Insuring your pasture, range and forage

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), 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, 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.”

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, 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

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we can usually be done in an hour, hour and a half or so,” Griffith said. "It is required for a producer to be enrolled at FSA and have a 1026 form on file. That's for all crop insurance to receive the subsidy just to say you are not disturbing what's categorized as a wetland. Other than that, the application process is fairly simple."

Although California producers are currently in a drought, something to note is that this program is not reliant on any drought declaration or designation.

“Each 60-day window that we insure is its own miniinsurance policy. You don’t have to have a drought year to receive benefit for PRF because once your 60-day interval ends, we just start at zero on the next interval,” Griffith said. “So even though we’ve had a couple of years of severe drought, we’re insuring historical precipitation amounts in two-month intervals, so the drought that we’ve experienced the last couple of years doesn’t affect that historical average a tremendous amount because you are just adding one more year to 70 years’ worth of data,” Griffith said.

While investing in PRF makes sense for some, WSR is upfront that the program is not a good fit for every ranch.

“We don’t write every policy from potential customers that come in,” Griffith said. “We sit down, and we do an overview, and there are a lot of times we tell people we wish we could help, but because of the location, the NOAA history, where the weather stations are, it might not be the right program for you." "We always come into it with the philosophy of give us a budget. We'll start there, and then we build up from that if the person wants to," Vann said. "Nobody says you have to do all of your acres."

Vann encourages producers to turn in all leases, permits, deeds, etc., during the sign-up process for the program and getting documentation squared away with FSA.

“We want to look at all the ranches you have because some areas are going to be better for this program versus others…so if we can't look at it all and we are only looking at what FSA has, we may be missing some of your best ranches to put this coverage on, and so it only helps you, in this case, to build out a better policy.”

About a year ago, USDA’s Risk Management Agency commissioned a review of PRF and subsequently issued a series of “Alternative Recommendations” proposing significant changes to PRF, which beginning in 2022, would have caused the program to cease functioning as intended as a valuable risk management tool for livestock producers and forage growers. CCA sent out an e-blast encouraging members to comment and urge RMA not to disrupt the program. Fortunately, no significant changes ended up being made to the program. The most significant change is the sales deadline. Previously set at November 15, the deadline has been pushed back to December 1.

While the deadline is now December 1, Vann advises producers not to delay reaching out as working with FSA and ensuring the documents needed are all in place takes time.

“I still tell everybody, November 1,” Vann said.

Those interested in learning more about the program or getting in touch with WSR should visit https://www.wsrins. com/ranch-protection/ and fill out the contact information form at the top of the webpage. Potential customers may also call the toll-free number (877) 920-8500 to speak with a WSR Insurance agent.

In September, WSR’s Jim Vann and Matt Griffith were featured on Sorting Pen: The California Cattleman Podcast and gave a deep dive into PRF insurance. Listen to the episode now at calcattlemen.org/podcast or on your preferred platform for streaming podcasts to learn even more about the program and other services offered by WSR, the exclusive insurance broker of CCA.

Beef Promotion Operating Committee Approves Fiscal Year 2022 Checkoff Plan of Work

The Cattlemen’s Beef Board (CBB) will invest approximately $38.9 million into programs of beef promotion, research, consumer information, industry information, foreign marketing and producer communications during fiscal 2022, subject to USDA approval.

In action at the end of its September 9-10 meeting in Denver, Colorado, the Beef Promotion Operating Committee (BPOC) approved Checkoff funding for a total of 13 “Authorization Requests” – or grant proposals – brought by nine contractors and subcontractors for the fiscal year beginning Oct. 1, 2022. The committee, which includes 10 producers from the Cattlemen’s Beef Board and 10 producers from the Federation of State Beef Councils, also recommended full Cattlemen’s Beef Board approval of a budget amendment to reflect the split of funding between budget categories affected by their decisions

Nine contractors and three subcontractors brought 15 Authorization Requests worth $47.4 million to the BPOC this week, nearly $8.5 million more than the funds available from the CBB budget

“I know I speak for all of the cattlemen and women on the BPOC when I say we take our roles on this committee very seriously,” said CBB and BPOC Chair Hugh Sanburg. “We examine all of the Authorization Requests very carefully to determine which proposed initiatives and activities will provide the greatest return on Checkoff investments.

“Each year, we’re incredibly impressed by the amount of thought and innovation that our contractors put into their new plans. Our biggest challenge is determining how to allocate our limited amount of Checkoff dollars to these contractors so that we can make optimal progress toward our primary goal: driving beef demand. I personally thank all our contractors and committee members for their remarkable efforts and careful consideration as we make decisions that will propel the beef industry forward."

In the end, the BPOC approved proposals from 9 national beef organizations for funding through the FY22 Cattlemen’s Beef Board budget, as follows: • American Farm Bureau Foundation for Agriculture - $926,000 • Cattlemen’s Beef Board - $1,850,000 • Foundation for Meat and Poultry Research and

Education - $500,000 • Meat Import Council of America / Northeast Beef

Promotion Initiative - $494,760 • National Cattlemen’s Beef Association - $26,010,440 • National Institute for Animal Agriculture - $79,160 • North American Meat Institute - $430,440 • United States Cattlemen’s Association - $210,000 • United States Meat Export Federation - $8,400,000

Broken out by budget component – as outlined by the Beef Promotion and Research Act of 1985 – the FY22 Plan of Work for the Cattlemen’s Beef Promotion and Research Board budget includes: • $9,558,830 for promotion programs, including beef and veal campaigns focusing on beef’s nutritional value, eating experience, convenience and production • $8,810,000 for research programs focusing on pre- and post-harvest beef safety, scientific affairs, nutrition, sustainability, product quality, culinary technical expertise and consumer perceptions. • $7,654,780 for consumer information programs, including Northeast influencer outreach and public relations initiatives; national consumer public relations, including nutrition-influencer relations and work with primary- and secondary-school curriculum directors nationwide to get accurate information about the beef industry into classrooms of today’s youth. Additional initiatives include outreach and engagement with food, culinary, nutrition and health thought leaders; media and public relations efforts; and supply chain engagement. • $2,627,190 for industry information programs, including dissemination of accurate information about the beef industry to counter misinformation from anti-beef groups and others, as well as funding for Checkoff participation in the annual national industrywide symposium about antibiotic use.

Additional efforts in this program area include beef advocacy training and issues/crisis management and response. • $8,400,000 for foreign marketing and education, focusing on 13 regions, representing more than 90 countries around the world. • $1,850,000 for producer communications, which includes investor outreach using national communications and direct communications to producers and importers about Checkoff results.

Elements of this program include ongoing producer listening and analysis; industry collaboration and outreach; and continued development of a publishing strategy and platform and a state beef council content hub.

The full fiscal 2022 Cattlemen’s Beef Board budget is approximately $42.7 million. Separate from the Authorization Requests, other expenses funded include $244,000 for program evaluation; $470,000 for program development; $200,000 for Checkoff communications resources; $550,000 for USDA oversight; $270,000 supporting services and litigation; and $2.1 million for CBB administration. The fiscal 2022 budget represents a decrease of approximately 1 percent, or $386,000, from the $43.1 million FY21 budget.

For more information about the Beef Checkoff and its programs, including promotion, research, foreign marketing, industry information, consumer information and safety, contact the Cattlemen’s Beef Board at 303-2209890 or visit DrivingDemandForBeef.com.

GENEPLUS

CALIFORNIA’S LOCAL MEAT SUPPLIERS STRUGGLE TO STAY IN BUSINESS

UC Davis Report Suggests Ways to Build Resilience

By Amy Quinton for the University of California, Davis

The University of California, Davis, Food Systems Lab has released a white paper showing the need to support California’s small and mid-scale meat suppliers and processors in order to build a more resilient meat supply chain. It describes how the meat supply chain and rural economies could benefit from regulatory changes and more collaboration among producers and other stakeholders in the system.

The pandemic shut down meat processing plants in 2020, as did recent ransomware attacks on JBS, the nation’s largest meat supplier. Report authors said this highlights the need to support small- and mid-scale suppliers.

“COVID and the ransomware attacks put a spotlight on how the concentration of the meat supply chain increased vulnerability in the food system,” said report co-author Tom Tomich, founder of the UC Davis Food Systems Lab and distinguished professor in the Department of Environmental Science and Policy. “We need to level the playing field so small- and midscale farms have an easier way to bring their product to market.”

The report says the lack of access to slaughter facilities, limited capacity of cut and wrap facilities, and concentration of marketing channels create conditions in which small- and mid-scale farms and ranches struggle to stay in business.

“These challenges are exacerbated by policies that tilt the playing field against small operators. Fortunately, new state and national legislation and programs are developing that could increase resilience in our food systems,” says Michael R. Dimock, Roots of Change program director and lead author for the report. “We need cities and counties to help fix the problems because local land use policies often impede development of resilient supply chains.”

Lack of access and limited capacity

years, California has lost half of its federally inspected meat processing plants, and the remaining facilities are unable to meet demand. Many of the 46 USDA-certified slaughter plants operating in California are closed to smaller producers.

“This means that smaller ranchers must drive hundreds of miles to reach a facility or have to wait months due to limited capacity,” said Tomich.

The report said a combination of federal, state and private investments could provide a broader geographic distribution of plants of differing scales. It also suggests expanding mobile, on-farm slaughter operations for sheep, goats and hogs, similar to those for beef.

Regulatory barriers and opportunities

Complex inspection requirements and other regulatory barriers make it difficult for small- and midscale producers to compete with big suppliers. The report suggests California create its own meat inspection program equivalent to the federal program to serve smaller ranchers. Prioritizing public procurement of local, high-value meat would also help expand market access for smaller producers.

Broader benefits of smaller operators

The report notes other beneficial roles of small- and mid-scale livestock operations, apart from the potential to increase resilience in our food system. Livestock grazing is a cheap and effective way to reduce wildfire risk. Supporting local meat processing also helps rural economies and creates community-based jobs.

The report was based on 27 interviews with people representing a wide spectrum of activities and points of view within the meat supply chain throughout the state. Authors are Courtney Riggle, Allan Hollander, Patrick Huber and Thomas Tomich of the UC Davis Food Systems Lab, and Michael R. Dimock with Roots of Change.

Funding for the study came from the TomKat Foundation and USDA Hatch Program.