PRF (Pasture, Rangeland, Forage) is a crop insurance product used to protect against less than average rainfall.

 

Let’s take a look at how PRF has performed so far in 2023. 

Below is a chart showing the average rainfall for each PRF interval against the actual rainfall in 2023. This data is specific to a 17 mile x 17 mile grid. In this example, we are using the grid for Ackley, IA.

*Rainfall shown in inches.

The green intervals represent the intervals that experienced less than average rainfall, which is 7 out of the 9 completed intervals.

Now you may wonder, how a PRF policy would have paid so far in 2023. Below are examples for grazing and haying ground.

 

Grazing

Hardin County grazing ground is valued at $69.70. You can elect up to 150% productivity factor, which gives you $104.55 value per acre. The highest level of protection is 90%. Given these elections, let’s look at payouts with different interval election strategies.

 

Odd Intervals (Jan-Feb, Mar-Apr, May-Jun, Jul-Aug, Sept-Oct, Nov-Dec)

Net indemnity per acre = $14.25

 

Even Intervals (Feb-Mar, Apr-May, Jun-Jul, Aug-Sep, Oct-Nov)

Net indemnity per acre = $18.28

 

Summer Time Intervals (May-Jun, Jul-Aug, Sept-Oct)

Net indemnity per acre = $22.44

*Keep in mind the Oct-Nov and Nov-Dec intervals are not complete. 

 

Haying

Hardin County haying ground is valued at $346 per acre. You can elect up to a 150% productivity factor, which gives you $519 value per acre. The highest level of protection is 90%. Given these elections, let’s look at payouts with different interval election strategies.

 

Odd Intervals (Jan-Feb, Mar-Apr, May-Jun, Jul-Aug, Sept-Oct, Nov-Dec)

Net indemnity per acre = $70.78

 

Even Intervals (Feb-Mar, Apr-May, Jun-Jul, Aug-Sep, Oct-Nov)

Net indemnity per acre = $90.79

 

Summer Time Intervals (May-Jun, Jul-Aug, Sept-Oct)

Net indemnity per acre = $111.37

*Keep in mind the Oct-Nov and Nov-Dec intervals are not complete. 

 

Historical Performance

In the past 10 years, here are the number of years each of these strategies would have paid out.

Odd Intervals – 7

Even Intervals – 5

Summer Time Intervals – 6

 

Given 2023 performance and historical performance, the PRF product is a good long term risk management product to consider.