Frequently Asked Questions

Pasture, Rangeland, Forage

Sep 12, 2018

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 help 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. The expansion for the 2017 crop year covered over 650 million haying and grazing acres. All counties within those 48 states were offered RI-PRF. A few producers did not have coverage because the majority of their grid crossed 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 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.

2019 Changes to PRF

Q: When will these values take effect? Will 2018 CBVs be impacted?
A: Theses CBVs will take effect for the 2019 crop year. The CBVs for the rest of 2018 will not be impacted.

Q: Why did RMA change the values?
A: RMA changed the methodology in order to more accurately reflect the value of forage production per acre realizing that the previous use of hay prices resulted in overvaluation of actual production potential of grazing land.

Q: Will I have to pay more for my coverage?
A: No, to the extent the CBVs in your counties decreased, your premiums will decrease as well.

Q: Why did RMA do this in the middle of a drought?
A: The values will not change for 2018. The values go into effect for 2019. RMA understands the difficulties that ranchers are facing. However, to more accurately reflect values and ensure sustainability and integrity of the program, these changes were made. With the changes, PRF still offers valuable risk management.

Q: How can I increase coverage if I think the values are too low?
A: The option of using the productivity factor is still available, which allows ranchers to increase the CBV up to 50 percent more.

Contact Information

For more information, contact RMA Public Affairs.