Newer High Elevation Weather Stations are Costing Livestock Producers Millions

By: Brandon Willis

USDA’s effort to expand insurance options for livestock producers is impressive. Pasture, Rangeland, and Forage (PRF) is a key program for livestock producers, it’s a great program and it needs to continue relatively unchanged. Unfortunately, in isolated areas in the west, including Wyoming, data used to determine PRF payments is wildly inaccurate, costing producers millions of dollars and forcing some producers to not enroll in the only insurance program meant to protect them on dry years.

The Issue

PRF is an area-based program that is insuring against the loss of precipitation. By definition, area-based programs do not take actual producer experience into account.  For example, with PRF, at times, precipitation hits weather stations yet miss insured acres; at other times, the opposite occurs. Over time, these two scenarios should average out. If somebody struggles to understand this risk then they shouldn’t use PRF.

USDA’s Risk Management Agency (RMA) relies on National Oceanic and Atmospheric Administration (NOAA) to provide the precipitation data used for PRF. This data wasn’t invented for PRF, but it has worked well in most locations. While NOAA’s transparency rivals a brick wall, I have full confidence that they do their best to provide accurate data. Unfortunately, in certain areas, if the goal is to compare current precipitation with historical, the data is flawed. And when I say flawed, we aren’t talking it’s a “bit off.” Rather, it’s so far off that it nearly eliminates the chances of PRF ever providing assistance, even during very dry conditions. The result? Upset producers who didn’t get what they bargained for.

The Source of the Problem

The flaw in the program is seen in the western U.S., particularly in mountainous regions. The historical data, the data that producers insure against, stretches back to 1948. Early on when weather stations were installed in the west, many were put in towns or at airports. Towns and airports tend to be in valleys and at lower elevations. More recently there has been a trend to install weather stations at higher elevations, often twice as high as the original weather stations that set historical precipitation levels. These weather stations are often part of USDA NRCS’s SNOTEL stations. These stations may capture much higher levels of precipitation than their valley counter parts, which results in recent precipitation totals that are higher than historic totals—dramatically in some cases.

The chart below illustrates three examples of how SNOTEL stations at high elevations in Wyoming capture considerably more precipitation than the historical averages. Sites like these impact the current precipitation data enough to make it nearly impossible to provide any protection to producers.

Average, Annula Precipitation in Inches

Conclusion

Ironically, in recent years there have been calls for “more weather stations,” to improve PRF’s accuracy. If those weather stations are installed at higher elevations, nothing could provide less accurate precipitation data. Skewed weather data has already cost livestock producers tens of millions of dollars, and, for a handful of producers caused them to not trust USDA. It’s not a minor issue and it cannot be ignored. This issue needs to be addressed for 2026.

What is the solution? First, the solution is NOT a wholesale change to PRF.  We should not throw the baby out with the bathwater. Whatever changes are made need to avoid negative impacts on the program as a whole and the grids that provide accurate precipitation data.

Two solutions seem reasonable. First, attempt to fix the data used by PRF. To do this RMA and NOAA should immediately collaborate and determine if there is a way to use the current precipitation datasets but eliminate the impact of high elevation weather stations that are “newer,” and showing significantly higher levels of precipitation than previous weather stations. Second, if the NOAA data cannot be fixed, then RMA needs to offer PRF Vegetation Index (VI).  VI has been tested prior to 2015 and was a successful risk management tool – something that we do not have now in these areas. Reintroducing PRF VI would create some additional work, yet, allowing producers in these regions where PRF is practically uninsurable would be worth the effort.

About the Author: From 2013-2017 Brandon Willis oversaw USDA’s insurance programs as the Administrator of the Risk Management Agency. Prior to that, he served as a Senior Advisor to the U.S. Secretary of Agriculture Tom Vilsack. He owns Ranchers Insurance LLC.