Pasture, Rangeland, Forage (PRF) insurance insures against lack of rainfall for perennial grazing or haying acres. In part, the program was designed to help ranchers pay feed bills during periods of below average rainfall.

NOAA has maintained a regionalized grid of both average and recorded rainfall since 1948. Claims occur when recorded rainfall falls below the historical average, as measured in up to eleven, two-month periods throughout the year. These claims are generally calculated and paid within 65 days of the end of each two-month period. This immediate relief helps cover increasing feed costs throughout the year.

Who should have this coverage?

PRF is available to ranchers who own or lease lands for grazing or hay production. To insure lands for grazing purposes, the rancher must have a share in the livestock residing on the ranch.

USDA subsidizes between 51% and 59% of the insurance premiums to keep insurance premiums affordable. When ranchers experience a sixty-day period of below average rainfall, the program provides assistance to help pay a feed bill when you have to pay the feed bill. This immediate assistance, not something paid 12-18 months later, has been incredibly important to the success of the program and has helped many ranchers hold herds together.

Coverage and premium can be adjusted to meet your needs and financial budgets.

How does this coverage work?

This program is based on the average rainfall in a given area (a Grid ID) for a period of time (a two-month interval known as an “Index Interval”). To insure your perennially-grown acreage, you indicate the Grid ID your acreage falls within and then choose at least two index intervals important to your growing operation.

If the rainfall in the indicated Grid ID is less than the historical average during a chosen interval, then the insured is entitled to an indemnity payment.

Curious? Find your Grid ID to check out historical rainfall amounts for your acreage.

Learn more about Pasture, Rangeland, Forage on the RMA’s website.

Annual Forage (AF) insurance insures crops against a lack of rainfall for all of a producer’s annually-grown acreage that is produced as feed and fodder for livestock.

It works very similarly to PRF in that you are insuring the growing season (typically six-seven months) against below average precipitation as measured by NOAA.

Because of higher input costs and stocking rates, AF can be insured for much more per acre than native pastures.

Who should have this coverage?

AF is available to farmers and ranchers who plant annual crops used for food or fodder for livestock. Producers will elect by purchasing coverage by July 15th of each year.

The AF program is commonly used by ranchers planting wheat in the fall or haygrazer in the summer for grazing.

How does this coverage work?

This program is based on the average rainfall in a given area (a Grid ID) for a period of time (a two-month interval known as an “Index Interval”). To insure your acreage, you indicate the Grid ID your acreage falls within, specify the crop that was planted, and then choose at least three index intervals important to your growing operation.

With recent changes to the structure of the Annual Forage program, each month is a new growing season. If a crop is planted in September, those acres must be reported by October 1st which would then begin the coverage cycle. However, even if a producer holds an annual forage policy, there is not an obligation to report those acres to be insured. This also gives the producer the opportunity to insure only a portion of the insurable acreage.

If the rainfall in the indicated Grid ID is less than expected during a chosen interval, then the insured is entitled to an indemnity payment.

Curious? Find your Grid ID to check out historical rainfall amounts for your acreage.

Learn more about Annual Forage on the RMA’s website.

Livestock Risk Protection provides protection against price declines for feeder cattle, fed cattle, lamb, and swine. This program is very similar to a “put” in the futures market. Ranchers initially identify the number of calves, expected weights, and the time of the year when calves will be marketed. This information is used to determine an expected commodity price for a given type, weight, and date. If the market falls below the contracted price, the insured will receive a claim for the decrease in value from market expectations. If the market is at or above expectations, the rancher will receive a bill for the price protection.

All claims are based on a change in market conditions. What you sell your calves for, if you sell them at all, has no impact on the claim.

Who should have this coverage?

We have seen unprecedented volatility in commodity markets, often due to uncontrollable, global market conditions and political environments. LRP allows ranchers to hedge a price that will hopefully protect a break-even price or even lock-in a profitable return.

How does this coverage work?

• For Fed Cattle: Beef producers may choose from a variety of coverage levels and insurance periods that correspond with the time your market-weight cattle would normally be sold. (RMA Factsheet)
  
• For Feeder Cattle: Producers may choose from a variety of coverage levels and insurance periods that match the time your feeder cattle would normally be marketed (ownership may be retained). (RMA Factsheet)
• For Lamb: Sheep producers may choose from a variety of coverage levels and insurance periods that match general feeding, production, and marketing practices. (RMA Factsheet)
• For Swine: Pork producers may choose from a variety of coverage levels and insurance periods that match the time your hogs would normally be marketed. (RMA Factsheet)

What coverage options are available to me?

Different number of head, target weight, insured share per commodity and type based upon your desired endorsement length and coverage level.

Livestock Gross Margin (LGM) protects against loss of gross margin (market value of livestock minus feed costs). There are three LGM policy types: for Dairy Cattle, for Swine, or for Cattle.

Who should have this coverage?

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How does this coverage work?

LGM has three different options depending on the commodity you are insuring:

• LGM for Dairy Cattle (LGM-Dairy) uses futures prices for milk and dairy commodities and the amount of covered milk production elected by the dairy producer to determine the expected revenue.

You can sign up for LGM-Dairy 12 times each year and insure all of the milk production that you expect to market over a rolling 11-month insurance period. LGM-Dairy is sold on the last business Friday of each month. (RMA Fact Sheet)

• LGM for Cattle uses futures prices to determine the expected gross margin and the actual gross margin for cattle.

You can sign up for LGM for Cattle 12 times each year and insure all of the cattle they expect to market over a rolling 11-month insurance period. LGM for Cattle is sold on the last business Friday of each month.

• LGM for Swine uses futures prices to determine the expected gross margin and the actual gross margin of your swine.

You can insure the swine you expect to market 12 times each year. Each insurance period is 6 months long and overlaps other insurance periods. Coverage begins 1 month after you buy a policy so coverage is available only for the last 5 months of the period.

What coverage options are available to me?

With each LGM offering, you can choose your deductible, the type of livestock included on the coverage, and number of head insured per month available.