The sales closing dates for an insurance tool introduced a few years ago to help manage risk associated with drought or a lack of rainfall in pastures and rangeland has been moved up to September 30, 2010.

Pasture Rangeland Forage (PRF) crop insurance is a group risk policy that covers livestock grazing and forage land, and in Texas, it is based on a Rainfall Index. The Rainfall Index (RI) uses National Oceanic and Atmospheric Administration (NOAA) data and the index reflects how much precipitation is received relative to the long-term average for a specified area or grid and time frame.

Each grid covers an approximate 12- by-12-mile grid. You must select at least two, two-month time slots, where rain is important to your operation in your area. These time slots are called index intervals. Your insurance payments will be calculated based on the actual rainfall in the grid and how it differs from normal rainfall within the grid and index interval(s) you have chosen to insure.

When the final grid index falls below your “trigger grid index” (coverage level multiplied by the expected grid index), you will receive a loss payment. This insurance coverage is for a single peril—lack of rain. Coverage is based on the experience of the entire grid. It is not based on individual farms or ranches or specific weather stations in the general area.

PRF insurance was designed for maximum flexibility.  You are not required to insure all your acres, but you cannot exceed the total number of grazing or haying acres you operate. This allows you to insure only those acres that are important to your grazing program or hay operation. By selecting a Productivity Factor, you can establish a value between 60 and 150 percent of the County Base Value and match the amount of your protection to the value of forage that best represents your specific grazing or hay operation, as well as the productivity of your land.

You will be asked to make several choices when insuring your grazing land or hay land production, including coverage level, index intervals, productivity factor, and number of acres. You should work with your crop insurance agent to view the map and index grids for your area, and assign acreage to one or more grids based on the location and use of the acreage that is to be insured.  It is critical that producers review the historical indices for their grid ID to determine how well the past results correspond to their past observations.  Remember the sales closing date for 2011 crop is September 30, 2010.

The web site with more information on this program and grid locations and can be found at:  http://www.rma.usda.gov/policies/pasturerangeforage/