PRF Insurance: Drought Protection When You Need It

Cattle standing in drought pasture
11 Oct 2023

October typically brings freezing temperatures and the wrapping up of harvest. Many farms are working long hours to finish harvest, get tillage done, and do any late fall ditching so the fields are prepped and ready to go for spring. Livestock producers have other responsibilities that they need to get done before the long, cold winter arrives. Barns need to be prepared, feed needs to be accounted for, and the animals to be brought back from summer pastures to the yard for winter. Whether it’s crops or livestock, everything comes down to preparing for what is to come. 

As we go through October and draw closer to the end of the year, it is good to get started thinking about next year. When planning for next year, we always look back at previous years to remember what happened. Over the past three years, summer rains have been spotty and hard to come by. This has put stress on livestock producers as pastures have stopped growing and many farms have had to sell part of the herd or use precious winter feed to keep their animals fed and growing. Planning for a drought isn’t something anyone wants to do, but something that should always be in the back of your mind.

One way to plan for those drought conditions is to consider an insurance product called Pasture Rangeland Forage (PRF). PRF is a rainfall index insurance plan for those who graze their animals or grow forage for animal production. The rainfall index measures how much precipitation was received for a specific area and timeframe relative to the historical average. The specific areas are broken out into 17 by 17 square mile grids starting at the equator. The amount of rainfall is measured by data collected and maintained by the National Oceanic and Atmospheric Administration (NOAA) Climate Prediction Center. 

With PRF, you have 11 different index intervals of two sequential months each to pick from. An example of an interval would be January and February or June and July. Producers select which interval they want to insure, so it is very important to know historical rainfall data from your grid. PRF is available in Minnesota, North Dakota, South Dakota, and Wisconsin. Coverage levels range from 70 to 90%. 

PRF is different than most multi-peril coverage in that crop production is not used in calculating indemnity payments. Indemnity payments are eligible when the final precipitation for the insurance period is less than the expected precipitation on the grid that the insured has chosen. Another distinction between PRF and other insurance options is that you do not need to insure every acre of land. You can pick and choose what you want to cover.

AgCountry partners with Watts and Associates to give us special tools to look at data and provide better recommendations for our producers. If you are interested in exploring or purchasing PRF for your farm, contact your local insurance specialist and ask them to look at PRF in our exclusive Optimum tool. With Optimum, we can look at your specific grid or grids and look back through the years to find which months would best suit you to insure. Optimum also has indemnity calculators that are fantastic to play around with and test different situations. This tool can assist you in making a sound decision so be sure to ask about it.

The sales closing date for PRF is December 1. Give your specialist a call and have them run you a quote or set up a time to meet with you and give you a more in-depth overview of PRF. There is a lot that still needs to get done this year before the snow starts falling, but it’s never too early to plan for next year.

Written By: AJ Hogenson
Insurance Specialist