Minding Ag's Business

Financial Aid Mounts for Blizzard Victims

Aid continues to pour in for victims of the Atlas Blizzard that struck western South Dakota in early October. The South Dakota Cattlemen's Association is discouraging immediate donations of live animals, given that ranchers are struggling with cleanup operations in addition to normal fall roundup and pre-winter operations. Instead, state livestock groups have teamed up to create a Ranchers Relief Fund. Tonight on an Agchat Tweetcast at 8 pm central time on a Twitter, Tyson foods is donating $10 for every Tweet up to $50,000. The CHS Foundation also donated $100,000 for the fund and other agribusiness leaders promise to follow suit.

While livestock damages are still being tallied, official estimates put storm deaths somewhere between 15,000 and 30,000 head of cattle. That's far lower than early estimates of as many as 100,000 animals lost. Some veterinarians think numbers could mount and livestock groups say ranchers are still hunting for lost animals. "Right now any estimate you get is an educated guess," said Jodie Anderson, executive director of the South Dakota Cattlemen's Association.

Anderson's father still is missing 10 calves, but they could be on neighbors land and eventually be found. On the other hand, she's seen loss reports of anywhere from 5% to 95% of individual herds. There are multiple cases of 100 or 200 head walking off a cliff or a river bank and perishing en masse, Anderson said.

Real damage to South Dakota's cow-calf industry in the freak Oct. 4 blizzard are emotional as well as financial, lenders say, and they are trying to balance serving both.

"Recovery is not just as easy as buying more cows, even if the finances are there," Farm Credit Services of America CEO Doug Stark emphasized in a phone interview with DTN. For many ranching families, the genetics of their herds represent generations of work, so family identities and animal lineage are intertwined, adds Stark.

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The co-op lender is mobilizing resources to help producers in the 11 counties served by its Rapid City office where it has $170 million of loans to cattle producers. Not all of Farm Credit's 750 cattle customers in that area experienced losses, however the damage also affected parts of northwest Nebraska and "a touch" of Wyoming, Stark says.

"Most cattlemen in that area were within 30 days of weaning this season's calves and sending them to market, so they lost not just this year's production, they've lost their factory" for future production, Stark says.

To ease some of the burden, Farm Credit can offer customers extended maturities on operating loans which are normally renewed in December and January. Blizzard victims may also qualify for a deferral or reamortization of principal and interest on their land notes.

"I can't imagine local lenders won't have the same compassion we've articulated toward customers," Farm Credit's Stark says.

Consequences for the livestock industry are far more dire than when natural disasters strike corn or soybeans, however. "This is different than a crop loss in Iowa. They don't have crop insurance. They can't just start over like normal next year. It takes two years to get a calf crop back on the ground," he adds. "Recovery takes time."

What's more, there's no such thing as federal aid to get livestock operators back and running at the moment. All federal livestock assistance programs expired in September 2011. Texas cattlemen are still carrying losses from herd liquidation due to 2012's severe heat and drought. Montana ranchers also are waiting for reauthorization to qualify for animals lost in the state's extreme wildfire season in 2012.

In the past, USDA's long-standing Livestock Indemnity Program (LIP) has traditionally compensated natural disaster victims 75% of the average fair market value of animals lost in droughts, wildfires and blizzards, subject to various payment limits and adjusted gross income limits on eligibility. Other programs offered temporary assistance for extra feed costs and low-cost loans for herd rebuilding.

Both versions of the pending House and Senate farm bills include retroactive disaster coverage for livestock producers, but the details have yet to be finalized. Payment limits remain unresolved and the Senate's version compensates LIP payments at 65% of fair market, versus 75% in the House, Anderson says.

Farm Credit's Stark, a long-time crop insurance supporter, thinks livestock producers need that federal relief. "It would be incredibly beneficial if there was some way to recapitalize ranchers and restock these herds without a large financial burden," says Stark. "Lenders can do a lot, but there's no way we can bring those cows back to life."

Find information on the Rancher Relief Fund at http://sdcattlemen.org/…

If you want to join tonight's Tweetcast, go to http://n5t.co/…

Follow Marcia Taylor on Twitter@MarciaZTaylor.

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