October 4, 2023
Drought conditions have expanded significantly across the Southeast over the past few months and have forced tough decisions by producers. Many producers in severe drought areas were forced to start feeding hay much in August or September. This affects producer decisions (and costs) now, but also affects decisions for the winter when hay supplies will be needed by many producers.
I wanted to use this week’s article to discuss some of the forage programs that are available for producers to consider. In particular, I want to focus on the Livestock Forage Disaster Program (commonly called LFP) that is administered by the USDA Farm Service Agency. The goal of this program is to compensate producers for grazing losses during times of drought. LFP is not an insurance program – producers do not have to pay a premium or purchase a policy. Instead, eligibility is based on a producer’s grazing land acreage and the cattle that graze on those acres. If drought conditions reach specific levels or duration, eligible producers who have signed up can receive a payment. A D2 drought that lasts 8 weeks leads to a county being eligible for LFP. Counties with D3 or D4 drought are eligible for larger payments.The table below shows the per-head payment rates which have roughly doubled over the past 5 years. The LFP payment rate for losses due to a qualifying drought is calculated at 60 percent of the payment rate in the table which would be $34.87 per cow. However, the severity of the drought impacts payment too and can lead to the rate being multiplied by 3, 4, or 5 depending on drought level and duration. The number of head will be determined by the lesser value of either the number of head a producer certifies or the normal carrying capacity of the grazing land reported. Cattle that were sold within 60 days before a qualifying drought might also be eligible. Unweaned livestock are not considered a grazing animal and are ineligible for LFP. A link to a LFP factsheet can be found HERE.The eligible counties and pasture types are updated every Thursday when the drought monitor is released. Any county in a D3 or D4 zone on the drought map above has eligibility. As of September 28, there are 44 counties with eligibility in Mississippi, 19 counties in Arkansas, and 6 counties in Alabama. Almost every county in Louisiana has eligibility. Many of these counties are eligible for the increased payment factors due to drought level and duration. A list of eligible counties each week can be accessed HERE.There is a process and paperwork to complete to be eligible BUT it is not too late to sign up for 2023. The first step is to contact your local FSA service center. If you have not submitted an acreage report for 2023, you will need to do that and there will likely be a small late-filing fee since the July 17th acreage report deadline has passed. Your FSA office can then help you with the steps needed to submit a LFP application which must be submitted by January 2024.Another program that gets attention during drought is the Pasture, Rangeland, and Forage (PRF) program. This is a USDA-RMA program. You can click HERE and HERE to read previous newsletters about PRF. This program is often referred to as “rainfall” or “drought” insurance and is triggered by the amount of rainfall received relative to historical averages during months chosen by producers. Importantly, you must sign up for PRF by December 1st of the previous year. The signup for 2023 ended on December 1, 2022. Interested producers have until December 1, 2023 to sign-up for 2024 coverage.Table Source: LFP Factsheet
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