How PRF insurance works, in plain words

1. The grid

The country is cut into squares a quarter of a degree on each side: about 17 miles north to south and 11 to 16 miles east to west. USDA works out each grid’s precipitation from weather stations, as an index where 100 is the grid’s normal for those two months. Your own rain gauge does not count. You pick a point inside the acres you insure and the grid follows from it. Every grid number has its own record from 1951; the calculator finds yours from a ZIP or coordinates, and each state page lists the grids county by county.

2. The eleven intervals

The year is split into eleven overlapping two-month intervals, January to February through November to December. You spread the policy over at least two of them, no month in two, each with at least 10% of the policy and no more than 50% or 60% or 70%, depending on the county. January to February is capped at 25% in 3,067 counties. Each interval pays on its own.

Across every grid at 90% coverage, the middle grid looks like this. Normal is the grid’s average precipitation for the two months; the premium is the full rate per $100 of protection; the last column counts the years from 1951 to 2025 when the index came in under 90.

Coverage costs least in July to August and most in September to October, on the middle grid. The price follows how often and how far the index has fallen short, so a cheaper interval is not a better buy. RMA’s handbook says choosing intervals “when precipitation is not needed for the insured crop or when precipitation does not normally occur is not an effective use” of the policy. On 7,899 of 13,307 grids, the interval with the most average payment over your share of the premium was one of the grid’s two driest.

3. Coverage level and USDA’s share

You pick 70%, 75%, 80%, 85% or 90%. At 90% an interval pays once the index is under 90; at 70% it has to fall under 70. A higher level pays sooner and costs more. USDA pays part of the premium, more at the lower levels:

4. The productivity factor

USDA sets a county base value per acre for grazing and for hay, the same on every grid in the county. You choose a productivity factor from 60 to 150 to move it up or down for your ground. Protection per acre is the county base value times your coverage level times the factor. The premium moves with it in the same proportion, so the factor changes how many dollars ride on the policy, not the odds or the payment per premium dollar. One factor per county, use and practice.

5. How a payment is figured

For an interval you insured, the payment is that interval’s protection times how far the index fell under your coverage level, as a share of it. At 90% coverage, an index of 72 pays (90 − 72) / 90 = 20% of the interval’s protection. Payment comes within 60 days after RMA publishes the final index, with no claim to file, and any premium owed comes out first.

A worked example on grid 30454, Barron County, Wisconsin: 100 acres of grazing land, 90% coverage, productivity factor 100, April to May and June to July, half in each. At 2027 rates the county base value is $32.80 an acre, the protection $2,952, the premium $305, of which USDA pays $155 and you pay $150 ($1.50 an acre). Run over 1951 to 2025, that policy would have paid something in 44 of 75 years, more than your share of the premium in 33, an average of $261 a year, and most in 1988: $1,656. The same policy on non-irrigated hay costs you $1,047 on a county value of $230.00.

6. What the record says

For every grid, interval and coverage level USDA prices, the calculator works out what $1 of full premium would have paid back over 1951 to 2025 at 2027 rates. At 90% coverage the middle is $0.87, and 90% of the 144,476 grid and interval pairs fall between $0.81 and $0.89. No grid or interval stands out. On the share you pay after USDA’s 51%, the same record is about $1.78 per $1. These are averages of a few big years and many small or empty ones. The neighboring grids and intervals move together, and none of it says what next year will do.

7. Dates for 2027

• Dec 1, 2026: sales closing. New policies and any change to coverage, intervals, acres or productivity factor are due at your agent.
• Dec 1, 2026: acreage report, with any lease signed and in hand.
• Sep 1, 2027: premium billed, no earlier than this.

From 2027, grazing acres need livestock you have an interest in, equal to at least 25% of the stocking rate, or no payment is due and the premium is still owed. USDA’s share needs form AD-1026 on file with the Farm Service Agency. Before you sign · What PRF does not do · How the calculator figures it

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