I think they can easily hedge prices (via futures), but hedging production is much harder (because your weather & production might be different from others around, and with insurance the incentives can get bad; see moral hazard).
I worked for a company that tried to insure farmers so they'd be profitable even in bad years, but the reduction in profit on good years (i.e. cost of insurance) was too much to sell well.
I worked for a company that tried to insure farmers so they'd be profitable even in bad years, but the reduction in profit on good years (i.e. cost of insurance) was too much to sell well.