Pasture, Rangeland & Forage (PRF-RI) covers pasture, rangeland, or forage for perennial haying and/or grazing purposes to help provide protection from increased feed costs due to forage losses from the lack of precipitation. PRF is available in all counties in the 48 contiguous states.
 
Rainfall Index (RI)-coverage is for a single peril, which is lack of precipitation. The RI uses National Oceanic and Atmospheric Administration Climate Prediction Center (NOAA CPC) data to determine whether a loss is triggered. This utilizes a grid system to determine precipitation amounts within an area. A “grid” is the physical area under which the grower’s operation is located and insured.  A Grid based on .25-dgrees of latitude and longitude (roughly a 13 x 17-mile rectangle) Grids do not follow state, county or geopolitical boundaries.
 
Coverage is based on the happening of the entire grid. It is not based on individual farms or ranches or specific weather stations in the general area. NOAA obtains data from the four reporting stations closest to the center of the grid that report data for that day.  The closest reporting station may be located outside the grid for which the data will be used.
 
Eligible policyholders include owners, operators, landlords, and tenants with an insurable interest in the livestock for grazing or the perennial forage haying production. Land enrolled in the Conservation Reserve Program (CRP) is not eligible.  Policyholders are allowed to insure some but do not have to insure all of their grazing or hayland.
 
Coverage levels range from 70 – 90% in 5% increments. USDA-RMA does provide different premium subsidies at different coverage level increments.

Productivity factors range from 60 – 150% in 1% increments.  This allows the insured to individualize their coverage based on the productivity of the acreage insured

PRF Rainfall Index

Rainfall PRF plans cover a decline in rainfall indices. To qualify, select at least two rainfall intervals up to six rainfall intervals per year. The intervals cannot overlap. With a minimum of 10% and a maximum of 60% of the value of acres can be allocated to an index interval. 

 
 
USDA RMA issues a final grid index for insured grids at the end of the index interval period. The final grid index is based on deviation from normal of rainfall during the index interval for the selected grid, and is expressed as a percentage. An index of 100 represents normal precipitation, an index below 100 represents below normal precipitation, and an index above 100 represents above normal precipitation.
 
Calculating an Indemnity
 
In this Rainfall PRF example, assume the final grid index is 60, the county base value (CBV) is $11.90, the coverage level is 90%, the protection factor is 150%, and the trigger grid is 90. The insured has a 100% share.
CBV × coverage level × protection factor = protection $11.90 × 90% × 150% = $16.06 per acre
(Trigger grid - final grid) ÷ trigger grid = factor (90 - 60) ÷ 90 = .333
Factor × protection × share = indemnity .333 × $16.06 per acre × 100% = 5.35 per acre
 
Additional Resources
 
PRF Tool from USDA - RMA (Risk Management Agency)
 
Summary Overview of Rainfall Index Insurance plan for Pasture, Rangeland, and Forage
 
USDA RMA RPF Archives
 
PRF Brochure from USDA
 
PRF FAQ from USDA
 
NOAA Natioanl Weather Service Climate Prediction Center
 
Please contact one of our offices if you would like to learn more about the PRF Program or if you have any questions.
Lamar - (719) 336-8292
Springfield - (719) 523-1892
Walsh - (719) 324-5212