By Scout Nelson
Drought continues to create challenges for livestock and forage producers in South Dakota. Annual Forage Rainfall Index (AF) insurance provides producers with a risk management option that may help reduce financial losses caused by below-average rainfall.
Kim Ricardo, SDSU Extension Forage Field Specialist, and Matthew Diersen, agricultural economist, highlighted that understanding how Annual Forage Insurance works can help producers make informed decisions before selecting coverage. Producers interested in coverage for the 2027 crop year must complete enrollment before the July 15, 2026, sales closing date.
Annual Forage Rainfall Index insurance is a crop insurance program managed by the USDA Risk Management Agency. Unlike traditional crop insurance that often covers direct crop damage, Annual Forage Insurance uses rainfall data to estimate potential losses from limited precipitation.
The program is designed for producers who rely on annual forage crops for livestock operations. These crops may be used for grazing, hay production, silage, or green chopping. The insurance can help provide financial support when rainfall levels in an insured area fall below expected amounts.
Producers can customize their coverage by selecting insured acres, forage use, coverage level, productivity level, and important rainfall periods. Choosing the right rainfall intervals is an important decision because different forage crops require moisture at different stages of growth.
Payments are based on rainfall measurements within geographic areas called grids rather than conditions at individual farms. This means producers may experience forage losses without receiving payments, or they may receive payments even when forage production remains acceptable.
In South Dakota, participation in Annual Forage Insurance changes each year as producers evaluate their risk management needs. Other programs, including Forage Production Insurance and Pasture Rangeland and Forage (PRF) insurance, also provide coverage options for different types of forage operations.
Producers should remember that forage production depends on several factors, including rainfall, soil conditions, fertility, planting dates, temperature, and weed pressure. AF insurance is not a guarantee of production but can provide financial assistance during widespread drought conditions.
Annual Forage Rainfall Index insurance can be used along with other management practices, such as proper grazing, forage diversity, and drought planning. Producers interested in 2027 coverage should contact a crop insurance agent before the deadline to review available options.
For more information on Annual Forage Rainfall Index insurance, visit the USDA Risk Management Agency website.
Photo Credit: gettyimages-r-j-seymour
Categories: South Dakota, Crops, Hay & Forage, Government & Policy, Livestock, Weather