Annual Forage Insurance: A Safeguard Against Drought

The Rainfall Index – Annual Forage (RI-AF) Insurance program lets you buy insurance that covers against insufficient rainfall on annually planted forage or hay for livestock. It’s available in Texas, Oklahoma, New Mexico, Colorado, Kansas, Nebraska, South Dakota, and North Dakota.

How Does Annual Forage Insurance Work?

Annual Forage coverage protects you against drops in a precipitation-based index, using historical average rainfall for specific periods. It covers twelve growing seasons, defined by planting dates, allowing you to select two-month intervals crucial for your crops. To qualify for annual forage insurance, you must enroll by July 15, 2024.

Dual Use Option

Annual Forage coverage also provides a Dual Use Option, letting you insure for grazing in winter/early spring under Annual Forage, and then cover your grain crop with a separate multi-peril policy while keeping both benefits.

This option is offered in select counties of Texas, Oklahoma, Kansas, Nebraska, New Mexico, and Colorado, where grain/grazing is recognized as a good farming practice. It’s available for Growing Seasons one through four, covering primarily wheat, with some areas also including barley and oats.

Indemnity Payments
After the two-month interval ends, the USDA’s Risk Management Agency will release a Final Grid Index value representing how much precipitation was recorded for the Grid to compare against the coverage level you selected.

Each grid covers an area equal to .25° latitude x .25° longitude. NOAA creates the grids, which do not follow state, county, or national boundaries. Each grid is individually rated based on the data for that grid. (For example, in the middle of the country the area in a grid equates to about 150,000 acres or a 15×15 mile square. In North Dakota, the grid narrows to about 130,000 acres and in South Texas stretches up to about 196,000 acres.)

There is no loss adjustment. If there is a loss, the indemnity is automatically calculated and then paid.

What Is the Difference Between PRF and Annual Forage?

While similar in design to the Pasture Range and Forage (PRF) Insurance, which is based on the rainfall index data provided by the National Oceanic and Atmospheric Administration (NOAA) Climate Prediction Center, the difference between Annual Forage and PRF lies in the type of commodity covered.

The insured crop under Annual Forage is all annually planted acres grown for forage or fodder with the intended use including, but not limited to, the following:

• Grazing
• Haying
• Green chop
• Silage, which includes commodities such as, but not limited to, wheat, triticale, oats, Sudan hay grazer, etc.

In contrast, PRF encompasses:

• Perennial grasses
• Rangeland
• Hay types, such as alfalfa, that are not planted on an annual basis.

Annual Forage Insurance offers crucial protection against unpredictable rainfall, helping producers in states like Texas, Oklahoma, and Nebraska maintain their forage production and livestock management goals. The Dual Use Option enhances its flexibility.