by Helena Kagan

Abstract 

This paper examines the impacts of drought conditions, as defined by the U.S. Drought Monitor (USDM), on U.S. beef cattle inventories between 2000 and 2023. Using a county-level panel dataset and fixed effects models that exploit geographical and time variation in drought exposure, we estimate how additional weeks of various drought severity levels affect annual cattle populations. We find that weeks spent in extreme (D3) and exceptional (D4) drought significantly reduce herd sizes, with D3 associated with an 11-basis point decline and D4 with a 27-basis point decline per week. We assess the interaction between prolonged drought and participation in the Livestock Forage Disaster Program (LFP), a federal disaster assistance program. Results show that LFP payments—especially the 4‐month and 5‐month tiers triggered by extended D3 or D4 drought—partially offset the effects of drought on herd retention. Ultimately, our analysis provides empirical evidence that persistent, high-severity drought reduces cattle inventories, but targeted disaster assistance can mitigate these impacts.

Professor Jeffrey DeSimone, Faculty Advisor
Professor Michelle P. Connolly, Faculty Advisor

JEL Codes: Q18, Q54, Q12

Keywords: Drought, Livestock Forage Disaster Program, Cattle

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