Agricultural Economics Department
Date of this Version
12-10-2020
Abstract
Keeping good records is an important risk management tool for agricultural producers. Good records provide accurate, complete and consistent information that leads to better decision making. Good records also keep the farm or ranch operation in a good position to participate in USDA programs when those opportunities are available.
The Livestock Indemnity Program (LIP), one of the USDA disaster assistance programs administered by the Farm Service Agency (FSA), is an example of how good recordkeeping can be rewarded. LIP provides compensation to eligible livestock producers who have suffered livestock death losses in excess of normal mortality due to adverse weather, such as blizzards, floods, extreme heat, extreme cold, wildfires, tornadoes, and lightning. LIP also covers attacks by animals reintroduced into the wild by the federal government or protected by federal law, including wolves and avian predators. Eligible live-stock includes beef cattle, dairy cattle, bison, poultry, sheep, swine, horses, and other livestock as determined by the U.S. Secretary of Agriculture. The LIP payment rates are based on 75 percent of the market value of the livestock.
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