Federal Drought Assistance and Adaptation Decisions in the U.S. Livestock Sector

ABSTRACT The increasing severity and duration of drought conditions has important implications for the agricultural sector, and particularly livestock producers, as drought can negatively impact profitability and forage availability. The USDA's Livestock Forage Disaster Program (LFP) aims to reduce the economic costs of drought by providing payments to livestock producers experiencing predetermined levels of drought. This paper assesses whether the program alters adaptation behavior and income among livestock producers. Our results suggest that the LFP does not significantly alter adaptation through herd retention and liquidation decision‐making, and it shows no significant impact on producer income measured as county‐level agricultural GDP.