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Frequently Asked Questions

Pasture, Rangeland, Forage

Aug 17, 2017

The Rainfall Index (RI) Pasture, Rangeland, Forage (PRF) insurance program is designed to provide coverage on your pasture, rangeland, or forage acres. The program is designed to give you the ability to cover replacement feed costs when a loss of forage for grazing or harvested for hay is experienced due to lack of precipitation.

Q: What is the Pasture, Rangeland, and Forage Insurance Policy?
A: The PRF policy is an area-based insurance plan that covers perennial pasture, rangeland, or forage used to feed livestock. It provides producers a risk management tool to cover the precipitation needed to produce forage for their operation.

Q: What does “area-based” mean?
A: Area-based means payments are not based on an individual rancher’s experience; rather, payments are based on a grid’s deviation from normal experience. For example, under the Rainfall Index, if your ranch received a surplus of rain, but the area in your grid was below average, you could receive a payment or vice versa.

Q: Will RI-PRF be available in my area?
A: RI-PRF is being offered in all 48 contiguous states. This expansion for the 2017 crop year covers over 650 million haying and grazing acres. All counties within those 48 states will offer RI-PRF. A few producers did not have coverage because the majority of their grid crosses over either the northern or southern United States borders.

Q: Who is NOAA CPC?
A: NOAA CPC is the National Oceanic and Atmospheric Administration Climate Prediction Center, which is the data set used in the PRF Program.

Q: How does the Rainfall Index work?
A: Producers must choose at least two, 2-month periods when precipitation is important for forage growth for their operation. These periods are called index intervals. RMA uses NOAA CPC data to calculate normal precipitation and deviations from normal precipitation. RMA uses NOAA precipitation data based on the Optimal Interpolation methodology. Interpolation is based on the idea that things closer together in space are generally more similar than those farther apart and it estimates precipitation for a grid using reporting stations within a search radius around the grid. More information about the technology and how NOAA CPC interpolates weather data to a specific grid can be found on RMA’s PRF web page. Select “Rainfall Index, Pasture, Rangeland, Forage Technology”. It is important to understand that precipitation is interpolated to the grid, not measured within the grid.

Q: How is precipitation measured under the Rainfall Index?
A: The Rainfall Index uses NOAA CPC Daily Precipitation Data that interpolates precipitation to the grid. RMA compares the compiled data for each 2-month interval with the historical precipitation data for the same period that is normally expected in the grid.

Q: What is a grid? Why is it important?
A: A grid is the physical area under which your operation is insured. You are paid based on the losses interpolated to the grid for the Rainfall Index, which is why it is important that you choose the right grid(s) in which your operation is located. If you have any questions about your grid(s) identification number, or for more information on how grids are measured please contact your crop insurance agent.

Q: Does it matter which index intervals I choose to insure?
A: Yes, which index intervals you insure and how much you insure for each interval is important. It is important to review the historical indices tools for your grid along with past production records to determine if these programs work for your operation and to assess which index intervals correlate well to your production. For example, a rancher has an operation in Virginia and has cool season grasses. July and August are normally extremely dry months when the vegetation normally becomes dormant (turns brown). Since July and August are normally dry, this may not be a good period to insure. This Virginia rancher may be better served by insuring months earlier in the spring that are important for cool season forage growth and months in the fall that would establish his cool season grasses for fall grazing.

RMA strongly encourages you to use our decision support tools to help you make the right decision for your insurance needs. Selecting index intervals is a critical component of these policies and the result of your selections will directly correspond to your satisfaction with the product.

Q: How are losses triggered?
A: When the interpolated precipitation falls below average for the index interval, it triggers a loss payment to all ranchers who have signed up for the program in the grid that are covered under this interval. Producers do not need to submit a loss claim or notify their agents. RMA calculates any loss and your insurance company processes any indemnity due. Losses are calculated based on whether the current year’s precipitation in a grid has deviated from normal compared to the historical normal precipitation in the same grid, for the same period. Losses are not based on a single ranch or a specific weather station in a general area.

Q: What pricing changes were made for 2016 and how will they impact me?
A: After receiving feedback from ranchers that prices for grazing were too low, RMA contracted for a study of the grazing and hay pricing methods. After completing the study, the grazing price has been updated to reflect the stocking rates, available forage, and value of the forage for the area. This method uses Animal Unit Month data for each state and county to determine the “yield” for the grazed acreage and then uses hay prices to determine the current pricing. The 2016 prices were generally increased based on this new method and better reflect the grazing value. The updated pricing methodology provides a meaningful risk management strategy for covering the cost of alternative feed when available forage for grazing is short or non-existent. Previously RMA did not distinguish between irrigated and non-irrigated hay. Prior to 2016, RMA only distinguished between grazing and hay. In some states, producers may notice a price for irrigated hay that is significantly lower than non-irrigated hay. The irrigated hay price reflects the additional cost of irrigation when precipitation is lacking. Normal irrigation expense is not covered. The RI-PRF program triggers when there is a lack of precipitation. Since irrigated producers would not have a loss of production due to lack of precipitation, RMA calculated the extra cost of irrigation (e.g. electric costs) when precipitation was below normal.

RMA also updated the pricing methodology for non-irrigated hay production. As noted above, in some states, RMA offers both irrigated and non-irrigated hay with separate pricing. RMA updated the non-irrigated hay to reflect hay production (yield) and price for non-irrigated hay only. In the past, RMA used the National Agricultural Statistics Service (NASS) All Hay price and yield, which included irrigated hay production and non-irrigated hay production and price within a state. In 2016, RMA used the NASS hay yield and price that excluded irrigated hay and alfalfa. This meant that the higher yield that was associated with the irrigated hay production and contributed to the All Hay price previously used was no longer included. This reduced the overall yield in those states where both irrigated and non-irrigated hay production was common.

Q: What are these support tools?
A: These tools are the Grid ID Locator, decision support tool, and historical indices tool and are available on RMA’s website for producers to use to view past results with their production records. This comparison assists in index interval selection and determining how well these products correlate to your historical productions records.

Q: Where do I find out more information on the technology, shares, or how to use the tools?
A: RMA’s Pasture, Rangeland, Forage provides several PowerPoints that provide information on the program including a general overview, the technology used for the Rainfall Index, and step-by-step directions on how to use the tools. There is also a PowerPoint outlining who has a “share” in the forage. For grazing, RMA recognizes the livestock producer as having the insurable interest or “share” in the crop. The livestock producer suffers the loss – replacement feed. For haying, RMA recognizes the financial interest in the hay crop similar to other crops. The RI-PRF program does not measure actual production and was designed for livestock producers who do not keep detailed hay records. For commercial grass growers, who maintain detailed forage records and are not interested in RI-PRF, RMA offers an Actual Production History Forage Production policy that may be better suited for them.

Q: How do I find a crop insurance agent?
A: A list of insurance agents is available at all USDA service centers or RMA's Agent Locator.

Q: Do I need to purchase insurance coverage to participate in USDA programs even though I am a rancher and do not wish to do so?
A: No, currently participation in the Federal crop insurance program is not a requirement of any current USDA program.

Q: Are there other livestock plans available if PRF isn’t right for me?
A: Yes, RMA offers seven livestock plans and an annual forage insurance plan. Talk to a crop insurance agent to help you decide the option that is right for your operation.

Q: Is this drought insurance?
A: No. The RI-PRF is not “drought insurance” and does not insure against abnormally “high temperatures” or “windy conditions.” While a drought may cause a decline in the index value to the point that an indemnity payment is issued to eligible insured producers, a drought being declared in a state, county or area does not, by itself, trigger an indemnity payment under the RI-PRF.

Q: Why doesn’t RMA use the drought monitor instead of NOAA data?
A: RMA does not utilize the drought monitor because the drought monitor utilizes multiple measurements to determine if an area is in a drought and the severity of the drought an area is experiencing. The PRF program is a single peril program, the lack of precipitation is the only insurable cause of loss covered under this program.

Contact Information

For more information, contact RMA Public Affairs.