Pasture, Range, Forage Insurance (PRF)
Nov 11, 2020
Jim Ward, Director of Risk Management
This is an option for insuring your brome, alfalfa, prairie grass, or other forage type hay. It is highly subsidized, cost-effective, and has a history of frequent payouts. It utilizes NOAA Climate Prediction Center data-tracked rainfall amounts recorded in two-month intervals (up to six) over a 17-mile North/South and approximately 13.5-mile East/West grid. Premiums for grazing run about $2-$4/acre and haying runs around $18-$24 (at 90% coverage and 100% productivity factor).
For this grazing example, shown in the following picture, we will calculate the 10-year average (2010-2019) for grid 23236, which is just south of Seneca and has Corning within its borders. We will split the year into five (Jan/Feb, Mar/Apr, Jun/July, Sept/Oct, and Nov/Dec) 20% intervals. The premiums (at 90% coverage and 100% productivity factor on 100 acres) per acre would be $4.21. In the last 10 years, loss payments have exceeded premiums every year except two (see second image example), with some years more than doubling premiums. The last 10 years averaged a 151% payout. If you stretch it out over 29 years, the average payout increases to 161%. If you would like to run your own estimates, here is the USDA Risk Management Agency website https://prodwebnlb.rma.usda.gov/apps/prf .
For more information please call Jim Ward at (785) 741-1652. The sales closing date for PRF is November 16.
