The Livestock Indemnity Program (LIP) and Livestock Forage Disaster Program (LFP) were reauthorized with the passage of the Agricultural Act of 2014 on February 7, 2014. LIP provides a payment to producers who experience excess livestock deaths due to adverse weather, including floods and blizzards. LFP provides a payment for grazing losses due to qualifying drought conditions or on rangeland managed by a Federal Agency if the eligible livestock producer is prohibited by the Federal Agency from grazing the permitted livestock on the managed rangeland due to a qualifying fire.
The Agricultural Act of 2014 established a retroactive date for these programs of October 1, 2011, the day after the 2012 Food and Agriculture Reform and Risk Management Act (FARRM) expired. Thus, it will be possible for livestock producers to receive payments for losses in 2012 and 2013. LIP is of particular interest to South Dakota livestock producers impacted by winter storm Atlas that occurred on October 3-5, 2013. LFP is also of interest to producers that had reduced grazing due to drought in 2012 and 2013.
Summary of Program and Coverage Levels
LIP compensates producers at a rate of 75% of market value of the applicable livestock on the day before the livestock died, as determined by the U.S. Secretary of Agriculture. Eligible livestock includes beef and dairy cattle, sheep, swine, horses, poultry, and bison. For more information about LIP, visit the USDA Livestock Indemnity Program website.
LFP payments are based on drought conditions as defined by the U.S. Drought Monitor. When qualifying drought occurs, the payment rate is equal to 60% of the lesser of the monthly feed cost (up to five months) for covered livestock, owned or leased, or the monthly feed cost calculated by using the normal carrying capacity of the eligible grazing land. For more information about LFP drought qualifications and eligibility, visit the USDA Forage Disaster Program website.
What Does This Mean for South Dakota Producers?
Producers are expected to be able to sign up for LIP or LFP sometime in April 2014 after USDA Farm Service Agency (FSA) develops the rules and regulations for these programs. However, preparation of information expected to be required, and preliminary estimates of LIP and LFP payments, can be made now.
It is expected that FSA will establish values for each class of covered livestock for the LIP program. The classes will likely be the same as those established in the mortality rate table previously created by SD FSA. These mortality rates establish “normal” losses for SD producers under “normal” production cycles. Death losses in excess of normal mortality due to adverse weather and attacks by animals reintroduced into the wild by the Federal Government, including wolves and avian predators that exceed those rates would be considered a qualifying loss for LIP.