USDA Unveils Revenue Insurance for Hay Producers

The USDA's Risk Management Agency has made significant changes to Forage Production insurance for many states. This change adds revenue insurance to hay in several states, including California, Idaho, Iowa, Michigan, Minnesota, Montana, Nebraska, North Dakota, Pennsylvania, South Dakota, Washington, and Wisconsin.

Historically, Forage Production insurance only covered yield losses on alfalfa and alfalfa mixes in dairy states. However, with this change, beef producers can also use the product as it covers the hay crop and not cattle.

The USDA estimated 50 million acres of hay to be harvested nationwide in 2026, with alfalfa accounting for 15 million acres and other hay making up 35 million acres. Currently, only 1.4 million acres are insured under Forage Production, with the majority being in South Dakota, Montana, Wisconsin, and North Dakota.

The revenue feature of Forage Production insurance ties the projected and harvested price for hay to a combination of futures prices for corn, soybean meal, and Class III milk. This is based on historical correlations between hay prices and these commodity prices, with hay prices showing the highest correlation with soybean meal futures.