PASTURE, RANGELAND, 

FORAGE RAINFALL INDEX 

CROP INSURANCE PROGRAM

Alternative Recommendations

September 21, 2020 
Contents

Overview....................................................................................................................................................... 3

Alternative Recommendation 1: Block Out Winter Intervals................................................................... 3

Alternative Recommendation 2: Lengthen the Intervals .......................................................................... 3

Alternative Recommendation 3: Factoring in Livestock Numbers........................................................... 3

Alternative Recommendation 4: Weighted County Base Values (CBV) by Intervals: ............................4

Alternative Recommendation 5: Move the PRF SCD .............................................................................. 4

Alternative Recommendation 6: Utilize Smaller Grid Sizes .................................................................... 4

Alternative Recommendation 7: Limit Grid Selection to Physical Location of Acreage .........................4

Comment Period: .......................................................................................................................................... 5
Overview 

This report provides additional recommendations that the Risk Management Agency (RMA) has 

received from stakeholders on the Pasture, Rangeland, Forage Rainfall Index (PRF-RI) crop 

insurance program. These recommendations are in addition to the contractor recommendations. 

Stakeholders are encouraged to review and provide comments on all recommendations in this 

report and the contractor’s recommendations. The purpose of RMA asking for comments is to 

help strengthen the integrity of the PRF program and make it a sustainable risk management tool 

for livestock and forage producers. In addition to recommendations that are included, RMA 

encourages stakeholders to submit other ideas that they believe will contribute to the

enhancement of the program. 

Alternative Recommendation 1: Block Out Winter Intervals 

o Currently, a producer can pick intervals in winter months when precipitation has no 

impact on forage growth. Should RMA eliminate intervals (e.g. October 1 to March 1) 

in areas where precipitation in that time period is of less value for forage growth? 

Alternative Recommendation 2: Lengthen the Intervals

o One issue with the current two-month interval is that a significant rainfall event on one 

day could cause a producer to not receive an indemnity, even though a loss occurs. For 

example, in the semi-desert environment of the northern plains, a small additional 

rainfall may be the difference between receiving an indemnity or not. A single rainfall 

event would have less impact on the outcome for a longer interval (e.g., 4 months).

 Should RMA consider lengthening intervals to 4 months or define a crop season 

interval appropriate for the region and typical forage growth patterns? 

Alternative Recommendation 3: Factoring in Livestock Numbers 

o Should RMA insure the number of head of livestock grazing the insured acreage rather 

than the acreage itself? RMA could use a producer’s livestock numbers to determine 

how liability is calculated in order to ensure producers are insuring an appropriate 

amount of acreage for their operations. 

o An alternate method for livestock numbers is stocking to 70% of the lands carrying 

capacity. The Farm Service Agency publishes Animal Unit Month (AUM) data for 

certain states which could be utilized to determine if the producer owns enough livestock 

in order to stock at 70% of the lands carrying capacity. Should RMA use livestock 

carrying capacity to determine the number of acres that can be insured? 
 Minimum Number of Livestock Requirement Example:

A typical 1,200 lb. cow Animal Unit (AU) eats about 30lbs of dry matter

forage/day. It takes approximately 11,000 lbs of forage to feed that AU per year. 

The insured acreage produces 1,800 lbs of forage/acre per year. 

11,000lbs/1,800lbs=6.1 acres/AU.

If a producer has coverage on 10,000 acres of rangeland, the max number of head 

that acreage could hold is 1,639 head. This number of head could then be used to 

set a minimum number of head required on that acreage. For example, RMA could

require producers to stock the acreage at 70% of the maximum, in this example the 

producer would need to have 1,147 cows. The producer would also need to be able 

to provide records for the number of head if requested by the Approved Insurance 

Provider (AIP) or RMA.

Alternative Recommendation 4: Weighted County Base Values (CBV) by Intervals:

o Should RMA modify the maximum allowable percent per interval to align with the 

historical proportion of annual precipitation per interval? For example, if the Apr-May 

interval historically receives 30% of the year’s precipitation, the Apr-May interval will 

have an interval CBV value of CBV*0.30. With this option, producers will no longer 

need “Percent of Value,” and producers will be able to select from one to six intervals 

that do not overlap.

Alternative Recommendation 5: Move the PRF SCD

o Move the PRF Sales Closing Date (SCD) to Dec 1st. This may be helpful to producers 

who are being asked to sign up during the busiest time of the year

Alternative Recommendation 6: Utilize Smaller Grid Sizes

o The current National Oceanic and Atmospheric Administration Climate Prediction Center 

grid size has generally been effective for the Rainfall Index programs, but there are times 

when the grid size does not accurately capture the variance in small rainfall events. A 

potential solution is to utilize a smaller grid size that could potentially account for the 

variations in these events. While there would not be any additional weather stations 

reporting, the interpolation process could provide more accurate results at the small grid 

size level.

Alternative Recommendation 7: Limit Grid Selection to Physical Location of Acreage

o RMA could limit insurance to 1) the actual grid ID where the acreage is physically 

located; or 2) limiting contiguous acreage to the County/grid ID where the majority of the 

acreage is physically located (NOTE: this change has already been made at the state 
level, and this would further limit to the county level) and require producers to select the 

same intervals for all acreage within the county.

Comment Period:

Comments may be submitted via email to rma.kcviri@usda.gov or by mail to Director, Product 

Administration and Standards Division, Risk Management Agency, United States Department of 

Agriculture, P.O. Box 419205, Kansas City, MO 64133-6205. RMA will accept comments 

regarding the results of this contracted study and alternative recommendations until close of 

business November 5, 2020. All comments received on or before November 5, 2020, will be 

considered and evaluated prior to making any changes for the 2022 crop year.