Economic Tidbits

Livestock Indemnity Program Can Help

The Livestock Indemnity Program (LIP) administered by the USDA Farm Service Agency (FSA), can provide compensation to offset the abnormal death losses experienced this year. In a recent BeefWatch piece, Jay Parsons and Aaron Berger of the University of Nebraska Extension Service give an example of how LIP can assist producers. Parsons and Berger use an example of a beef producer with 400 pregnant cows. The producer could expect to lose 5 cows and 20 calves in a typical year. This year, due to adverse weather conditions, the producer loses 7 cows and 32 calves. Under LIP, the producer could receive compensation for 12 calves and 2 cows, losses over and above what is considered normal. Parson and Berger calculate the producer, based on 2018 payment rates, could receive $983.90 for each cow, and $468.92 for each calf lost, roughly 40 percent of the value of the calf.

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