The USDA currently has a perennial forage insurance program offered nationwide.. The program is the PRF Rainfall Index Program. Knowing that a lack of precipitation and forage growing conditions many times correlates to a reduction in grazable or hayable forage production, the USDA is offering the program, which covesr a decline in precipitation.
Many ranchers have implemented various risk management techniques to help alleviate some of the effects of drought; however, the ranching industry historically has not been able to participate in heavily subsidized federal crop insurance programs, like farmers have been able to do on their crops.
While the program is relatively new, you can take advantage of the available government subsidies (just like farmers do) and implement a solid risk management tool to help offset the some of the effects of drought.
Broken Arrow Corp Insurance is an equal opportunity provider. In accordance with Federal law and U.S. Department of Agriculture (USDA) civil rights regulations and policies, the USDA, its Agencies, offices, and employees, and institutions participating in or administering USDA programs are prohibited from discriminating on the basis of race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or activity conducted or funded by USDA (not all bases apply to all programs).
Rainfall Index Program
- Only covers a decline in area precipitation
- Rainfall recorded by NOAA
- Easy to understand
Vegetation Index Program
- Covered a decline in forage growth
- NDVI data recorded by EROS
- This program was cancelled by RMA
- Easy to understand
- USDA pays over half of the premiums
- Ability to only insure periods of the year that matter to your production
- No insurance adjustments needed
- Premiums not due until next September
- Coverage Levels = 90, 85, 80, 75, 70%
- Select county values (PF) = 60 – 150%
- Do not have to insure all acres
- No requirements on how you spend the payments – i.e. alternative feeds, moving livestock, destocking losses, new land leases, etc.
- Provides more coverage than NAP (NAP offered via FSA)
- You can have both: this program and NAP and receive benefits from both
- Signup deadline is November 15th
The graph above illustrates how this program would have performed for one of our clients north of Canadian, Texas in Lipscomb County.
While premium rates, prices, and histories WILL NOT be identical for all areas, it is important that this example is based on an actual ranch and histories in this area.
It is important to remember that actual results each year vary.
Broken Arrow Crop Insurance can run similar scenarios for your ranching operation. These scenarios will increase your knowledge of the program and how it relates to your operation; thereby, maximizing the effectiveness of the risk management tool for your ranch.