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The Dual Use Option: Annual Forage Rainfall Insurance and Traditional Multi-Peril Crop Insurance Can Both Be Used For Grazed Wheat Later Harvested For Grain

With the 2019 Kansas wheat harvest still in its final stages, few producers have given much thought to planning their 2020 wheat crop. However, an insurance deadline is approaching which could affect producers who plan to graze their 2020 wheat crop for part of the growing season but still harvest it later for grain.

In May, USDA’s Risk Management Agency announced that producers of small grains in a limited number of states (including Kansas) will be able to insure their small grain crops using Annual Forage coverage , a rainfall index product , for the grazing season and also use traditional multiple peril crop insurance like Revenue Protection or Yield Protection to insure their grain production. In prior years, producers could use the forage insurance or the traditional RP/YP policy for grain production, but not both.

This “dual use” (both grazing and grain) option is available for the 2020 crop in Kansas, Nebraska, Oklahoma, Colorado, Texas, and New Mexico, areas where grazing winter wheat has long been practiced, and where RMA considers this to be a good farming practice.

Annual Forage insurance is a rainfall insurance product that uses a grid-based (area) system, where producers can insure against rainfall totals coming in low for specific two -month periods of time. Producers can pick coverage levels that range from 70% to 90% of their historic rainfall normal values, and if actual rainfall comes in lower, a loss payment is triggered.

Annual Forage coverage uses the same grid areas and rainfall reporting system as used by Pasture, Rangeland, and Forage (PRF) coverage used to protect perennial grazing and forage systems. Rainfall measurements for this coverage come from official government reporting stations and feed into the NOAA Climate Prediction Center system. A composite rainfall total for the grid area is developed from reported rainfall from at least four of the closest reporting stations to one’s own grid. RMA has an Annual Forage webpage with several documents with more background information on this form of coverage.

The looming insurance deadline is the sign-up deadline for Annual Forage coverage . The sales closing date is July 15. The Annual Forage policy has four growing seasons over the one-year span of the policy, with separate seasons depending on the date of planting. The dual-use option on grazed wheat is only available for the period AF coverage designates as “Growing Season 1.” This growing season covers annual forage planted on or after July 16 and on or before October 15. The rainfall intervals covered under the policy go from September 1 to March 31 of the same crop year.

RMA has additional documents with more details. First is a fact sheet describing the Dual Use Option for Annual Forage authorized in the 2018 Farm Bill. Also available is a FAQ list that addresses many more issues related to the Dual Use Option.

Interested producers should check with their crop insurance agents for more details and cost estimates for this coverage.

Source: Art Barnaby, Kansas State University

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