New Mexico Drought Matter of Perspective, Risk

Perhaps it’s a matter of perspective. If you’re a cattle rancher in New Mexico without enough grass to feed your stock, it’s a drought. If you’re a satellite orbiting a couple of hundred miles away in space, things may look pretty green down on planet Earth. That difference of opinion has driven New Mexico cattle ranchers into a potential conflict with the U.S. Department of Agriculture (USDA) over a new federally subsidized insurance policy designed to provide drought protection. Despite record heat and record dry conditions in parts of the Southwest, some satellite imagery shows New Mexico’s “greenness index” doesn’t qualify ranchers there to collect on their policies, which cost several thousand dollars annually. From the perspective of the USDA’s Risk Management Agency, which oversees the pilot program to provide drought insurance, it’s a matter of certain policyholders being at the wrong place and the wrong time—and not understanding how their policies work. Due to the drought, ranchers have been selling off record numbers of cattle because they can’t feed them, and they’re looking for financial help from insurance policies they purchased that are part of a pilot program for New Mexico and seven other states administered by the RMA. The program uses data and satellite information to decide whether a payout should be made, and it counts all “biomass” in an area, including trees and weeds, under a “greenness index.” According to Matt Rush, executive director for the New Mexico Farm and Livestock Bureau, that index omits another index that he and others believe should be an important part of the drought-no drought equation: heat...more

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