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Crop insurance boom- forage leads the surge

Crop insurance boom- forage leads the surge

By Andi Anderson

The landscape of agricultural insurance in the United States is witnessing unprecedented changes, as highlighted in recent USDA data.

Over the past seven years, there has been an 85% increase in crop insurance enrollment, culminating in over 500 million acres insured in 2023—the highest ever recorded. This surge is primarily driven by the growing popularity of forage crop policies.

Dylan Turner and Francis Tsiboe of the USDA Economic Research Service noted significant shifts in the type of crops insured. "In 2016, field crops represented 78 percent of total insured acres, and forage crops represented 16 percent. By the 2021 crop year, field crop coverage declined to 52 percent of insured acres, while forage crops increased to 40 percent," they reported.

This trend underscores the evolving priorities within agricultural insurance, where forage crops have gained a larger share due to their unique growth patterns and multiple harvests within a year.

The Pasture, Rangeland, and Forage (PRF) insurance plan, introduced in 2007, has been instrumental in accommodating the peculiarities of insuring forage production, which traditional policies had previously struggled to address effectively.

Forage crops' contribution to insured liabilities was comparatively minor, about 3 percent of the total in 2021, yet the value insured under these plans has seen substantial growth, reaching $4.3 billion.

There has been a notable increase in farmer participation in livestock insurance programs. In 2023, the insured liability for Livestock Risk Protection, Livestock Gross Margin, and Dairy Revenue Protection plans exceeded $32 million, significantly higher than in previous years.

The broader implications of these trends are now part of the legislative discussions surrounding the Farm Bill.

Proposals are on the table to enhance crop insurance programs further, including increased premium subsidies and extended support for beginning and veteran farmers.

Senate Agriculture Chairwoman Debbie Stabenow has expressed intentions to make crop insurance more affordable and accessible, highlighting a continued commitment to strengthening this crucial support system for America’s farmers.

As the U.S. agricultural sector continues to evolve, the expansion and adaptation of crop insurance programs remain pivotal in supporting the nation’s farmers against the unpredictable challenges of farming.

Photo Credit: minnesota-corn-growers-association

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