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Drought Insurance

Don’t suffer from a lack of water.

Drought insurance provided by Ozark Hills Insurance.

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Drought insurance is a part of the property and casualty policies and is mainly used for agricultural reasons for farmers in the states provided by the insurers. We’re here to help identify your risks to protect you from a lack of resources.

Pasturer, rangeland, forage (PRF), and how they work.

Forage and livestock producers in the United States can buy insurance to mitigate forage production risk. Pasture, rangeland, forage (PRF) insurance was developed by the U.S. Department of Agriculture (USDA) and Risk Management Agency (RMA) and has been available in the United States since 2009.

The rainfall index is based on data that is specific to grid locations.

The National Oceanic and Atmospheric Administration Climate Prediction Center gathers data from specific grid locations. Each grid area is 0.25 degrees in latitude by 0.25 degrees in longitude. The grids do not follow state, county, or other geopolitical boundaries. The rainfall index is not based on an individual farm or individual weather station precipitation data but rather is based on, or interpolated from, data from multiple weather stations. The historical index value, also called the expected grid index, is set to a 100 percent level; and an indemnity is paid when precipitation falls below an elected coverage level, the trigger grid index.

Different options are available to provide coverage for a farm.

Premiums will vary by the selections made by the producer. Each option should be considered when purchasing PRF insurance. When using PRF insurance, a producer must select coverage for either grazing or haying purposes. Although acreage under one policy may only be selected to be insured for one intended use, producers can have separate policies even on the same farm, such as 50 acres in one field for grazing and another field of 50 acres for haying.

Each intended use has its own base county value.

The RMA assigns each grid area a base dollar value per acre for grazing and a base dollar value per acre for haying, which reflects typical production values for that area. In 2013, the county base level for grazing varied across the state from $39.21 to $43.17 per acre, and the county base level for haying was $142.15 per acre.

Coverage levels range from 70 to 90 percent.

The coverage level establishes the rainfall deviation from the index when insurance pays an indemnity. The government subsidizes different coverage levels at different rates. The government will pay 51 percent of the total premium at the 90 percent coverage level, 55 percent for 80 and 85 percent coverage, and 59 percent for the 70 and 75 percent coverage levels.

The productivity factor allows for customized PRF insurance policies.

Producers will select a productivity factor between 60 and 150 percent and will adjust the county base level per acre accordingly. This factor allows producers to adjust their forage value based on the specific productivity of their land. For example, if a farmer feels that a heavily fertilized hay crop needs more protection than the original county base level, then that farmer would select a productivity factor greater than 100 percent to increase the level of coverage.

Missouri forage and livestock producers can buy insurance to mitigate risk.

For Missouri, PRF insurance is based on a rainfall index and provides coverage when the precipitation in an area declines from its long-term, historical norm. The deadline for purchasing this insurance is typically in mid-November the year before the calendar year being covered.

For more details on what drought coverage is right for you, contact us today.

Contact one of our PRF Specialists.

Hayden Ballard

Adam Isaacs

Kailey Shay

Riley Shay

Drought Insurance - View of Farmer Inspecting Wilted Corn Plants on His Farm

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