Numerous wildfire events across the State of Texas have unfortunately developed these last months producing many losses to many ranchers. Today we will review one USDA program that supports ranchers that have livestock losses due to wildfires and other weather-related events.
Dates & Deadlines
8/1-3/2022 – Beef Cattle Short Course, College Station
8/10-11/2022 – Texas Animal Manure Management Issues Conference, Fort Worth
8/19-20/2022 – Texas Sheep & Goat Expo, San Angelo
8/26/2022 – Direct Beef Sales Workshop, Brenham
What We’re Reading
Farmers look for late-season planting options – AgriLife Today
Making crop insurance rates more accurate – AgriLife Today
Livestock Indemnity Program Review
During the last few months, we have seen numerous wildfire events across the State of Texas. These wildfires have produced unfortunate losses to many ranchers and farmers. Today we will review one USDA program that supports ranchers that have livestock losses due to wildfires and other weather-related events.
The USDA Livestock Indemnity Program (LIP) benefits livestock producers with a higher than normal death loss rate due to extreme weather events, diseases, and predators introduced by the Federal Government. It also supports producers forced to sell injured livestock at a lower price due to these circumstances.
Who is eligible for LIP?
Any producer who is the legal owner of the animals before the weather event and the losses occur. Death losses must be higher than normal and directly caused by one or more eligible weather events, diseases, or predator attack conditions within this program. This program only benefits those who have livestock for commercial purposes. It does not include animals used for recreational purposes or free-roaming animals.
The following table shows the cattle, poultry, swine, ovine, and other animal categories covered by this program (Table 1).
Table 1: LIP eligible livestock for LIP “(Source: USDA)
Weather events and other eligible loss conditions
As imagined, most eligible conditions listed below can occur in Texas. Wildfires and extreme heat, typical during this drought, are suitable weather event conditions for the program (Table 2). Drought conditions are not eligible for this program unless they are associated with anthrax-eligible disease, a condition that usually occurs during the drought period. USDA has other programs, such as LFP (Livestock Forage Disaster Program), that can support ranchers and farmers after a drought. Losses from predators reintroduced by the federal government can also be eligible for the program.
Table 2. LIP Eligible Weather Conditions
USDA calculates death-loss payments based on the number of livestock dead multiplied by the national payment rate and by the owner’s share of the livestock (Table 3). Similarly, for injured cattle, it calculates the number of injured cattle sold at a lower price, multiplied by the difference between the national payment rate and the marketed value. Producers must provide evidence of the cause and losses that occurred. A good advice is to keep track of all documents that will help you prove the effect of the event, death losses, or the lower prices. The only limitation of this program is for individuals or entities with AGI higher than $900,000 (www.fsa.usda.gov/limits).
LIP calculates the national payment rate based on 75% of the average fair market value of the livestock. For more information on other livestock values covered in this program, please check the USDA factsheet (https://www.fsa.usda.gov/Assets/USDA-FSA-Public/usdafiles/FactSheets/ 2022/fsa_lip_livestockImdemnityprogram_factsheet_2022_final_v3.pdf).
Table 3. 2022 LIP Payments Rates for Eligible Livestock Owners
Let’s look at an example of payments for eligible loss conditions which resulted in death. The following example considers a rancher who wholly owned ten beef cows that died from a wildfire event. The total payment will result in $8,291.80.
Payment = 10 cows * $829.18/cow = $8,291.80
Let’s look at a second example for the same rancher and the number of cows. These cows were injured during the wildfire and thus sold for a lower price. The total payment will result in $1,291.80.
Payment = 10 cows * ($829.18/cow – $700/cow) = 12 cows * $129.18/cow = $1,291.80
Those affected by eligible events should apply through the local FSA office where the loss occurred. An owner or contract grower must file a notice of loss within 30 calendar days of when the loss of livestock is first apparent and file an application for payment within 60 calendar days after the end of the calendar year. Remember that it is critical to document all losses. For more information, please check: https://www.fsa.usda.gov/programs-and-services/disaster-assistance-program/livestock-indemnity/index