Dry Weather Affecting Grass Yields…Again? Crop Insurance Could Help.

It’s late August in Maine and the U.S. Drought Monitor shows a yellow and light brown swath hugging the coast from northern to southern Maine. These colors represent the conditions of “abnormally dry” and “moderate drought”.  Just a year ago the Drought Monitor showed the same colors but concentrated in the central to southern portions of the state with greater severity in parts of southern and western Maine.

In times of dry weather perennial forages take a hard hit.  Given there are few practical options to mitigate the effects of drought on perennial forage many might find themselves spending more money on purchased feed or culling animals. Needless to say dealing with the consequences will likely be expensive.

Crop insurance and the Non-insured Crop Disaster Assistance Program (NAP) are two options for reducing the financial impact of drought. These programs transfer some of the risk involved with farming away from the farmer. Program options exist for coverage on grass in its different forms such as forage, pasture, and hay. The deadline to enroll in these programs for 2018 is approaching. Each program has different features, but they all protect against weather-related types of loss such as drought. The program options are listed below.

  1. Pasture, Rangeland, Forage (PRF) Pilot Crop Insurance. This insurance is a new option for Maine producers, providing protection of pasture, hay, and hayland against a single peril, drought. Unlike other types of crop insurance, this program is not based on a farmer’s historical crop yields. Rather, the PRF program uses a rainfall index from the National Oceanic and Atmospheric Administration (NOAA) Climate Prediction Center as a proxy for the farmers’ production data. The PRF program is an area-based policy, meaning losses occur when the reported rainfall for a 2-month interval over the entire area (12 square mile grid) is below the 50-year historical rainfall data. There is no claim paperwork to file and if an indemnity is owed, payments are mailed automatically. November 15, 2017 is the final date to purchase this crop insurance for the 2018 insurance year.
  2. Forage Production Crop Insurance. This insurance protects against a decline in your Average Production History (APH) or yield due to adverse weather conditions including drought, hail, frost, freeze, wind, excess precipitation; wildlife damage; insect damage and plant disease, except for insufficient or improper application of control measures. To be eligible for this insurance the stand must be pure alfalfa or a mixture of alfalfa and perennial grass. Crop insurance premiums are subsidized based on the coverage level selected. Coverage levels range from 50 to 75% of your APH at 100% of the price election. The price election for the 2018 crop year is $171 per ton. Forage Production Crop Insurance is available in Aroostook and Penobscot counties and is available outside of these counties through a written agreement. September 30, 2017 is the final date to purchase Forage Production Crop Insurance. Not growing alfalfa? Maybe this option isn’t for you. Instead consider option #3.

Crop insurance is sold and delivered solely through private crop insurance agents. A list of crop insurance agents is available online at the RMA Agent Locator (http://www.rma.usda.gov/tools/agent.html). For more information on these programs visit our website at https://extension.umaine.edu/agriculture/crop-insurance/.

  1. Non-insured Crop Disaster Assistance Program (NAP) for Perennial Forage and Fall-Seeded Grains. This is a program that protects your APH from natural disasters that results in lower yields or reduced forage quality. Coverage level options include the catastrophic level and up to 50-65% of your APH at 100% of the average market price. The minimum cost for NAP is a $250 per crop service fee for catastrophic level coverage; and the maximum premium for buy-up coverage is $6,563. This program is administered and sold by the USDA Farm Service Agency. The FSA will waive NAP service fees and reduce buy-up premiums by 50% for beginning farmers (one who has not operated a farm or ranch for more than 10 years), limited resource farmers, or historically underserved farmers.

September 30, 2017 is the final date to purchase the NAP program for perennial forage and fall-seeded grains. Contact your local FSA office (http://www.fsa.usda.gov/state-offices/Maine/index) to learn more.

 

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