Pasture Rangeland Forage: A Marathon Not A Sprint
Article and photos courtesy of AgRisk Advisors
Droughts are a constant threat to the cow-calf business, impacting forage availability and driving up input costs. The Pasture Rangeland Forage (PRF) program offered by the U.S. Department of Agriculture can be a valuable tool to help manage these risks and provide financial security for your cattle operation.
Fortunately, there are risk management tools available to cattle producers. Among them is the Pasture Rangeland Forage Program (PRF) offered by the U.S. Department of Agriculture which has been available since 2007 but really took off when the rainfall index was expanded to the lower 48 in 2016.
While valuable, navigating PRF solo can be daunting even for seasoned ranchers. AgRisk Advisors, affiliated with Silveus Insurance Group, specializes in helping ranchers make PRF and other USDA insurance programs work for their operations.
Filling a Vital Need
“When we first started with this program, it was a new concept for many customers. Essentially, the program pays producers when precipitation falls below the historic average during a two-month timeframe,” explains Aaron Tattersall.
With customers in every state east of the Mississippi, AgRisk Advisors has nearly two decades of experience advising cow-calf producers on how to implement PRF into their operation.
“As PRF has grown popular, more inexperienced agents see an opportunity but lack the tools and experience,” cautions Aaron Kravig, a fifth-generation rancher and AgRisk Advisor.
According to Aaron Kravig, these pop-up agents rely on easy sales pitches, implying it’s a guaranteed deal, which frustrates seasoned advisors. Misuse of the program by these agents leaves a bad taste in the mouths of producers who have dealt with them.
What Exactly is PRF?
“From a producer standpoint,” says Kravig, speaking from personal experience, “it’s increasingly challenging to stay in production agriculture, especially for cow-calf operations. This is one of the few programs available for cattlemen.”
As a true insurance program, PRF provides a safety net for dry weather and the constant challenges faced by producers. More are warming up to implementing this program to sustain and extend their operations.
“It’s subsidized and offers a higher level of coverage than the FSA NAP (Noninsured Crop Disaster Assistance ProgramNoninsured Crop Disaster Assistance) Program, and PRF has really helped producers over the years,” says Tattersall.
“It’s important for producers to budget for PRF for the long term and stick with it. It works over time,” notes Tattersall.
Tattersall adds that PRF allows flexibility in premiums by adjusting enrolled acres.
Eligibility is based on two factors (1) risk in the ground they are grazing and (2), ownership of livestock. Producers may insure ground they own or lease (including government agency land) to graze their livestock, notes Kravig.
AgRisk Advisors helps customers by mapping eligible land to determine coverage options. While headcount doesn’t affect eligibility, producers must own livestock and prove the land is used for grazing.
“I think PRF may benefit smaller-scale operations and newer operators,” continues Kravig, “by easing the pain of higher input prices.”
Considerations for Newcomers
For first-time PRF producers, AgRisk Advisors ensures it fits the budget. It may be best not to insure all acres at once.
“You can cover 100, 1,000, or 10,000 acres,” explains Kravig. “It’s not all or nothing.”
He adds that many customers start with a percentage of their acres and gradually increase over time, as they see how the program performs for their operation.
Overcoming Roadblocks
“I can speak personally from for my own operation in eastern Colorado,” shares Kravig. He recommends that ranchers don’t think of it as a short term deal, It’s a long-term commitment.
Tattersall provides some additional insight based on a study of Customer policies in 2023. Last year was one of the wetter years we’ve had in a while for many Western states.
“By the billing deadline last year, September 1, 2023, 70% of our customers experienced average to above average precip during the first five months of 2023. So, most of our customers received a premium bill.
“By the time the full coverage expired on the 2023 policies, only 30% of our customers had losses that didn’t fund their premium. In other words, the below-average precipitation during the late summer and fall triggered losses to fund their remaining premium. This shows that even in wet years, as long as your policy is set up the right way with an AgRisk Advisor, you’re going to be served well. And that was a wet year.”
This year, it’s been dry in the West, so most policies are expected to be funded by the time the premium comes due, depending on the operation’s location. The key point being emphasized is the importance of maintaining coverage for the long term.
Another common objection from any operation or business is the cost of premiums. While there are ways to adjust the premium to make it more manageable, such as enrolling fewer acres or selecting different coverage levels, a large premium in an average rainfall year can deter producers from continuing coverage. This again underscores the importance of long-term planning and an understanding of how the program works over multiple years.
Long-term Success Strategies
Engaging with the PRF program requires understanding its long-term benefits and commitment. This program is not a quick fix but rather is one designed to smooth out the roller coaster of inevitable dry weather.
AgRisk Advisors has seen producer interest in PRF increase significantly during drought periods.
“Anytime you get into a drought pattern, you’re obviously going to have more interest from producers,” says Kravig. “If it’s been raining every month, you’re probably not thinking, ‘Oh, hey, I need protection against a lack of precipitation.’
But it should be noted that perceived short-term results of PRF can discourage producers.
“We’ve all run into producers who quit the program after a year or two because it wasn’t all that it was promised to be,” adds Tattersall. “Education has been crucial in helping producers understand how to integrate this program into their operations…No producer wants to receive a PRF loss because if they do it means its been dry! On the other hand when PRF losses have not funded 100% of their premium producers have experienced above average precipitation typically resulting in livestock gains…writing a PRF premium check isn’t’ a bad bet to lose!
Successful integration of PRF into a ranching operation also relies heavily on education and proper planning. AgRisk Advisors spend hours between software and customers to ensure coverage is placed correctly based on long-range weather and historical data. They can also track a policy for a customer for an entire year to help them get a feel for the program.
AgRisk Advisors’ Role and Expertise
AgRisk Advisors play a significant role in helping producers navigate the complexities of the PRF program. Having a local presence and production background offers customers a sense of comfort and trust.
“I’ve been working with AgRisk Advisors as an agent for six years,” Kravig shares. “And I’m proud to work with the company. We have a great team and excellent resources. (Many) are involved in production practices while serving as agents, which gives our customers a real sense of commonality.
Cattle producers can visit PRFadvisors.com to learn more about the insurance program and working with the AgRisk team.
By focusing on long-term success and integrating the PRF program into their operations with professional support, Tattersall and the AgRisk team are confident that producers can effectively manage their risks and achieve sustainable growth.
“We are very proud of who we serve and our customers, ranchers and farmers.”
For more resources such as weekly weather forecasts, long range forecasts, podcasts, and much more, visit AgRiskAdvisors.com or PRFAdvisors.com.
