Livestock Forage Disaster Program A Disaster For Taxpayers

Ranchers in the desert Southwest have received large subsidies from the USDA’s Livestock Forage Disaster Program (LFP) which have perpetuated unsustainable ranching on arid public land administered by the Bureau Land Management (BLM) and Forest Service.

Congress created the LFP in the 2008 Farm Bill to establish a permanent drought assistance program to replace the previous ad hoc drought programs administered by the USDA’s Farm Service Agency (FSA). The LFP was initially authorized from 2008 through 2011, but the 2014 Farm Bill made it permanent and authorized retroactive LFP payments back to 2011. This legislation also raised the maximum annual payment per person from $100,000 to $125,000 per year, and the maximum annual adjusted gross income (AGI) per person from $500,000 to $900,00.

Arizona drought history 2000-2020
(www.drought.gov/drought/states/arizona)

LFP payments are awarded to ranchers grazing private or public land by local FSA offices in counties where, according to the U.S. Drought Monitor, there’s severe, extreme, or exceptional drought. Also, ranchers can receive LFP payments when they are prohibited from grazing a public land grazing allotment that was been recently burned by a wildfire.

Calculating LFP Payments

The amount of LFP money public land ranchers can receive annually is calculated using very complicated rules. The payments are 60% of the lesser of either the monthly feed cost of the livestock owned, or the the monthly feed cost of the ranch’s normal carrying capacity. The compensation rate jumps to 80% if the rancher was forced to sell livestock because of drought.

Verifying the normal carrying capacity of a public land grazing allotment can be problematic since the maximum number of livestock listed on grazing permits is typically higher than the actual numbers being grazed because ranchers typically fight to keep the permitted numbers as high as possible to inflate the real estate values of their ranch base properties. The real numbers being grazed are usually lower because of the realities on the ground.

LFP compensation should obviously be computed using the actual number of cattle that usually graze an allotment when there isn’t a drought.The BLM and Forest Service have some records that help to identify the actual carrying capacities of their allotments. The BLM, for example, requires each grazing permittee to submit an annual Actual Grazing Use Report Form at the end of each grazing season, although this requirement often isn’t enforced. And at the beginning of the grazing season the Forest Service issues each permittee Annual Operating Instructions (AOI) that include the maximum number of livestock authorized to graze the allotment that year, regardless of the number allowed on the allotment’s grazing permit. Both agencies, however, rarely count the actual number of cattle on the land.

As per federal regulation 7 CFR Part 760 Subpart D § 760.306, the FSA is supposed to require LFP applicants to submit “supporting documentation” that’s “determined to be necessary” to verify a drought loss claim. But like the federal land management agencies, the FSA relies mostly upon information that’s provided by the permittees.

2014 LFP Audit

In December 2014 the USDA’s Officer of Inspector General issued Audit Report 03702-0001-32, which was initiated to review the FSA’s administration of the LFP. They found that about 7% of the LFP payments they audited had been improperly issued by local FSA offices, and that the agency had used questionable monthly feed costs to calculate the amounts of LFP payments. An error rate of 7% may not sound too bad, but according the USDA, the FSA issued about $423 million in LFP assistance for FY2018, and 7% of that is about $30 million.

The Inspector General’s report also pointed out that ranchers could receive duplicate compensation for drought losses through the USDA’s Noninsured Crop Disaster Assistance Program (NAP). The NAP provides highly subsidized crop insurance policies to agricultural producers. When precipitation or “vegetation greenness” falls below the coverage level selected in the policy purchased by a rancher, drought compensation payments are issued by the county FSA office. (The Inspector General’s report, however, failed to mention that since 2006 ranchers can also receive assistance to help them build new livestock waters in times of drought through the USDA’s Emergency Conservation Program (ECP).)

LFP Payments Perpetuate Ranching On Arid Public Land

First of all, it’s ridiculous that ranchers who graze their livestock on hot desert land are eligible for any kind of drought relief. Deserts are inherently unsuited for profitable ranching, and arid ecosystems are more susceptible to damage from livestock grazing. Unfortunately, however, livestock grazing is still permitted on most arid public land in the West. For instance, Arizona’s Tonto National Forest includes about 791,284 acres of Sonoran Desert, much of that with active grazing allotments.

Furthermore, the entire Southwest has been suffering from a nearly uninterrupted drought for about the last 20 years, and the last five years have been the hottest five years in history. It’s so bad it’s being called a megadrought, and this aridification trend will likely continue due to ongoing climate change. This means that LFP payments are helping to perpetuate increasingly unsustainable ranching operations. Many recipients have received LFP money for several years, and there’s no limit to the number of years in a row that a rancher can receive up to $125,00 a year in payments.

It would make a lot more sense for Congress to create a fund to fairly compensate public land ranchers that have repeatedly received significant amounts of LFP payments for arid grazing allotments to voluntarily relinquish their grazing permits so that the associated federal grazing allotments can be retired. This would protect these public lands from livestock damage, and U.S. taxpayers wouldn’t have to keep throwing good money after bad.

Arizona Examples

The FSA has disbursed many tens of millions of dollars of LFP payments to ranchers in Arizona. The public land ranches shown below are just a few examples of the Arizona public land ranches where LFP payments have helped to subsidize livestock grazing in desert areas. These examples also show the other government assistance the ranches received.

Government Assistance Program Key
ALLBAWPFEQIPHPCHeritage FundLCCGPLFPLRPPFWPWQIG
AALB - Arizona Livestock Loss Board, Arizona Livestock Loss Board (federal/state)
AWPF - Arizona Water Protection Fund, AWPF Commission (state)
EQIP - Environmental Quality Incentives Program, USDA’s Natural Resources Conservation Service (federal)
The EQIP program absorbed the NRCS Wildlife Habitat Incentives Program (WHIP) after 2014.
HPC - Habitat Partnership Committee, Arizona Game & Fish Commission (state)
Arizona Heritage Fund, Arizona Game & Fish Commission (state)
LCCGP - Livestock & Crop Conservation Program, Arizona Department of Agriculture (state)
Note: Open Space Reserve Grants became LCCGP Grants after 2002.
LFP - Livestock Forage Disaster Program, USDA’s Farm Service Agency (federal)
LRP - Landowner Relations Program, Arizona Game & Fish Department (state)
PFWP - Partners for Fish & Wildlife Program, U.S. Fish & Wildlife Service (federal)
WQIG - Water Quality Improvement Grant, Arizona Department of Environmental Quality (federal/state)
Note: These grants were previously called Section 319 nonpoint source (NPS) water pollution prevention grants.
Anvil RanchA Diamond RanchDeganahl RanchFrancis Creek RanchJeffers RanchMenges RanchesTop Hat Ranch
Anvil Ranch (John F King & Son, Inc.) - Anvil Allotment, State Lease #05-000717
YEARSPROGRAMAMOUNTPROJECT NAME
2005-2020EQIP$347,560
2005LCCGP #05-54$67,610Fencing
2008PFWP$5,100Erosion Control Structures
2011-2021LFP$398,085
2017HPC #16-516*$30,000New Dirt Tanks
2015Heritage Fund$170,000Public Access for 8 Years
2018HPC #17-524$4,000Dirt Tank Maintenance
2018WQIG #20-004**$220,200Mesquite Tree Removal
$1,242,555TOTAL 2005 - 2021
* This grant was shared with the neighboring Santa Margarita Ranch.
** This grant was shared with the neighboring Elkhorn and Santa Margarita ranches.

The Anvil grazing allotment is located in the Sonoran Desert southwest of Tucson and is administered by the BLM’s Tucson Field Office.
A Diamond Ranch (G&H Land & Cattle Co.) - A Diamond Allotment, State Lease #05-003391
YEARSPROGRAMAMOUNTPROJECT NAME
2006-2014EQIP$200,178
2007LCCGP #07-29$61,320Fencing
2009LCCGP #09-39$43,534Enhanced Land Management Plan
2011-2021LFP$345,192
2012HPC #11-508$9,773Solar Livestock Water Pump
$659,997TOTAL 2006-2021
G&H Land & Cattle Co. sold the A Diamond Ranch, with the associated state grazing lease, to ASARCO LLC in August 2019. G&H now subleases the ranch from ASARCO LLC.

The A Diamond grazing allotment is located in the Sonoran Desert along the south bank of the middle Gila River in northern Pinal County and is administered by the BLM’s Tucson Field Office.
DeGanahl Ranch (DeGanahl Cattle Co. LLC) - Aguila & Calhoun Allotments, State Lease #05-001321
YEARSPROGRAMAMOUNTPROJECT NAME
2015-2021LFP$217,559
$217,559TOTAL 2015 - 2021
The Deganahl Ranch is located in the Sonoran Desert west of Wickenburg and its BLM allotments are administered by the BLM’s Hassayampa Field Office.
Francis Creek Ranch (Francis Creek Ranch, LLC) - Francis Creek, Big Sandy, Bagdad, Gray Wash, Greenwood Peak Community, Groom Peak, Byner, Cane Springs Wash, Diamond Joe, Los Molinos, Sandy, Walnut Creek & Loma Linda Allotments, State Lease #05-003387, #05-003173
YEARSPROGRAMAMOUNTPROJECT NAME
2008-2017EQIP$713,235
2011LCCGP #11-57$50,790Windmill & Solar Water Pump
2012Heritage Fund$80,000Public Access for 7 Years
2015-2021LFP$541,847
2019Heritage Fund$100,000Public Access for 5 Years
$1,485,872TOTAL 2008 - 2021
The Francis Creek Ranch is located in the desert valley of the Big Sandy River southeast of Kingman and its BLM allotments are administered by the BLM’s Kingman Field Office.
Jeffers Ranch (Jeffers Cattle Co.) - Leroux Wash & Digger Wash Allotments, State Leases #05-000662 & #05-003573
YEARSPROGRAMAMOUNTPROJECT NAME
2011-2020LFP$491,552
2017-2021EQIP$680,958
$1,172,510TOTAL 2011 - 2021
The Jeffers Ranch is located in the high desert of the Colorado Plateau near Holbrook and its BLM allotments are administered by the BLM’s Safford Field Office.
Menges Ranch (Menges Ranches LLC) - Bonita Creek, Johnny Creek, Smuggler Peak, and Zorilla Allotments
YEARSPROGRAMAMOUNTPROJECT NAME
1996AWPF #95-014*$157,223Gila Box RNCA Riparian Fences & Livestock Water
2005 - 2009EQIP$57,239
2005LCCGP #05-70$36,831Livestock Water
2007LCCGP #07-64$36,503Livestock Water
2011-2021LFP$638,740
2017WQIG #19-002$49,580Livestock Water
$976,116TOTAL 1996-2021
* This grant was shared with two neighboring ranches.
The BLM allotments of the Menges Ranches are located in the desert surrounding the BLM’s Gila Box Riparian National Conservation Area, and are administered by the BLM’s Safford Field Office.
Top Hat Ranch (Rudger C. Atkin, Inc.) - Mainstreet, Ivanpah & Little Tank Allotments, State Leases #05-001564 & #05-001487
YEARSPROGRAMAMOUNTPROJECT NAME
2013-2021EQIP$537,761
2018HPC #17-217*$100,000Pumphouse Water Catchment & Pipeline
2018-2021LFP$307,718
2020HPC #19-219*$100,000Pumphouse Water Catchment Redevelopment
$1,045,479TOTAL 2013 - 2021
* This project was shared with neighboring ranches.
The Top Hat Ranch is located in the high desert of the Arizona Strip and its BLM allotments are administered by the BLM’s Arizona Strip Field Office.

Note: Financial information acquired through Freedom of Information Act requests and Public Records Requests.

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2 Comments

  1. This is absolutely great info but really not terribly surprising once you scratch the surface of western “welfare” ranching as a whole.
    It really makes the whole cowboy image more suited for Village People type cosplay than it does as a fantasy proud lifestyle to lust after.

  2. Thanks very much for this instructive info! It’s amazing that LFP program for welfare ranchers has permanent funding while programs for endangered species conservation DON’T. It’s also amazing that welfare rancher numbers are small & mostly wealthy spongers off Fed. govt. & public surveys show little support for them but they dominate Western politics due to lobbying groups & fact that many of these moochers themselves are in state/federal office. See my article The Politics of State Wildlife Management: Why Anti-Conservation Forces Usually win at https://www.weebly.com/editor/main.php#/

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