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PRF Vegetation Index - NEW MEXICO

PRF (Pasture, Rangeland, and Forage Insurance) Vegetation Index

Covers ALL counties in NEW MEXICO

Sales Closing is November 15, 2013 for PRF (Pasture, Rangeland and Forage Insurance) at which time all applications, acreage reports and other required paperwork must be completed for 2014 coverage.

Premium is not due until September 1, 2014

For more information give us a call TODAY at:  1-877-570-5517

This is for informational purposes only. 

The USDA has implemented a risk management product to give protection to ranchers and farmers who depend on pasture, rangeland, and forage for grazing and/or haying. The premium on PRF is relatively inexpensive. The premium cost in MOST counties ranges from $0.25 through $1.50 per acre on grazingland. Call us at 1-877-570-5517 to see if this premium rate applies in your area.  The PRF program under the Vegetation Index provides protection against "lack of vegetation" as determined by the US Geological Survey, Earth Resources Observation and Science data center.  The PRF insurance is reinsured and subsidized by USDA up to 59%. 

With the drought continuing causing the vegetation in pastures to be greatly reduced, this may be a product that would be helpful to your ranching operation.  However, this is not "DROUGHT" insurance.  I realize that the drought is what makes the grass and all other vegetation not grow, but this product does not cover the drought, just the "lack of vegetation".

About Pasture, Rangeland, and Forage Insurance (PRF) - Vegetation Index

·         This risk management tool insures against widespread loss of production of the insured crop in a designated area called a grid. Coverage is based on the experience of a grid rather than individual ranches and/ or farms.
·         Coverage is available for two crop types: Grazingland and Hayland. 
·         Losses are paid when the Final Grid Index falls below the insured’s "trigger level".
·         USDA subsidizes the premium up to 59%.

Levels of Coverage and Productivity Factors

·         Coverage levels are available from 70% to 90%, in 5% increments.
·         Productivity Factors are available from 60% to 150%, in 1% increments. This allows an increase or decrease in the price.
·         Productivity factors allow individualization of coverage based on the productivity of the crops produced.

County Base Value

Established production value of the grazingland and/or hayland crop.  This is essentially the "base" price for the county by crop type. 

Grid ID #

The Grid ID # corresponds to where the insured land is located and is determined by using the RMA website. The Grid is utilized to determine the Expected Grid Index and the Final Grid Index which is used in premium and loss calculation. The Grid ID # will be reported on the Acreage Report.
·         Vegetation Grid: Acreage within each approximate 4.8 x 4.8 mile (8 km) gridded area, established utilizing USGS,EROS, NDVI data and are identified by longitude and latitude.  Vegetation is measured indicating the density of biomass on the ground via satellite imagery.

Grids are approximately 4.8 x 4.8 miles, giving many counties multiple grids.
NOTE: Look up your grid ID here: http://agforceusa.com/rma/ri/prf/maps


Vegetation Index Intervals 
Coverage is available over 8 intervals, in 3 month increments, giving you greater flexibility. 
Here are the Intervals:
·         February/March/April
·         March/April/May
·         April/May/June
·         May/June/July
·         June/July/August
·         July/August/September
·         August/September/October
·         September/October/November

You can NOT choose a month twice.  Ex:  April/May/June and May/June/July.  This is overlapping months and it is currently not allowed.
Only 1 interval must be insured under the Vegetation Index program, with a maximum of 3 intervals, per grid #.
A coverage unit is all insured acres within a Grid ID for each crop type (grazingland or hayland) and index interval.
Important Dates
The sales closing and acreage reporting date is November 15 preceding the start of the crop year. 
Premium is not due until the following September 1. 

How Coverage Works
 The coverage is based on a Dollar Amount of Protection per Acre. The actuarial will contain the County Base Value per acre, by crop type. 
 This example is based on grazingland. 
·         County Base Value = $7.41 - Published in the county actuarial, by crop type
·         Coverage Level = 85% level - Elected by the grower between 70% and 90%
·         Productivity Factor = 150% - Grower selects a number between 60% and 150%
·         $7.41 x .85 x 1.50 = $9.45 - is the Dollar Amount of Protection per acre 

The same dollar amount of protection per acre will apply to all insured acres by crop type for the county.

Loss Payments
·         Indemnities are based on the deviation from normal for each grid.
·         A payment may be made only if the Final Grid Index for the insured unit is less than the grower’s "trigger level". 
·         The payment will be equal to the payment calculation factor multiplied by the policy protection per unit.
·         The payment calculation factor includes a total loss factor.  A total loss factor is a factor used in the payment calculation that increases the amount of loss incrementally until a total loss is paid when the final grid index is less than or equal to 30% of the expected grid index.  The factor will be set at 0.30 unless otherwise specified in the Special Provisions.  The total indemnity will never be more than 100% of the policy protection for the unit. 
·         No adjuster is needed.* USGS,EROS scans the grid approximately every 2 weeks, records and complies the data and determines what the final grid index is for the interval.  RMA compiles and checks the data and posts the percentage of normal (final grid index) for each interval and grid, and then the company issues a loss check when applicable. 
Loss Example:
 Using the coverage example above, there is $9.45/acre coverage and the final grid index comes in at 50%. 
Take your trigger level – final grid index ÷ {your trigger level – (expected grid index x total loss factor)} = payment factor (NOT to exceed 1.0 or 100%)
Dollar amount of protection x payment factor = loss payment
85% (your trigger level) - 50% (final grid index) = 35% ÷
         85% - (100 x .30) = .636 payment factor
         $9.45 x .636 = $6.01/payable per acre

Program Availability

Vegetation Index is available in ALL New Mexico counties. 
It is also available in some other states.


Once you determine your county, acres, grid number and select your intervals, level, and productivity factor, you wait to see how much vegetative growth your grid has during the insured interval. If the final grid index is not as much as your "trigger level", as calculated by US Geological Survey, Earth Resources Observation and Science data center, then a payment will be made to you. No action is needed by you or an adjuster.*
* (unless your dollar amount exceeds a specified amount or you are chosen for a random review)



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