Posted 12/21/2020

North Dakota Stockmen’s Association Member Update: Dec. 21, 2020

The North Dakota Stockmen’s Association (NDSA) is proud to be the voice of the state’s beef cattle producers. Here are a few things you should know:

NDSA flags concerns about proposed PRF changes

The Pasture, Rangeland, Forage (PRF) Rainfall Index Crop Insurance Program is an important risk management tool for livestock producers in the state and across the country, but proposed changes to the program would diminish its meaningfulness, limit program accessibility and curb participation. That’s the message NDSA President Jeff Schafer delivered to the Risk Management Agency (RMA) in formal comments this morning.

“Our organization wants to ensure that qualifying producers are eligible to receive the maximum available benefit from the PRF program without having to unnecessarily navigate burdensome procedural requirements,” the New Rockford cattleman explained. “We are concerned that the alternatives could have deleterious consequences to producers and, so, need to be reconsidered and/or more robustly vetted before RMA adopts these sweeping changes.”

RMA has proposed six PRF alternative recommendations. Following are the NDSA’s comments on each recommendation:

Alternative Recommendation 1: Block Out Winter Intervals

The NDSA is opposed to this overly broad proposal, which would reach beyond its intended outcome and eliminate protection for seasons that are vital for forage growth throughout the year. We firmly disagree with RMA’s statement in the Sept. 21, 2020, report stating, “Currently, a producer can pick intervals in winter months when precipitation has no impact on forage growth.” (Emphasis added.) Cattle producers in our state absolutely rely on winter precipitation for our spring forage growth and, if we don’t receive sufficient winter moisture, our forage the following spring suffers. Multiple U.S. Department of Agriculture (USDA) Agricultural Research Service (ARS) and Society of Range Management studies outline the importance of precipitation throughout the year, including precipitation during the winter or traditionally dormant months. For example, in one USDA ARS study, 34 years of production data was used to determine the influence of spring (April-June) and summer (July-September) temperature and precipitation, as well as prior winter (October-March) and prior growing season precipitation on livestock gains. The results showed that warm, wet springs and wet winters increased production in the mixed grass prairie. This study outlined the precipitation risk to the enterprise in advance of the grazing season. Producers must have the ability to select intervals when precipitation is needed to enable the growth of various types of forage. These intervals may be different from intervals when the forage is above ground, when cattle are grazing or when the producer is baling hay. Lack of winter precipitation means a producer may not have adequate forage for grazing livestock and hay harvest, may be forced to stockpile forage for late fall or winter grazing and/or must plan for persistence of current drought conditions to extend into the next growing season.

Alternative Recommendation 2: Lengthen the Intervals

We appreciate the concern identified regarding one significant rainfall on one day impacting an entire two-month interval and how that could cause an otherwise qualified producer from receiving an indemnity. However, we disagree that lengthening the interval is the best way to tackle that problem. In fact, lengthening the interval would have the opposite effect, meaning that a single rain event could, from a technical perspective, undo an entire season of drought. Obviously, one “gully washer” cannot produce the same quality of forage as regular, intermittent precipitation. A better approach, we suggest, would be to shorten the intervals. Otherwise, if the entire interval is abnormally dry except for one event, four months would be cancelled out by one event. A producer would rather have a one-month interval cancelled, not four months, and this would be more indicative of actual forage growth conditions.

Alternative Recommendation 3: Factoring in Livestock Numbers

This alternative may have the most detrimental impacts to the PRF program of any. One of PRF’s pluses is that it does not have an onerous paperwork burden. Adopting this recommendation is likely to change that, plus create the opportunity for program abuse programmatically and on the ground. This change could encourage deliberate overgrazing and penalize producers who implement responsible risk management strategies of decreasing stocking rates in response to drought conditions or prior-year drought conditions. We have many questions about how this would work. Among them: How would RMA calculate the number of head vs. acres for producers who utilize intensive grazing and move cattle daily or even multiple times a day? How would RMA calculate all the various rotational grazing practices, short-season grazing and periodic drylotting at various times? Is RMA proposing to determine the nutritional requirements for various livestock species and the needs for various enterprises and breeds, as the forage requirements, for example, would be different for a dry cow vs. a cow nursing a calf, steers vs. heifers, Lowlines vs. Chianinas, etc.? Would producers who “short” stock be negatively impacted for using this ranching practice? The suggestion of a minimum number of livestock requirement would further complicate the program. The example given may be a good rule of thumb for a 1,200-pound cow, but it is not necessarily applicable to other classes, species or mixes of species. Adopting this recommendation would also require a very detailed livestock accounting system and tremendous administrative burden for RMA. Further questions would arise in addressing how long a producer must own the animals, as just one example. For instance, if a producer buys 1,000 head and sells them the next day, would he or she have the same insurance eligibility as someone who has that number of head but maintains ownership continuously? The PRF program was developed as a forage risk management tool and should stay focused on that instead of animal numbers.

Alternative Recommendation 4: Weighted County Base Values (CBV) by Intervals

Put another way, this alternative proposes to cap an interval’s value based on the relative amount of precipitation it receives as compared to the yearly average. We disagree with this approach, as it would be like saying that any crop growth is directly correlated to when normal rains fall. While the amounts may vary and are important, the timing of rainfall is more critical than the amount. It would be like saying that for a crop, the precipitation needed in August is worth 50 percent of the crop value, because that is the month you receive 50 percent of your precipitation. In fact, that month may not be important at all, but the 20 percent of your annual precipitation received in the January-February interval is critical for moisture prior to planting. With various forages, the result would be no different than other winter or spring crops. The current design of the PRF program allows a producer to weigh the precipitation based on their various forage species. A forage producer will have many forage species they are insuring and likely will need most, if not all, the months insured. This alternative also is contradictory to RMA’s alternative recommendation suggesting that winter or dormant season rainfall be eliminated.

Alternative Recommendation 5: Move the PRF Sales Closing Date

The NDSA could support RMA moving the PRF sales closing date to Dec. 1. This may be helpful to producers who are being asked to sign up during one of the busiest times of the year.

Alternative Recommendation 6: Utilize Smaller Grid Sizes

This recommendation seeks to improve the accuracy of eligibility determinations. We would generally support the efforts to increase the program’s precision, but reducing the grid sizes alone does not accomplish RMA’s goal if there is no improvement to the data it is benchmarked against and there are no additional weather stations added. Therefore, this recommendation should not be adopted as presented.

“The PRF program is one of only a very few risk management tools available to livestock producers,” Schafer said. “It is important not to make sweeping, deleterious changes to the program that has proven effective. It is important that RMA remembers that forage crops are very different than traditionally monocultured crops. They are dynamic and require unique considerations.”

RMA is accepting comments through today for consideration as it contemplates possible changes to the PRF program for the 2022 crop year. Want to weigh in individually too? If so, send your comments to rma.kcviri@usda.gov.

Brand renewal deadline approaches

Dec. 31 is the deadline to renew North Dakota livestock brands. Current brandowners should have received notices in August and, if not renewed before, again in mid-November. If you have questions about completing the form, call the NDSA at (701) 223-2522. The office at 407 S. 2^nd St., Bismarck, ND, is open from 8 a.m. to 5 p.m. CT, Monday through Friday, except this week, when the office will be closed Dec. 24-25 for the Christmas holiday.

Merry Christmas from the NDSA

The staff and volunteer leaders of the NDSA want to wish you and your family a very Merry Christmas. The headquarters office will be closed Dec. 24-25 to allow our employees to celebrate the holiday with their families.