Cattle groups request update to LIP program

The Tri-State Livestock News readership area was hit with back to back April blizzards, causing higher than usual death loss in spring calves. Carrie Stadheim
Tri-State Livestock News

The Independent Beef Association of North Dakota and the North Dakota Stockmen’s Association say USDA’s LIP program was better in 2019. The program was changed in 2020, and the groups say this change is hurting North Dakota producers.

I-BAND doesn’t believe the potential compensation ranchers could get through USDA’s Livestock Indemnity Program (LIP) is enough to make up for the losses ranchers endured in two back-to-back April blizzards, especially in the face of low cattle markets, severe drought, extremely high hay prices and more challenges.

IBAND Director JW Froelich of Selfridge, North Dakota, said the current rate of $175.27 for a calf weighing under 250 pounds will not come close to making up for the expense a rancher has into the cow at calving time. Nor will it compensate for what that calf would have been worth on sale day. Through 2019, all calves under 400 pounds were valued the same. In 2020, USDA updated the program to add a category for calves 250 pounds and less, with a signifcantly smaller value being placed on them. The $175.27 is supposed to represent 75 percent of the value of a calf weighing 250 pounds or less.

Froelich said IBAND has talked to both North Dakota Senators and they also sent a letter to the state Farm Service Agency office asking for support to update the LIP program to more accurately reflect the value of a calf. Froelich said the state FSA office supported I-BAND’s requests and has contacted USDA asking for changes to be made.

Froelich also pointed out that calves that die from pneumonia, scours or enterotoxemia/overeating as a result of the storm are not covered by the LIP program either.

“Our I-BAND Board sent a letter to the state office, and the state office has supported it, asking for calves that die of those illnesses to be covered,” he said.

Froelich said his death loss on his ranch wasn’t as high, percentage-wise as some others. He’s concerned about ranchers he’s heard of who may have lost up to 1/3 of their calves. In one instance, he believes a calf shelter was drifted under, causing calves to suffocate. All of these situations are highly unusual in mid to late April.

The North Dakota Stockmen’s Association also asked for updates to the LIP program. “As producers have analyzed the program payment rates, they have been disappointed to learn especially about the value allotted for calves under 250 pounds,” said their president Jeff Schafer in a letter to the state FSA office.

NDSA said their research showed that bottle calves for sale at that very time were worth significantly more than the $175.27 available through LIP. “Prices (on ‘Bottle calves of North Dakota’) range from $250 to $500, with an average of $392.86,” he said, adding that the market value of that calf on sale day will be significantly higher yet.

Death from weather-related illnesses that occur after the fact should also be covered, said Schafer in his letter.

Wanda Braton, the Conservation Livestock Program Director for the North Dakota Farm Service Agency said the North Dakota FSA state executive director sent a letter on behalf of the acting state FSA Committee, asking for these same updates to be made.

“We asked them to consider the removal of the new category for payment rates. Basically we asked that the non adult beef, less than 250 pounds category be removed, and that all non-adult beef (calves) less than 400 pounds be considered in a payment category. Currently that payment rate is set at $474.38.

Braton said the state FSA believes this change needs to happen in order to align the compensation rates with fair market value.

“We understand we have a lot of producers in North Dakota that have had catastrophic losses. That’s one of the reasons we’re making these proposals,” she said.

Braton also said that the state FSA also asked for the LIP program to cover death due to certain diseases such as pneumonia which has been prevalent after the two recent April blizzards.

As of now, the requested changes to the LIP program have not been made, said Braton.

The Tri-State Livestock News readership area was hit with back to back April blizzards, causing higher than usual death loss in spring calves. Carrie Stadheim
Tri-State Livestock News

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