Insurance for Lack of Precipitation in California Exists?
Yes.
Pasture, Rangeland and Forage Insurance sales close December 1 by CCA Communications Director Katie Roberti
For those who have attended CCA events or local cattlemen’s association meetings in recent years, lack of precipitation insurance—known as Pasture, Rangeland and Forage (PRF) Insurance—is something most have probably heard about, read about or potentially acquired about obtaining at one point or another. Over the last decade, WSR Insurance Services (WSR), (WSR), the exclusive insurance broker of CCA, has helped hundreds of CCA members and other livestock producers throughout the Western States obtain the insurance. “Pasture, Rangeland and Forage (PRF) is a USDA subsidized crop insurance product available to ranchers and perennial hay growers that provides protection for a single peril – Lack of precipitation,” WSR explains on the Ranch Protection page of their website. “It is an area-based policy that uses [National Oceanic and Atmospheric Administration] NOAA data to pay indemnities when precipitation is below historical averages.” With relief—from dry conditions plaguing California rangelands once again—currently on the minds of many in the ranching business, now may be the time to consider if the PRF program is an option (for those who have not already). Anyone potentially interested in exploring if the insurance program makes sense for their operation still has time to do so before sales of coverage for next year closes on Dec. 1, 2021. While the deadline is quickly approaching, fortunately, Jim Vann,, Woodland, and Matt Griffith, Vann Griffith, Williams, of WSR help ranchers determine if PRF is the right fit on a case-by-case basis. “What Jim and I do, [is] we go meet with producers," Griffith said. "We pull up their history of how PRF would work at their location, and their history actually started in 1948.” 32 California Cattleman October 2021
Griffith explains through PRF, ranchers are insuring their historical rainfall amounts in two-month windows, and with that, there is no upfront premium. The policies are area-based and cover the size of areas that are 17x17 miles on a grid system. "What we are looking for is volatility at the end of the day," Vann said. "Do we get rain? Do we not get rain? Over time, let's just take like January and February, you get a lot of volatility over the last 20 years of getting normal rainfall and not getting normal rainfall. That's what we are trying to insure…to create that policy to where we have a timeframe where we have less precipitation. That claim will then offset your losses for not having the rainfall, not creating grass growth to create pounds on cattle.” Working with Silveus Insurance, Insurance, a computer program called RangeCalc is used to help determine how to set the policies up and for what 60-day intervals. “It [RangeCalc] shows which intervals are going to be most advantageous to your operation,” Griffith said. “We combined that information along with the recommendation from the rancher on when the timeline is most important to them to set up a policy where we try to encompass as many intervals as we can that make sense so that you have coverage for the whole year.” Griffith says the philosophy on how he and Vann write PRF policies enables them to make sure that if a rancher does owe a premium at the end of a policy, the operation can offset the cost of the premium through gains elsewhere such as increased stocking capacity or higher weaning weights. “We sit down, and we go over the performance of the last 70 years, make sure it’s a good fit for the operation and ...CONTINUED ON PAGE 34
