Did you know that Annual Forage Insurance is solely based upon the precipitation (rainfall) index? Annual Forage Insurance protects against poor yielding crops due to lack of precipitation (this includes annual crops used for grazing, grazing / grain, grazing / green chop, grazing / haying, haying, haying / green chop, silage). This type of insurance is similar to Pasture, Rangeland, and Forage (PRF) that also uses the precipitation (rainfall) index.
Depending on your operation, Annual Forage insurance might be necessary to disperse your risk. The RMA has updated the Annual Forage program from 4 growing seasons per year to now 12 growing seasons.
Producers can strategically choose their growing seasons with the help of their crop insurance agent. Ag Service Associates agents take the complexity out of Annual Forage insurance. It’s as simple as this example:
- You elect a 90% level with a 150% productivity factor. The county base value is $237.68/ac x 150% = $356.52/ac adjusted value x 90% level = $320.87 /acre of coverage. One of your intervals is the Sept-Oct interval with an average rainfall of 2.648 inches of precipitation. 2.648 x 90% = 2.38 inches of precipitation. This means that if the precipitation during the Sept-Oct interval is less than 2.38, an indemnity could be triggered. For example, if the actual precipitation is 1.5 inches, that would be 57% of average, resulting in a payment of $117.76 per covered acre (.57 / .90 = .6333, 1.00 – .6333 = .637 payment factor)
If you are considering Annual Forage insurance, remember you are not required to insure all of your acres. You have the flexibility to pick and choose which fields to insure or not insure. Coverage levels can range from 70-90% and productivity factors can range from 60-150% of the county base value.
This program is available for producers in the following states: Colorado, Kansas, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota and Texas. The deadline to sign-up for Annual Forage Insurance is July 15, 2024.
Ag Service Associates agents take the time to ensure each client’s Annual Forage insurance is customized to their operation’s needs. With the ability to customize coverage and no upfront premiums, Annual Forage insurance is a great tool to utilize.