The Rainfall Index is derived from a long-term, highly reliable dataset developed and maintained by NOAA. The daily precipitation data is provided from 1948 to present and covers essentially all of the lower 48 states. The rainfall index does not explicitly predict individual forage production on a given producer's operation. Instead, the index is related to the amount of precipitation occurring in each specific 0.25 degree (approximately 12x12 miles) weather grids covering the contiguous 48 United States during each of six two-month intervals per year. The index is correlated with forage production but does not directly predict actual forage production. Key components of the PRF-VI Pilot Program include:
- The rainfall index is derived from a dataset developed and maintained by NOAA referred to as the Improved United States Precipitation Q.C. System and Analysis and referred to as the Unified Rain Gauge Database (URD) within NOAA. The rainfall data is provided by NOAA on an FTP server in three data bases: historical data from 1948 to 1997, historical data 1996 to 2003 and near real time data from 2004 to the present.
- The Climate Prediction Center (CPC) routinely produces quality controlled gauge-only precipitation analyses for the U.S. as part of its effort to monitor current and past conditions and to provide improved climate forecasts for the U.S. On a typical day the URD has 13000-15000 stations reporting into the system.
- NOAA-CPC uses an interpolation technique to translate station point data to the 0.25 degree grid format. All data used in the rainfall index have already been processed by NOAA and placed in the databases noted above. Therefore, use of the data for the rainfall index does not require any data processing of individual station data. Rather, the rainfall index makes direct use of pre-processed gridded weather to compute the index.
- Each each year is divided into six two-month intervals with interval one starting on February 1 and ending on March 31. The index starts accumulating the daily rainfall events on the first day of the specified interval through the last day of the same interval. The accumulated values for each of the six intervals are stored by year for all years from 1948 to 2003, resulting in 56 accumulated rainfall values (inches) for each of the six intervals for each of the 0.25 degree grids in the 48 contiguous United Stzates. The mean accumulated value is computed for each grid and interval. The computation of the index involves calculating the percent of normal value for each grid and interval.
- To help reduce the likelihood of a late, large event negating trigger payments after a prolonged dry season a percentile trimming method was applied where the 99.999 percentile cap was used to trim the 2-4 spurious high daily rainfall values that could potential occur over the history of any one grid.
- After extensive study GMS determined that the best way to capture the variations in conditions and allow producers the most flexibility to insure periods in the year that best reflect their local conditions was to divide the year into 6, 2-month interval with a start interval of February 1. This approach allows for the program to be standardized for the entire nation, maximizing computation and managerial efficiency of the program.
- The period of time to complete the annual forage production, regardless of the region is longer than any one of the two month periods, even in the northern latitudes of the United States. Because of this, GMS realized that the total insured value of forage should be applied to a time period longer than any one two-month period. Because environmental and growth conditions for forage are different across the United States, GMS utilized temperature as the primary factor influencing the length of the growing season, then based the maximum amount of annual coverage that could be assigned to any one interval growing season length. Areas with the longer growing seasons were restricted from insuring more than 50 percent of their annual coverage to any one interval and areas with the shortest growing season limited to 70 percent or less being applied to a single interval. Areas with intermediate length growing seasons were restricted to using a maximum of 60 percent of total annual coverage in any one interval.
- When the data is reported by NOAA, computers automatically log onto these sites, download the data and update the index value. The index values are maintained on two separate computer systems and are reported at the end of each 2-month interval. This value is then made available to insurance companies for computation of indemnity payments via RMA's web site.