USDA Boosts Forage Production Insurance with Revenue Protection

USDA's Risk Management Agency made significant changes to hay insurance for many states earlier this summer. Forage Production, which historically insured against yield losses on alfalfa and alfalfa mixes in dairy states, now includes revenue insurance in several states.

The affected product still covers the hay crop and not cattle. Beginning with coverage for 2027, Revenue Protection (RP) will be available for selected counties in 11 states: California, Idaho, Iowa, Michigan, Minnesota, Montana, Nebraska, North Dakota, Pennsylvania, South Dakota, Washington, and Wisconsin.

RP ties the projected and harvested price of hay to a combination of futures prices for corn, soybean meal, and Class III milk. This means that indemnity payments can increase if the underlying crop price increases before harvest.

For producers raising hay for on-farm use, having RP would generally mean a higher indemnity payment when there are yield losses. For those who routinely raise hay to sell to others, RP would protect revenue streams better than just having yield insurance.