Nebraska’s congressional delegation today wrote to U.S. Department of Agriculture Secretary Tom Vilsack Wednesday urging him to correct the Farm Service Agency’s method for calculating livestock disaster payments in light of devastating tornadoes in mid-June in Pilger and surrounding areas.
The 2014 farm bill reauthorized the Livestock Indemnity Program to provide relief for producers who sustained livestock deaths as a result of natural disasters.
Producers who lost livestock during the June tornadoes discovered USDA is using outdated data when calculating reimbursement, resulting in reduced payments of up to $330 per head, Johanns said.
The letter urges FSA to use current market values, which more accurately reflects the intent of the 2014 farm bill.
The Agricultural Act of 2014 states that “payments to an eligible producer on a farm… shall be made at a rate of 75 percent of the market value of the applicable livestock on the day before the date of death of the livestock."
The average fair market value of the livestock is computed using nationwide prices for the previous calendar year, unless some other price is approved by the deputy USDA administrator, according to the law, Johanns said.
"It is clearly unfair to producers who expect relief based on the plain language of the law to then find out that the relief received will be significantly less than 75 percent of the market value of their livestock," Johanns said. "For example, according to the LIP fact sheet published by FSA in April, the payment rate for feeder steers weighing 800 pounds or more is $1,149, but data from the Agriculture Marketing Service indicate that 75 percent of the average value of an 800-900 pound steer was approximately $1,278 the week before the tornadoes hit Pilger, a difference of $129 per head."
"Moreover, producers also experienced losses for cattle that were at their finished weight of approximately 1,400 pounds. Using the data from the Agriculture Marketing Service, 75 percent of the average value for a finished steer was $1,479, for a difference of $330 per head," the letter says.