USDA increases cattle loss payments
The U.S. Department of Agriculture on Wednesday, July 20, 2022, changed the formula for disaster payments for above-normal livestock losses to reflect truer values of baby calves and other animals, in the wake of the April 2022 “Blizzard Haley” storm complex that hit North Dakota. The previous administration had administratively in 2020 added a "bottom-tier" of payment for baby calves that undervalued the animals.
WASHINGTON, D.C. — The U.S. Department of Agriculture on July 20, 2022, revised the payment rate for Livestock Indemnity Program, nearly tripling compensation for young calves lost in the April 2022 blizzards in western North Dakota and elsewhere.
Storms killed so-far untallied “thousands” of cattle across the state, said the North Dakota Stockmen’s Association, which was instrumental in writing the changes that were approved. Final reporting on losses won’t be known until March 1, 2023. The program also covers bison and other species. The Independent Beef Association of North Dakota and the North Dakota Farmers Union also supported the formula changes.
U.S. Sens. John Hoeven and Kevin Cramer, both Republicans from North Dakota, were among congressional members supporting the changes.
Many North Dakota cattle producers were at the peak of their calving season and newborn calves were vulnerable, said Julie Elllingson, NDSA’s executive vice president.
LIP program payments, distributed through the USDA’s Farm Service Agency, are to be based on 75% of the “average fair market value” for livestock categories. The change will be most significant for young calf losses.
2020 bottom tier
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The change removes a bottom tier in the payment formula for calves less than 250 pounds that had been put in place in 2020, during the Trump administration. Marcy Svenningsen, FSA North Dakota state executive director, said she didn’t know why the previous administration put the 250 pound and less bottom tier in the formula in the first place, as few beef calves are ever marketed at that weight.
Until the July 20 revisions, however, the value assigned to young beef calves 250 pounds or less was $175 per head, representing a market value of $233, and now is for all animals up to 399 pounds, at $475 per head, representing a market value of about $632.
The NDSA contributed results of their own research that showed the actual value of the young calves at the time of the storm was a “mere fraction” of the actual losses at the time of the storms. Within days of the disaster, the NDSA had direct contact with nearly 900 North Dakota ranch families. The organization has 3,100 members.
The NDSA survey of sale barn and private treaty sales showed actual calf price sales for the period at just under $400 per animal during the relevant period, but those are state figures and the program is national.
“Oh wow, that’s awesome,” said Lacey Maier of New Salem, North Dakota, who ranches with her father, Greg, and a sister and brother.
Maier Ranch, which was featured in an Agweek cover story on the blizzard and LIP formula inadequacies, said the family lost more than 40 calves, compared to a normal of roughly 15 in a season with the drought-reduced herd of about 300 cows.
“That’ll definitely help make ends meet. It’s better than a complete loss,” Maier said.
The FSA’s revised values for beef cattle are: adult bull, $1,077.94; adult cow, $829.18; all calves up to 399 pounds, $474.38; non-adult cattle 400 to 799 pounds $661.32; and non-adult cattle 800 pounds or more, $1,102.20.
Jeff Schafer of New Rockford, NDSA president, thanked Svenningsen, who used the organization’s data in a 38-page request for the changes, as well as Hoeven and Cramer, for their advocacy in congressional hearings and correspondence.
“Blizzard and the encore weather disaster the week after took a major toll on our state’s cattle herds,” Schafer said. “While the disaster program doesn’t bring back the animals nor the generations of hard work, selection and breeding that were lost, it will help producers recover after these catastrophic storms, which came on the heels of record-setting drought. The revised value is much more accurate and reflective of real-life pricing.”
Hoeven said LIP applications that were already paid in 2022 will be recalculated to include updated amounts. Svenningsen said a “very small” number had previously applied. “County offices are not even encouraging people to come in yet” to apply for actual losses, in part because of the season for reporting crop acreage acreage.
2,119 farms, ranches
Svenningsen said 2,119 cattle operations made a “notice of loss” but the bulk have not made the actual reports, which must be made before March 1, 2023. Losses can include those from excessive heat during the summer of 2022, as well. Veterinarians must sign off on losses due to disease.
Hoeven thanked U.S. Agriculture Secretary Tom Vilsack, originally from Iowa, and FSA Administrator Zach Ducheneaux, from South Dakota, for updating the formulas. Both, as well as Svenningsen, are political appointees in the Democratic administration of President Joe Biden.
Hoeven noted the change “builds upon” prior changes under the Emergency Livestock Relief Program to address the impacts on livestock relief grazing due to the 2021 drought. That paid about $68 million in North Dakota. Cramer called the changes a “better reflection of the fair market value” of lost animals and said he was grateful for FSA action, which came three months after the storm.