Protecting your business from a lack of precipitation.
Pasture, rangeland, forage insurance for Missouri businesses.
If you have a business that relies on haying and grazing, then you know how important precipitation is for your fields. Yet, weather is a fickle thing and sometimes drops in rainfall and even droughts can occur, directly harming your ability to produce. Taking part in the pasture, rangeland, forage insurance program is a good way to protect yourself from unpredictable weather.
What is the pasture, rangeland, forage insurance program?
The pasture, rangeland, forage insurance program, often abbreviated as PRF, is a federal area-based program that protects perennial pasture, rangeland, or forage used to feed livestock from losses caused by drought and a drop in precipitation needed for the foraging crops. It is managed by the USDA Risk Management Agency and is available in the 48 contiguous states, excepting certain grids that cross international borders.
How does a pasture, rangeland, forage insurance program work?
It begins with something called the Rainfall Index. When you enter into the program, you have to choose at least two 2-month periods, called index intervals, where precipitation is vital to the success of your business. The normal precipitation for the area is calculated using data from NOAA. Deviations from the normal amount are also calculated. If the precipitation falls beneath the expected normal for your grid, a loss payment is triggered.
Some important things to note about pasture, rangeland, forage insurance.
Since this is an area-based coverage, it does not use crop production data or your individual experience to determine payment. It relies solely on the rainfall data from your grid and acreage. You are also able to insure all or part of your acreage, giving you flexibility in your risk management plan. One thing to note with PRF insurance is that because a higher level of forage production is expected for haying land, the premiums may be higher than those for land insured for grazing.
Pasture, rangeland, forage insurance is not drought insurance.
While it is possible that an indemnity payment may be triggered by a declared drought due to a drop in precipitation, PRF insurance is not drought insurance. It doesn’t cover excessive and abnormal heat or wind like drought insurance does. The declaration of drought by a town, county, or state does not automatically trigger a loss payment. Precipitation for your grid must be abnormal during your index intervals for payment to be given.
As a crop-based business, there are other coverages you might want to consider.
If your business relies on other crops, you may want to get a general crop insurance policy that can help protect your other products in the case of damage or loss to your fields. If you make use of pesticides or other chemicals, you will want to look into environmental insurance to provide coverage in the event your business is linked to a spill or contaminant. In general, your business will probably need some basic coverages like general liability and workers’ compensation insurance to keep you protected.
Pasture, rangeland, forage insurance can be a complicated topic, which is why we’re here to help. Contact us today and we’ll help advise on this important coverage.
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