UNIVERSITY PARK, Pa. -- Dairy and livestock producers suffering under Pennsylvania's extended drought may be eligible for federal financial assistance through a new U.S. Department of Agriculture drought relief program.

The new Livestock Compensation Program provides $752 million to offset skyrocketing feed and grain prices and plummeting forage and silage production for dairy, cattle, sheep and buffalo producers.

The program is open to producers located in counties that have received primary disaster designation due to drought in 2001 or 2002. Forty-four of Pennsylvania's 67 counties received the federal disaster designation last year, and Pennsylvania Governor Mark Schweiker has requested the designation for 54 counties this year.

The assistance is coming at a time when cash flow is very tight on many livestock farms, according to Ken Bailey, Penn State associate professor of dairy marketing and policy.

"The drought, which also covers much of the western United States and Canadian prairie provinces, has reduced feed grain and forage production in Pennsylvania," Bailey says. "It also has elevated grain and hay prices nationwide. Farm profits are being squeezed at both ends, so this program will be well received by livestock producers in Pennsylvania -- particularly dairy producers -- who also are facing record low milk prices."

Pennsylvania livestock producers can sign up for the new program at their local Farm Service Agency (FSA) office starting Oct. 1. "Counties that had disaster designation last year already are eligible for the program," says Richard Pallman, FSA executive director for Pennsylvania. "We'll know which additional counties will be eligible for this program in the next few weeks. It's important that producers keep checking with their local FSA offices."

Pallman notes that under the program, producers need not certify compliance with conservation programs to receive funds. Once a producer's application is approved, the checks will be issued as quickly as possible. Payments are limited to $40,000 per application, and participants must have gross revenues of $2.5 million or less for the preceding tax year to qualify for benefits.

The payment rate for producers is based on standard feed consumption data for each eligible livestock class, with dairy cows allotted $31.50 per head, beef cattle allotted $18 per head, stockers receiving $13.50 per head, buffalo and beefalo getting $18 per head and sheep drawing $4.50 per head.

In addition to the new Livestock Compensation Program, USDA's Farm Service Agency is working to speed implementation of new grain and dairy programs under the 2002 Farm Bill, including producer enrollment, local FSA officer training and introduction of new software.

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EDITORS: Contact Ken Bailey at 814-863-8649 or baileyk@psu.edu.

Contact: Gary Abdullah gxa2@psu.edu 814-863-2708 814-863-9877 fax #259