Letter to Hon. Zach Ducheneaux, Administrator of the U.S. Department of Agriculture Farm Service Agency - Sen. Cramer Urges USDA to Provide Relief for Livestock Producers, Increase Calf Payment Rate Following North Dakota Winter Storms

Letter

Dear Administrator Ducheneaux,Iwrite to you regarding the recent weather disaster North Dakota suffered from Blizzard Haley and the subsequent snow, ice, rain, and windstorms which resulted in cattle producershavinga number oftheir livestock perish, particularly calves. Thankfully, theU.S. Department of Agriculture'sLivestock Indemnity Program(LIP)is in place to assist producers who had above normal livestock fatalitiesas a direct result ofthe storms. Unfortunately, as producers have familiarized themselves withLIP, they have expressed concerns thepayment rate for calves under 250poundsdoes not accurately compensatethem for the losses they incurred. Understanding LIP payments are based on national payment rates whichare 75% of the fair market value of the applicable livestockas computed using nationwide prices for the previous calendar year, the 2022 LIP Fact Sheet indicates this year'spayment rate per head for non-adult beef cattle weighing less than 250 pounds is roughly $175. According to producers in North Dakota, this figure is significantly lower than 75% of the fair market value for theirlivestock. Currently, non-adult beef cattlein the 250pound weight rangeare trading through local online groups at a price aslow as $250 and as high as $500, with an average price of approximately $393.Multiple local auction markets have corroborated this price range.A $393 figure would yield a payment to the producer of roughly $294per head, a significant increase from the $175 indicated on the fact sheet.Additionally, it ismy understanding the under 250pound category and the 250-399pound category were separated into different groups recently. While understanding program integrity must be maintained, merging the categories again may be beneficial to producers. For determining payment calculations, the 2014 Final Rule for LIP stated, "the payment for livestock owners will continue to be calculated based on 75 percent of the average fair market value of the applicable livestock on the day before the date of death of the livestock, as determined by FSA. When determining the market value of applicable livestock, FSA will establish market values for each type and category of livestock using data from credible livestock markets. Credible livestock markets will include sale barnsand local sales as well as sales at terminal market centers or slaughtering facilities." However, the way payment calculations were determined waschangedin the 2020 Final Ruleto be calculated "using nationwide prices for the previous calendar year unless some other price is approved by the Deputy Administrator."
Because of the emphasis on timely date of death and local market information within the 2014 Final Ruleand the flexibilityfor altering pricesprovided within the 2020 Final Rule, I encourageyou to examine whether the $175 price is accurate and adjust it accordingly in order to provideproducersmore accurate levels of assistanceduring this time. 2021 in North Dakota was a difficult year, especially for ranchers. The state was ravaged by significant drought, producers were forced to procure feed from alternative sources, and,in many instances, theywere forced to cull herds it took them years to build. Now in 2022, producers lost a number of calves and expended significant feed resources tokeep their livestock warm and fed.It is critical these producers receive meaningful relief as soon as possible.For the reasons outlined above, I respectfully request you use the flexibility at your disposal to accuratelycompensateproducers for the livestock they lostand examine whether the weight categories under LIP should be reexamined.I look forward to working with you to ensure North Dakota's producers obtain timely and accurate relief during this strenuous time.Sincerely,

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