Selasco, Eric J.; Hungerford, Ashley E.
Drought represents one of the main risk factors in ranching in the Western United States. To assist in mitigating against the impacts of drought, the pasture, rangeland, and forage (PRF) insurance product was developed by the Risk Management Agency (RMA) and first offered in 2007 as a pilot product. Recent changes to PRF, including (1) increased availability, (2) changing the index from vegetative to rainfall in several states, and (3) updating the prices, have led to an increase in both acreage and participation since 2015. The number of insured acres has increased by 79.7 percent from 54.7 million acres in 2015 to 98.3 million acres1 in 2018. The number of policies sold has also increased from 24,693 in 2015 to 32,761 in 2018, amounting to a 32.7 percent increase. Results demonstrate support for PRF loss ratios being close to RMA objectives, while policy selections have resulted in insured months not always aligning with months where rainfall is critical for forage production.
