Crop Insurance – an Important Tool for Farmers During Challenging Times

Crop Insurance. It’s a phrase that makes most people wish they were watching paint dry when it
is discussed. However, at Alegria Advisors, we think it’s an increasingly important part of our
Valley’s financial stability, in what is proving to be a very tumultuous time. As an Advisory
Firm that provides CPA and Financial Advisory Services in addition to Crop Insurance, we
specialize in turning “boring” issues into powerful tools for our clients’ growth and stability.
You can’t think of Central Washington without thinking of farming, and for good reason: the
region’s main economic driver is irrigated agriculture, along with downstream food processing,
storage, transportation, and export industries. However, as the 2026 Crop Year progresses this
spring, and despite agriculture being the backbone of our home’s financial system, Yakima
Valley farmers are contending with a host of challenges that threaten the region’s agricultural
stability. Rising input and labor costs in our state, volatile foreign market access, and persistent
weakness in commodity pricing are eroding profit margins, forcing producers to do more with
less. In addition, as retail giants consolidate at the grocery level, an imbalanced supply chain
results in farmers receiving less for their products, even as consumers pay higher retail prices.
Mother Nature has not been as kind lately, either – prolonged drought conditions have resulted in
reduced water allocations for junior water rights holders this year, placing additional strain on
growers and raising concerns about overall production levels. The economic outlook for our
Valley’s farmers is increasingly uncertain.

The saying “If it were easy, everyone would do it,” certainly applies to our farmers as they
weather these storms. What is a grower to do in this environment? As a tool to navigate this
environment of uncertainty, many growers are increasingly turning to crop insurance to mitigate
their ever-increasing and uncontrollable risks. Administered by the USDA’s Risk Management
Agency and backed by federal subsidies, these policies offer a critical financial safety net to our
farmers. Crop insurance can help secure farmers’ and ranchers’ incomes during years when
adverse weather or market and labor fluctuations threaten their bottom line.
Among the most widely available crop insurance products in Central Washington are those
providing both yield and/or revenue protection. The Actual Production History (APH) policy, for
example, leverages a grower’s historical data to establish a baseline yield; indemnities are paid
when production dips below this benchmark due to unpredictable weather. Whole Farm Revenue
Protection (WFRP), which utilizes a farmer’s tax return Schedule F for underwriting, can place a
floor on a grower’s revenues for a crop year, based on a percentage of historical average
revenues, and can compensate when production and revenue losses are triggered by weather or
market disruptions.

A recent addition to risk management options for apple, grape, and blueberry producers is the
Enhanced Coverage Option (ECO) for crop insurance. This area-based endorsement provides an
added layer of protection against yield losses at the county level, supplementing traditional yield
policies by covering shallower yield losses, with up to 95% of a County’s average yield in a crop
year (per USDA calculations) protected. For example, USDA-RMA recently released its 2025
apple crop results for ECO, and growers who chose to add that product will be paid an indemnity
for the 2025 Crop Year. With an increased 80% federal premium subsidy for 2026 and
prospective Crop Years, ECO represents an opportunity for growers seeking to further insulate
their operations from volatility.

Alegria Advisors exemplifies commitment to the region’s agricultural community through its
consultative approach to crop insurance – matching growers’ operations to the crop insurance
policies available to them in the most beneficial manner is an important part of how we help our
clients understand their changing business environment and navigate choppy waters. We are
building a stronger team to help us serve our clients in this way, too—the recent addition of
Alicia Palmer, who brings over a decade of expertise as a crop insurance underwriter and policy
specialist, further strengthens our Firm’s ability to partner with our growers and deliver tailored
risk management strategies.

Looking ahead, the long-term resilience of Yakima Valley agriculture will require reliable trade
agreements, substantial investments in irrigation infrastructure, and stronger support for growers
in labor, market, and supply chain policy discussions. Fixing these dramatic imbalances is
paramount to returning a positive equilibrium to our Valley’s economy. In the near term, crop
insurance remains an essential tool for producers seeking to weather these outside pressures and
sustain their operations. Leveraging our expertise in accounting, finance, insurance, and farming,
Alegria Advisors will continue to bring a holistic, integrated approach to understanding each of
our clients and teaming with them to build their futures.