2014 Farm Bill provides Livestock Forage Disaster Program (LFP)

2014 Farm Bill provides Livestock Forage Disaster Program (LFP)

The Agricultural Act of 2014 (2014 Farm Bill) makes the Livestock Forage Disaster Program (LFP) a permanent program and provides retroactive authority to cover eligible losses back to October 1, 2011.

LFP provides compensation to eligible livestock producers that have suffered grazing losses for covered livestock on land that is native or improved pastureland with permanent vegetative cover or is planted specifically for grazing. The grazing losses must be due to a qualifying drought condition during the normal grazing period for the county.

LFP also provides compensation to eligible livestock producers that have suffered grazing losses on rangeland managed by a Federal agency if the eligible livestock producer is prohibited by the Federal agency from grazing the normal permitted livestock on the managed rangeland due to a qualifying fire. The grazing losses must have occurred on or after October 1, 2011. LFP is administered by the Farm Service Agency (FSA) of the U.S. Department of Agriculture.

Eligibility

Livestock producers that own or lease grazing land or pastureland physically located in a county rated by the U.S. Drought Monitor as severe drought (D2), extreme drought (D3), or exceptional drought (D4) may be eligible for LFP.

• Producers are eligible to receive assistance in an amount equal to one monthly payment if any area of the county had a severe drought rating for at least eight consecutive weeks during the normal grazing period.
• Producers are eligible to receive assistance in an amount equal to three monthly payments if any area of the county had an extreme drought rating at any time during the normal grazing period.
• Producers are eligible to receive assistance in an amount equal to four monthly payments if any area of the county had an extreme drought rating for at least four weeks during the normal grazing period or if any area of the county had an exceptional drought rating at any time during the grazing season.
• Producers are eligible to receive assistance in an amount equal to five monthly payments if any area of the county had an exceptional drought rating for at least four weeks during the normal grazing period.

A map of eligible counties for LFP drought is available at http://disaster.fsa.usda.gov.

Rates & Payments

Payment rates vary by species and year, and they also vary by cause of loss.

FSA will calculate LFP payments for an eligible livestock producer for grazing losses due to qualifying drought equal to 1, 3, 4 or 5 times the LFP monthly payment rate. Eligible livestock producers in qualifying counties will receive 60 percent of the monthly payment rate as calculated by the FSA.

Eligible livestock producers who sold or otherwise disposed of livestock because of drought conditions in one or both of the two previous production years immediately preceding the current production year will receive 80 percent of the monthly payment rate.

Eligible livestock producers who suffered losses because of a qualifying fire on Federally managed rangeland for which the producer is prohibited from grazing the normally permitted livestock will receive 50 percent of the monthly payment rate.

The following is a hypothetical payment calculation for an eligible rancher who owns and grazed 400 mature cows and 100 yearlings in a county with an exceptional drought rating for one week during each of the 2012 and 2013 summer grazing seasons.

Producers are limited to $125,000 in payments per producer per year.  Also, producers are ineligible if their individual or entity’s average Adjusted Gross Income exceeds $900,000.

For complete LFP eligibility requirements, producers are encouraged to visit their county Farm Service Agency office. Additional risk management tools and programs are available through the USDA’s Risk Management Agency (RMA). Visit the RMA website (www.RMA.USDA.gov) to find many useful tools, including premium calculators, extensive program descriptions, and a variety of educational materials.

Federal crop insurance program policies are sold and serviced by private crop insurance companies.  Custom Ag Solutions works with RMA and other partner organizations to educate Montana producers about risk management and Federal crop insurance programs.  To receive information by mail, call CAS at 877-227-8094.  USDA, RMA, and CAS are equal opportunity providers.