NAP hay coverage in a drought year

Farm Forum

NAP provides basic catastrophic insurance protection for crop types which are not insurable through standard Federal Crop Insurance (FCIC). Alfalfa and mixed forage that have 1 alfalfa plant per 5 square feet is insurable thru FCIC and will not be covered by a NAP policy. You may have a NAP policy on your native and tame hayland and have it covered under the PRF program provided by FCIC. The deadline to apply for NAP for 2013 is March 15, 2013.

NAP is a catstrophic loss policy. It covers 50% of the expected production at 55% of the NAP price. The NAP price for grass forage was $72.33 for 2012. There is also an 86% factor for unharvested acreages. Forage policies are similar to an FCIC policy in that you will “prove your yield” to establish an approved production history (APH).

Loss example using 2012 NAP price with no proven yield: You purchase a NAP policy on your grass forage for 2013. You provide no production history for the past years. Your APH would be 65% of the Marshall County T yield of 1.51 ton/acre. or .9815. In this example you don’t harvest any of your hayland due to drought. 50%(you have to stand the first 50% of the loss) of your APH of .9815 ton/acre equals .49075 ton. Multilplied by $38.78($72.33 (2012 NAP price times 55%) = $19.52/acre x 86% unharvested factor equals $17/acre. If you had harvested .5 ton/acre you would not be eligible for any payment since the .5 exceeds the .49075 ton/acre loss level since no productin evidence had been provided to prove your yield. Remember that a loss adjustor will appraise your field if you choose to not harvest it and assign a yield. It would be rare for any field to have a zero production assigned.

Loss example using 2012 NAP price with a proven yield: You provided 4 years production history and your APH is 1.5 ton/acre. Again, you don’t harvest any hay due to drought. 1.5 APH ton/acre x 50% = .75. .75 minus zero production x $39.78 x 86% unharvested factor = $26.00/acre. If you did harvest and got .5 ton/acre you would take your 1.5 APH times 50% equals .75 minus the .5 harvested = a .25% loss. this loss (.25%) X $39.78 = $10/acre.

The service fee for NAP is $250 per crop (grass for forage, native and tame varieties, are one crop and calculated together) per county. Grass, all types, intended for grazing is a separate crop, as is millet for forage or oats forage, with separate $250 fees. The maximum a producer would pay is $750 per administrative county not to exceed a total of $1875 for producers with multiple counties. All land that is administered (reported) in the county is covered by one fee for the crop type selected. Example: if your Marshall County farm has Day or another adjoining county land included in it, it is one service fee by crop.

Contact your local FSA office by March 15 if you are interested in applying for a NAP policy or earlier if you have questions. There are no provisions for a late filed application for this program.