Forage will be in short supply this year and likely throughout 2027. For farmers and ranchers planning to fill the feed gap by planting annual forages from August 1, 2026, through July 31, 2027, the USDA Risk Management Agency’s (RMA) Annual Forage insurance program provides the option of taking coverage for a lack of precipitation.
The July 15 enrollment deadline is fast approaching for producers considering this program. Now is the time to re-enroll or visit with a crop insurance agent to understand the insurance and learn how the product works.
How Annual Forage Insurance Works
- Coverage Levels: Producers can select coverage between 70% and 90% of expected precipitation.
- Intervals: Coverage is based on two-month intervals that producers choose based on important growth stages of the forage crop.
- Premium Subsidies: Annual forage insurance is subsidized, helping reduce the cost of premiums and making it more affordable as a risk management tool.
- Indemnity Payments: When precipitation during the insured interval is below the coverage level the producer selects, an indemnity payment is made, providing income to help offset the loss from reduced forage production.
The Annual Forage Insurance program utilizes a rainfall index to determine precipitation for coverage purposes. Precipitation data is sourced from the National Oceanic and Atmospheric Administration's Climate Prediction Center, which uses a grid system to estimate precipitation amounts within a given area. Each grid is 0.25 degrees in latitude by 0.25 degrees in longitude, or about 13 miles east to west by 17 miles north to south, for Nebraska.
Crop ground that could be planted to annual forages are assigned to one or more grids based on the location of the acres to be insured. When the final rainfall index falls below the insured “trigger grid index,” an indemnity is paid. Coverage is based on the calculated precipitation for the entire grid, not on individuals farm or ranch location. Annual forage production is highly dependent upon precipitation. By purchasing precipitation insurance, some of that risk can be offset.
Soil moisture at the time of planting annual forages, as well as precipitation during the winter and growing season, is one of the primary drivers of expected forage yield. Rainfall during germination and early growth is crucial for annual forages that require shallow planting because of small seed size. Adequate precipitation during the periods when these annual forages are growing rapidly is also critical. Producers using the plan should select coverage levels in two-month intervals based on how available soil moisture and the timing of precipitation would affect forage production for the crop being grown. Maximizing insurance coverage in the two-month intervals when precipitation would have the greatest impact on annual forage production would be logical.
Jay Parsons with the Center for Ag Profitability at the University of Nebraska-Lincoln will present “A Producer's Guide to Annual Forage Insurance: Coverage, Sign-Up Decisions, and Performance” on June 18 at Noon CT. To register, visit https://go.unl.edu/n09b
