The Livestock Indemnity Program (LIP) was reauthorized, with some amendments, with the passage of the Bipartisan Budget Act of 2018, enacted on February 9, 2018. LIP is designed to provide a payment to livestock owners or contract growers who experience excess livestock deaths due to adverse weather, including winter storms, floods, extreme cold and blizzards, eligible disease and eligible attacks.
Summary of Program and Coverage Levels
LIP compensates producers at a rate of 75% of the market value of the applicable livestock on the day before the livestock died, as determined by the U.S. Secretary of Agriculture. Additionally, an amendment provided compensation for animals injured during a qualified weather event and sold at a reduced price.
Eligible livestock includes various classes of beef and dairy cattle, sheep, goats, swine, horses, poultry, and bison, as well as select other species. Additionally, eligible livestock must be considered as part of the farming operation. Animals produced for non-commercial means; including wild free-roaming animals, pets or animals used for recreational purposes, such as hunting, roping or show, are not covered by LIP.
The livestock owner must have legally owned the livestock on the day the animal died or was injured by an eligible loss condition to qualify for LIP compensation. The death loss must be over normal mortality or injured as a direct result of the qualifying weather event. Contract growers of poultry and swine may also qualify if the animals that died were in the possession and control of the contract grower and a written agreement with stating specific terms, conditions and obligations of the involved parties that were in place with the owner on the day the animals died. Contract growers are not eligible for losses due to injured animals sold at a discount.
The mortality rates listed in Table 1 establish “normal” losses for S.D. producers under “normal” production cycles. Death losses in excess of normal mortality due to adverse weather, eligible disease and attacks by animals reintroduced into the wild by the Federal Government would be considered a qualifying loss for LIP.
|Livestock Description||Weight Range||Mortality Rate|
|Beef-Nonadult||Less than 400 lbs||5.00%|
|Beef-Nonadult||800 lbs or more||1.50%|
|Beef-Adult||Cow or Bull||1.50%|
|Sheep-Rams and Ewes||-||4.00%|
|Goats-bucks and Does||-||5.00%|
|Turkeys-Toms, Fryers, Roasters||-||6.50%|
Similar to crop insurance indemnity payments, the LIP program is not designed to cover all losses, but to help mitigate the financial effect felt by the producer incurring the loss.
Animal inventory records are a requirement to qualify for LIP. Documentation and records should include the quantity of the livestock, its kind/type, and estimated weight of all animals and those injured or killed by the adverse conditions.
Injured animals must sell to an independent third party. Examples of verification for animals injured and sold at a reduced price include, but are not limited to: sales receipts from a livestock auction, sale barn or another similar facility, rendering facility receipts or processing plan receipts. These receipts must include the price the animal sold for, kind, type and weight.
Contact your local FSA office for questions on qualifying documentation. A list of South Dakota offices can be found at the USDA Service Center Locator website. Once there, click "South Dakota" on the map.
Historically, the following types of documentation have been permissible. Producers are encouraged to check with their local office for more information:
- Bank or other loan documents.
- Rendering truck receipts or certificates.
- Written contracts.
- Purchase records.
- Production records,
- Property tax records.
- Brand inspection records.
- Pictures (preferably dated).
- Vaccination records.
- Combination of veterinary records, balance sheets, inventories for tax records, loan records, bank statements, and private insurance documents.
- Third-party certification.
Owners and growers must submit a notice of loss to their local FSA office within 30 calendar days of the loss and make an application for payment within 60 days after the calendar year in which the eligible loss occurred.
The USDA has not released the 2019 LIP payment rates. Once rates are released, producers will be able to file an application for payment. Producers must still file the notice of loss based on the information above.
Producers facing expenses above the normal cost of doing business due to moving snow from feed resources may qualify for financial assistance through the Emergency Assistance for Livestock, Honeybees and Farm-Raised Fish Program (ELAP). These expenses must be related to an eligible weather event. Contact your local FSA office to determine is the expense qualifies for reimbursement.