Midplains Ag

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4028435342

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51556 836 RD

Nebraska, USA

COVERAGE OPTIONS FOR LACK OF PRECIPITATION

Wow! 2022 has been hot and dry here. The lack of rain is becoming evident all around us. Looks like an early dryland harvest for corn and soybeans but what about your pastures??  My experience so far is that the calves will be coming home sooner than we would like. Why? The extreme lack of moisture is leaving those grasslands with a lot less to offer than in a normal year.

I often wonder, is there something we can do to help us keep raising cattle even when it does not rain? What safety nets are available? The first place most of us look at is FSA (Farm Service Agency). They have 2 programs LFP (Livestock Forage Program) and LIP (Livestock Indemnity Program). These 2 programs require extreme weather events or catastrophic losses to kick in. These 2 programs are kicking in already this year. Head over to your local FSA office and get signed up.

IS THERE ANYTHING THAT JUST COVERS LACK OF PRECIPITATION?

The answer is PRF (Pasture, Rangeland, and Forage) (Pasture, Rangeland, and Forage) policy administered by the RMA (Risk Management Agency) of USDA. This policy is specific to rainfall only. It is based on historical averages and has not subjective opinions dictating your indemnity. The premium is subsidized like your corn and soybean policy.

When I say, “based on data,” the data is collected by NOAA. Below you will see estimates for the 2021 & 2022 growing season. It has been dry in this grid. The percentage difference between actual rainfall and historical average is how indemnity is determined.

You are wondering how big the grids are, that they are basing this information off? They are based on degrees lat and long. Across the 48 contiguous states, they are approximately 17 miles by 12 miles (130,560 acres) about a quarter the size of Antelope County NE. The closer to the equator, the squarer they are. The grids lay with the latitudes and longitudes so you can have grids that cover more than one county. Many counties are broken into multiple grids here in the Midwest.

Above is a quote from one of our AIPs (Approved Insurance Providers). It breaks down and ranks the different intervals from 1 to 6 because the year is broken into 11 intervals you pick between 2 to 5 intervals that do not overlap. Then you allocate between those intervals to 100%.

Example

Feb-Mar 20%

Jun-July 50%

Aug-Sept 30%

Again, minimum of 2 intervals with a maximum of 5 in Nebraska because the minimum percent is 20% per interval.

We would love to know what questions you have about this product. Producers around the country for several years have seen these benefits: they can afford to buy the hay when their calves do not have enough grass, thanks to this policy. Or when they have low weaning weights, they can still pay rent. Please call us 402-843-5342 to set up a meeting.

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