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Published September 14, 2010, 08:20 AM

Ranchers appeal NASS rangeland insurance data;

GLENDIVE, Mont. — Don Evans isn’t the kind of fellow who gets in the news much. He pretty much minds his own business on his ranch near Glendive, Mont. But he’s pretty angry that the National Agricultural Statistics Service stands alone against several other federal U.S. Department of Agriculture agencies, in estimating his 2008 hay crop at 91 percent normal in 2008, when he probably had a 75 percent to 80 percent loss.

By: Mikkel Pates, Agweek

GLENDIVE, Mont. — Don Evans isn’t the kind of fellow who gets in the news much. He pretty much minds his own business on his ranch near Glendive, Mont. But he’s pretty angry that the National Agricultural Statistics Service stands alone against several other federal U.S. Department of Agriculture agencies, in estimating his 2008 hay crop at 91 percent normal in 2008, when he probably had a 75 percent to 80 percent loss.

About 60 farmers are banding together to appeal a USDA decision they say cost them $10 million to $12 million in a three-county area covering Montana’s Dawson, McCone and Prairie counties. The case involves some 2.1 million acres in the Group Risk Management Rangeland insurance program.

Evans says he should have gotten $20,000 to $25,000. Other ranchers should have gotten up to $100,000 or more.

“I know one producer — a big operator — who had to sell some land because of the losses. With all the extra hay he had to buy, he had to offset that loss,” Evans says.

“We got less than 3 inches of rain, compared to a normal 11,” Evans recalls.

He says that’s a stark contrast. This season, his place has gotten 14 inches of rain and hay crops are running to five bales an acre and 1,200 to 1,400 pounds a bale. This is the best crop since 1978, he says, and the heavy grasshopper population this year isn’t having a huge impact.

No rain till July

In 2008, the area didn’t get rain until July. The Conservation Reserve Program acres were opened for haying. The FSA estimated a 60 percent loss on nonirrigated dryland hay. Some private insurance companies showed more than a 50 percent loss.

“I’d say the 2008 drought was one of the worst since the early 1980s around here,” Evans says. “The county was declared a disaster county because it was so bad. All of the (other) crop insurances paid out because we didn’t have a crop. I carried the pastureland insurance just for occasions like that.”

Evans is 62, the second of seven children who grew up on a ranch, 20 miles north of Glendive. He worked for his parents initially. In the late 1980s, he bought what was known as the Undem Ranch about 10 miles north of Glendive.

“Deeded and leased, there’s about 5,000 acres,” he says, giving a ranch tour with his border collie, Wrangler. “You can see a lot of it a bluff on the toplands.”

“A lot of rough stuff,” he says. “I’d say 80 percent of it is unfarmable land. Twenty percent is hayland and farmed.”

His primary business is commercial cow-calf cattle, but he also farms about 400 acres. He bought the new insurance for hayland as soon as it came into existence.

Evans rented some pasture to get the cows through the summer. He bought hay to start feeding cattle the first week in November because there was no grass. He had to feed them in the spring because there was no grass to turn them out to.

He wasn’t alone.

“That was an awful expense,” he says. “A lot of them people, when they budgeted for hay, they budgeted that money (they’d spent) as something that would be compensated by the hayland insurance. Suddenly, it wasn’t there.”

Evans figures the $20,000 and $25,000 he spent for hay should have been entirely covered by the insurance program.

A lot of other USDA officials chronicled heavy drought losses in 2008.

The Extension Service, the Farm Service Agency — everybody seemed to see there were huge losses. But NASS saw it differently. It did a survey in late summer and came out with an answer in May 2009. The verdict: no payment.

“They said we didn’t have a disaster, when nobody had hardly any hay at all to speak of,” Evans says.

Verna’s views

Verna Baisch has sold crop insurance in Glendive for 35 years. She’s an independent agent, working out of a local bank.

When USDA came out with a “Group Risk Management Rangeland” insurance pilot program in 2004, she hosted educational meetings and brought in company representatives to tell producers what it was all about.

“We were excited about it and thought it was a product the ranchers need, so if you had a dry year, and they had to buy hay, it would give them money to replace the hay they lost from a drought,” she says.

The cost was about 25 cents an acre in premium, and could return $5 per acre if there was a total disaster.

The county was the “area” to determine losses for each policy. It wasn’t ranch-specific.

About 50 percent of the producers in her area initially bought it. She works in five area counties. Since the dust-up with NASS, however, only about 20 percent continued to sign up, which has changed from one pilot program to another. Now, the program is based on rainfall, figured out on a grid — 12 miles by 12 miles. But in 2008, it still was based on NASS county hay estimates.

Others had stayed with the Noninsured crop Disaster Assistance Program policies through the FSA.

“For one thing, it’s less expensive — $250 per county, per entity, per crop.”

But it didn’t pay out as well either.

Then called the GRP (later changed and renamed as PRF “Pasture Rangeland and Forage), the program worked well for a few years. In 2006, Dawson County had a big loss, and the pasture policies paid out “really well.” That’s why it was a surprise in 2008 when they didn’t.

Dawson, McCone and Prairie counties got nothing.

Richland County did, for some reason.

Her own company’s adjusters compared yield data for insured producers on alfalfa in both counties, determining little difference. Their production was zero to 0.3 tons per acre.

Baisch cited Natural Resource Conservation Service estimates of 45 percent losses native grasses as of July 24, 2008, and 55 percent losses on alfalfa hay. Nonirrigated annual forages took a 50 percent loss. Even irrigated grasses suffered a 20 percent loss.

She cited an Aug. 1, report by Dawson County Extension Service estimate that the losses were 60 to 70 percent.

“While grains got a good start, subsequent lack of moisture during the growing season has stunted them to the point that many producers are not going to be able to harvest them in any way but grazing, if these fields have water available,” Bruce Smith said of the report in a letter to the county FSA, suggesting a disaster designation be pursued.

On Jan. 9, the county received a disaster designation. But that didn’t cut it on the rangeland insurance program.

‘I was shocked’

On about May 15, 2008, Baisch received notification from her crop insurance companies that her customers in three counties — McCone, Dawson and Prairie — would not be eligible.

“I was shocked,” she says. “I had to tell them about it. It had just come out of the crop insurance companies, saying who had losses and who didn’t. The sheet said Dawson County wasn’t eligible under ‘GRP Rangeland.’ They were angry.”

“We couldn’t believe it,” Evans says. “Nobody had any hay to speak of in 2008.”

Baisch set up two meetings NASS personnel. She invited the local FSA director. Staffers from Sen. Max Baucus, D-Mont., were there as well as Sen. Jon Tester, D-Mont., and Rep. Rep. Denny Rehberg, R-Mont.

Steven J. Anderson, the state NASS director came, but stood by his survey.

Agweek asked Anderson why the NASS survey is so different than the other agencies.

“You’ll have to ask the other agencies how they go about what they do,” he says.

NASS conducts the hay survey the same way every year, he says. It asks producers how many acres of alfalfa and alfalfa mix were cut for dry hay — irrigated and nonirrigated. It goes on to ask about all other hay, and some minor classes, including CRP hay.

“This is a standard thing, done not only in Montana, but in North Dakota and across the country,” he says.

Based on the questions from producers, his staff conducted a review of the data. And then, after that review in Montana, “we determined not to change anything,” Anderson says.

“There were further requests, so we sent the data set to our statistics division of our crops branch in Washington, D.C., and they determined no change should be made to NASS hay data,” he says.

Agency that counts

Still, it is curious why the NASS figures were different than others.

Evans says he’d bet that not a single rancher in the counties covered had a 91 percent normal hay crop in 2008.

When confronted with FSA numbers that show how bad dryland forage production was in Dawson and Richland counties, it has no impact, Baich says. “They just don’t say anything,” she says.

The last meeting the group had on April 20 was a phone conference at the Yellowstone Inn in Glendive. The group pitched in 15 cents an acre for up-front legal costs. Rehberg’s office had suggested they contact Sarah Vogel Law Firm in Bismarck, N.D., to launch a collective organized appeal. The group picked some team leaders, who meet whenever something happens.

The ranchers have tried to brainstorm about what could have gone wrong with the NASS numbers. They wonder if the CRP hay may have thrown the numbers off, or if they included people cutting oats and barley to hay it.

They wonder if the surveyors recorded the yields on small numbers of acres than were harvested, but didn’t include that many more acres were abandoned.

“We have questions, no answers,” Baisch says.

Evans is optimistic about getting a good outcome in the case, if the ranchers get attention at the national level.

“I think they know they’re wrong, but they’re just saying they’re not going to change anything,” Evans says. “I’d almost bet they know what they did wrong and they’re not going to admit it.”