Crop insurance coverage options

By Jessica Sarbacker, Lake Ridge Bank

You have different policy options to consider when looking to cover your established crops.  Each of these options covers different things and has different advantages and disadvantages.

Multi-peril crop insurance
This is very similar to the multi-peril crop insurance (MPCI) on your corn or soybeans.  The Actual Production History (APH) policy is based on your own yield history.  To establish a yield history, you need to provide your agent with four years of acres and tonnage data.  Once the APH is established, you can choose insurance coverage from 50% to 85% of your yield history.  For 2024, the Risk Management Agency (RMA) established value for alfalfa is $177 per ton.  The key to carrying APH forage coverage is that you must be able to keep good harvest records per cutting.  This coverage does provide protection for winterkill and other weather-related reasons your production falls below your guarantee.  The deadline to sign up for this policy is September 30.

Area yield protection crop insurance
The Area Yield Protection (AYP) crop insurance for forage is a county-based yield coverage, not based on your individual farm.  The advantage is that you do not need to provide individual yield data for this policy.  Losses are determined and paid based on the county average yield.  County yields are typically not released until spring of the following year, so there is a delay in receiving payment on this type of policy.  There is no winterkill coverage on an AYP policy; it simply compares the expected county forage yield versus the actual county yield.  It is fairly inexpensive coverage.  The deadline to sign up for this policy is September 30.

Pasture, rangeland and forage crop insurance
Pasture, rangeland and forage (PRF) crop insurance is one of the fastest growing crop insurance policies in the country.  PRF is a rainfall policy, meaning that the only peril you are insured for is lack of rainfall.  PRF is based on expected rainfall versus actual rainfall in the 17-by-17-mile grid that your forage fields are in.  You must select a minimum of two, two-month intervals to protect and you should select intervals where moisture is important to your operation.  You choose a trigger of 70% to 90% of normal precipitation in your intervals.  An indemnity is paid when your interval insured falls below the trigger value.  PRF is different than most crop insurance policies because you do not need to insure all your acres for PRF.  You choose which fields you want the coverage on, giving you control of how much premium you want to spend.  You can take PRF coverage on both hay ground and grazing ground.  The deadline to sign up for 2024 PRF coverage is December 1.

Fall is a busy time with harvest, but don’t forget to schedule some time to discuss your forage insurance options with your crop insurance agent.  All of these policies must be purchased in 2023 to protect your 2024 forage crop.

Chopping corn silage? Do you have a claim?
Most producers insure their corn crop with a revenue protection policy as grain.  Any time you are harvesting a crop for a different purpose than what it is insured for, you must have an appraisal done in the field.  If you insure it for grain, but chop silage, get an appraisal.  If you insure your corn as silage, but decide to take it for grain, get an appraisal.  Even if you believe your yield is above your guarantee, get an appraisal if you are chopping.  So far in 2023, we have seen a drop in corn prices, you may have a revenue loss once the harvest price is announced in October.

Between the drought and the price decrease, Wisconsin may see more claims than we have experienced in recent history.  Be sure to communicate with your crop insurance agent and your adjuster, and be diligent in keeping your harvest records.  Open communication and good recordkeeping are keys to making the claims process go smoothly.

If you do not currently carry crop insurance on your corn crop, the deadline to sign up to insure your corn crop for the 2024 growing season is March 15, 2024.