How you can protect your hay crop

Gary Sliworsky
Ag. Rep.

AGRICORP’s Forage Rainfall Plan offers protection against drought in a simple and innovative format. The plan is based on the concept that rainfall influences production and, within reasonable limits, increased moisture levels during the growing season have a positive effect on forage production. Under the Forage Rainfall Plan, insured customers receive a claim payment if the measured rainfall during the period from May through August is less than 80 percent of the long-term average for their area.
One advantage is that you choose the closest rainfall collection site within your area that best represents the rainfall on your farm.
Rainfall for your chosen site is broken down by month. Each month has an average rainfall. Monthly rainfall is capped at 125 percent of the average. In other words, any rainfall that is more than 125 of the long-term monthly average is ignored. For instance, if in May it rains every day and you end up with twice the average rainfall for May, only 125 percent is actually recorded. The same applies for June, July and August. If July and August are quite dry you may be eligible for a claim payment even though May was much wetter than normal. The program measures the total per month rather than just the total for the four months.
If the calculated rainfall for the season is only 75 percent of the long-term average, the claim amount is 5 percent (80 percent minus 75 percent). Five percent multiplied by the policy value equals the claim amount.
In consultation with your AGRICORP District Coordinator, you determine the dollar value of your forage crop as well as your selected amount of coverage (the “policy value”). The coverage level cannot exceed the total dollar value of your crop and must be at least $2,000.
As mentioned above, if your rainfall is 75 percent of the long-term average, the claim amount is 5 percent. If your policy value is $10,000, 5 percent of $10,000 equals $500. The Forage Rainfall Plan doubles this amount to reflect transportation costs to purchase replacement hay lost as a result of reduced rainfall. Therefore the claim payment is $1,000. Claim payments are made in September.
There is a premium for the coverage.
The premium rate is 3.24 percent times the policy value ($10,000) equals $324 in our example. This represents 40 percent of the true premium as the government pays 60 percent of the premium (and 100% of the administration costs).
May 1 is the deadline for new applications, renewals, changes and premium payment.

To obtain more information call AGRICORP at 1-888-247-4999.

Dates to Remember

Apr. 22 – Spring Cattle Sale, Stratton Sales Yard
May 1 – Deadline for AGRICORP Forage Rainfall Plan