Managing through Drought with the Livestock Forage Disaster Program

Production agriculture is an inherently risky business. For livestock producers in particular, drought is one of the most common disasters they face. While the Livestock Forage Disaster Program (LFP) was permanently funded by Congress in the 2014 Farm Bill to help livestock producers manage these risks, producers still face a number of management decisions that impact their bottom line. In this study, we examine the interaction between LFP and various alternative management strategies using simulation analysis. We find that LFP does not fully offset the losses incurred due to drought—regardless of management strategy—particularly in the case of longer term drought.