly for ECO, with adoption expected to increase by 41.8 percentage points, compared with 19.1 percentage points for SCO. Wheat is similarly predicted to experience substantial adoption growth, with expected increases of 25.1 percentage points for ECO and 17.6 percentage points for SCO. These patterns are consistent with the state-level results, where the strongest predicted increases are concentrated in major row-crop regions, especially the Midwest and other areas with high participation in federal crop insurance.

Moderate increases are also predicted for several other crops, including Almonds, Apple, Barley, Blueberries, Canola, Sorghum, Soybeans, Walnuts, and Wheat. However, fruit and specialty crops generally show smaller and more mixed changes, suggesting that supplemental coverage expansion remains more limited outside major program crops. Several crops, including Forage, Mint, Oats, Onions, Peaches, Potatoes, Rye, Safflower, and Sugarcane, are predicted to experience decreases in adoption, while Oats, Potatoes, and Safflower show larger declines of more than 25 percentage points in at least one supplemental plan. These crop-level differences may reflect variation in baseline crop insurance participation, crop-specific risk profiles, and the relative value producers place on county-level supplemental protection. The stronger growth among major commodity crops suggests that SCO and ECO adoption is likely to remain most responsive where producers already rely heavily on federal crop insurance as a core risk-management tool.

Figure 3: Projected Change in Supplemental Coverage Option (SCO) and Enhanced Coverage Option (ECO) Adoption by Commodity

Note: The 2026 values are projected from observed policy sales and historical acres-per-policy relationships.Includes commodities in counties with sales closing date on or before April 15, 2026.

Source: NDSU Agricultural Risk Policy Center (ARPC), USDA, Risk Management Agency as of May 07, 2026.

These projections suggest that the 2026 crop year may mark the most substantial expansion to date in the role of supplemental insurance within FCIP. Under this early forecast, ECO would increase from covering less than one-fifth of eligible acreage in 2025 to more than half in 2026, while SCO would rise from its historically low adoption level of about two to three percent into the low double digits. These estimates should be interpreted as preliminary forecasts rather than final realized outcomes, since insured acreage may still change as planting and acreage reporting are completed and as producer behavior responds to lower effective premium costs under the OBBBA subsidy expansion. Even so, the stability of historical acres-per-policy relationships makes policy counts a useful early signal, and the magnitude of the 2026 sales response strongly indicates that supplemental insurance adoption is on track to increase sharply. If producers insure larger acreages per policy than in the past, these forecasts may understate the eventual 2026 acreage covered by ECO and SCO. ARPC is developing a more comprehensive report that will examine regional and commodity-specific adoption dynamics and projected participation patterns through 2027.