yield protection

what is yield protection?

Imagine the result of a growing season that only gave way to half of the amount of your area’s normal rainfall. Your forage growth is down, but your operating costs have gone up due to your effort to combat the dry spell. This scenario would put many producers in a tough spot and isn’t too far from a reality that nearly all of us in the industry have faced. The question is: how do we obtain protection from lower yields caused by lower rainfall, and what does that yield protection look like for cattle ranchers? 

Luckily, the answer is simple. Yield protection is crop insurance, and the rancher’s crop insurance is Pasture, Rangeland, and Forage (PRF) insurance.

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Rangeland.

PRF is the Rancher’s Yield Protection

The rancher’s crop is forage, which is grown on their pasture and rangeland and then harvested through their livestock. So, how can PRF insurance protect your operation from lower forage yields?

  • PRF is based on yearly rainfall data reported through NOAA and the direct correlation between rainfall and forage yield on your land
  • Less rain equals less forage yield, which can increase your operation’s overhead costs, and decrease your ranch’s profitability
  • With PRF coverage you can receive indemnity payments when rainfall in your area is lower than the 70-year average
  • PRF is self-funding, meaning indemnities will go toward your premium until the balance is paid in full, and any additional payment will go straight to you with nothing out of your pocket!
  • If you do owe your premium, PRF’s USDA subsidy means the US government is responsible for a portion of your payment; you’re not on the hook for the whole thing!

Maximizing Your Yield Protection

However, protecting your operation from lower forage yields with PRF insurance is not quite as simple as blanketing your entire ranch with coverage. With Redd Summit Advisors, you can receive a customized policy that allocates your coverage in a way that maximizes your potential benefit from yield protection.

grid allocation

RSA allocates your coverage into the highest-performing grids so that you have the highest potential for benefit over the lifetime of your policy.

Coverage Interval

Your coverage is customized further by identifying the highest performing intervals to place your coverage to increase your chances of receiving indemnities. With this combination, you can then be assured that the policy that you choose is custom-built to your land with the best grid allocation and coverage interval possible to maximize your potential benefit while minimizing any potential risk to your operation.

The Bottom Line

Graphic of text saying, "Less rain equals less forage yield, which can increase your operation's overhead costs, and consequently decrease your ranch's profitability."

How to Sign Up for Yield Protection Through PRF

Receiving a policy proposal from Redd Summit is actually pretty simple. We just need to know where you operate and how many acres you run on. Contact us or give us a call at (435) 625-1022. Or, fill out our online form to request a quote. 

Even if you are unsure if PRF could benefit your operation, you owe it to yourself and your future success to at least get the numbers and make sure you aren’t leaving money on the table during dry seasons with low forage yield.

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