Ranching takes planning, especially when it comes to managing rainfall and forage production. Thatโs why many producers turn to Pasture, Rangeland, Forage (PRF) insurance to protect their operation and strengthen long-term success.
At Precision Risk Management (PRM), we help ranchers across the Plains use PRF insurance to build more financially resilient operations. The program pays you automatically when rainfall in your selected grid and intervals falls below average. But the real value lies in what that PRF loss payment allows you to do next.
Here are three real-world ways ranchers use PRF payments to cover costs and strengthen their operation as part of a responsible risk management strategy:
1. Buy hay or feed without borrowing or dipping into working capital
When rainfall is scarce and forage growth falls short, your cattle still need feed. And that feed often isnโt coming from your own acres. When PRF loss payments trigger, you can utilize those funds to buy hay or supplemental feed when you need it without tapping into your operating loan or waiting on financing. You have spent years building your working capital. Your PRF policy works to maintain that working capital.
PRF loss payments gives more flexibility and less financial strain during critical times of the year.
2. Build long-term hay reserves using PRF payments
Hereโs where looking ahead keeps your operation strong long-term. Because PRF insurance is based on rainfall intervals, not your actual production, itโs possible to receive an indemnity payment even in years where you donโt need to seek out supplemental feed sources.
Some ranchers use those funds to buy additional hay when the market is flush and prices are lower, building reserves for future years. That way, when the next dry year comes around, the rancher already has this seasonโs feed on-hand without needing to pay for elevated hay costs.
PRF becomes a long-term planning and risk management tool preparing you for years that might not go your way.
3. Pay down debt or build working capital
When PRF loss payments come in during key intervals, and your immediate forage needs are covered, many ranchers look to shore up their balance sheet.
Utilizing PRF loss payments to cover other expenses in addition to your operationโs immediate feed needs. Reducing short-term interest payments frees up cash flow for other parts of the operation. Some ranchers use it to pay down lines of credit before the next production cycle. Others chip away at equipment notes, operating loans, or build up the working capital that you have already created.
Less debt on the books means more flexibility when itโs time to make decisions, whether thatโs buying feed, upgrading equipment, or handling the next challenge that comes your way.
Why PRF Coverage Matters
Every ranching operation is different and so is every yearโs weather. Thatโs why PRF is designed to be flexible. You choose the grids and months that matter most to your operation, and you get paid automatically when precipitation is below the average.
There are no adjusters. No inspections. Just a straightforward, risk management tool to help manage risk and cover costs when it counts. Itโs one of the easiest protection tools out there. You can learn more about it here.
Want to see if PRF insurance fits your ranch?
Contact Precision Risk Management for a personalized grid analysis. Weโll help you evaluate how PRF insurance and PRF payments can work as part of your broader risk management strategy and whether it makes sense for your operation.
