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This presentation will show how Pasture, Range, and Forage Insurance (PRFI) can be used reduce stocking rates, improve flexibility and increase income. The prudent ranch manager will stock their pastures and manage their ranch for the median rainfall and insure for the average rainfall. Four decisions namely: 1) number of acres; 2) coverage level or the percentage of the long-term annual rainfall; 3) protection factor or the productivity of the insured acres relative to the county average; and 4) the 2-month intervals to take insurance on, must be made and within each of the decisions there are many levels to choose, which can make the initial decision process rather complicated. Based on the last 3 factors above, the different levels that can be selected for each, and the interactions between them there are over 2.7 million different ways PRFI can be taken for a grid. Over the long-term maximizing the coverage level and the protection factor will maximum net return, it will also maximize the loss in any interval that receives rainfall in excess of the selected coverage level. The best strategy for distributing coverage across intervals is, to base decisions on the most current long-term weather forecasts available prior to taking out the insurance and on the historic indexes for previous similar situations relative to the projected condition of the Oceanic Niño Index. A strategy of reducing stocking rates to a level that is sustainable except for the most severe droughts, using PRFI to offset lost income and using stockers to pay premiums in above average years can increase income and improve rangelands. Alternatively, in above average rainfall years the additional forage can be used for range improvement with prescribed fire, which is cheaper than other range improvement practices, will offset the price of the PRFI premium.