USDA Announces CFAP Details

Posted on Tue, 05/19/2020 - 11:00

USDA today announced details of the Coronavirus Food Assistance Program (CFAP), which will provide up to $16 billion in direct payments to deliver relief to America’s farmers and ranchers impacted by the coronavirus pandemic. In addition to this direct support to farmers and ranchers, USDA’s Farmers to Families Food Box program is partnering with regional and local distributors, whose workforces have been significantly impacted by the closure of many restaurants, hotels, and other food service entities, to purchase $3 billion in fresh produce, dairy, and meat and deliver boxes to Americans in need. The latter program is already underway.

As expected, USDA announced it will begin accepting applications from ag producers who have suffered losses through Farm Service Agency, beginning May 26. During a related press conference today, President Donald Trump said payments will be issued within a week of receiving applications.

USDA provided the following details regarding the program:  

Background

CFAP provides vital financial assistance to producers of agricultural commodities who have suffered a 5% or greater price decline due to COVID-19 and face additional significant marketing costs as a result of lower demand, surplus production and disruptions to shipping patterns and the orderly marketing of commodities.

Farmers and ranchers will receive direct support, drawn from two possible funding sources. The first source of funding is $9.5 billion in appropriated funding provided in the Coronavirus Aid, Relief, and Economic Stability (CARES) Act to compensate farmers for losses due to price declines that occurred between mid-January 2020, and mid-April 2020 and provides support for specialty crops for product that had been shipped from the farm between the same time period but subsequently spoiled due to loss of marketing channels. The second funding source uses the Commodity Credit Corporation Charter Act to compensate producers for $6.5 billion in losses due to on-going market disruptions.

Non-Specialty Crops and Wool

Non-specialty crops eligible for CFAP payments include malting barley, canola, corn, upland cotton, millet, oats, soybeans, sorghum, sunflowers, durum wheat, and hard red spring wheat. Wool is also eligible. Producers will be paid based on inventory subject to price risk held as of Jan. 15, 2020. A payment will be made based on 50% of a producer’s 2019 total production or the 2019 inventory as of Jan. 15, 2020, whichever is smaller, multiplied by the commodity’s applicable payment rates.

Commodity

Unit of Measure

CARES Act Payment Rate

CCC Payment Rate

Barley (malting barley only)

bushel

$0.34

$0.37

Canola

pound

$0.01

$0.01

Corn

bushel

$0.32

$0.35

Upland Cotton

pound

$0.09

$0.10

Millet

bushel

$0.31

$0.34

Oats

bushel

$0.15

$0.17

Sorghum

bushel

$0.30

$0.32

Soybeans

bushel

$0.45

$0.50

Sunflowers

pound

$0.02

$0.02

Wheat, Durum

bushel

$0.19

$0.20

Wheat, Hard Red Spring

bushel

$0.18

$0.20

 

Livestock

Livestock eligible for CFAP include cattle, lambs, yearlings and hogs. The total payment will be calculated using the sum of the producer’s number of livestock sold between Jan. 15 and April 15, 2020, multiplied by the payment rates per head, and the highest inventory number of livestock between April 16 and May 14, 2020, multiplied by the payment rate per head.

Livestock

Eligible Livestock

Unit of Measure

CARES Act Part 1 Payment Rate

CCC Part 2 Payment Rate

Cattle

Feeder Cattle: Less than 600 Pounds

Head

$102.00

$33.00

 

Feeder Cattle: 600 Pounds or More

Head

$139.00

$33.00

 

Slaughter Cattle: Fed Cattle

Head

$214.00

$33.00

 

Slaughter Cattle: Mature Cattle

Head

$92.00

$33.00

 

All Other Cattle

Head

$102.00

$33.00

Hogs and Pigs

Pigs: Less than 120 Pounds

Head

$28.00

$17.00

 

Hogs: 120 Pounds or More

Head

$18.00

$17.00

Lambs and Yearlings

All Sheep Less than 2 Years Old

Head

$33.00

$7.00

 

Dairy

For dairy, the total payment will be calculated based on a producer’s certification of milk production for the first quarter of calendar year 2020 multiplied by a national price decline during the same quarter. The second part of the payment is based a national adjustment to each producer’s production in the first quarter.

"For dairy, a single payment will be made based on a producer’s certification of milk production for the first quarter of calendar year 2020 multiplied by $4.71 per hundred weight. The second part of the payment is based a national adjustment to each producer’s production in the first quarter multiplied by $1.47 per hundred weight," USDA details.

It also notes, “Any dumped milk production during the months of January, February, and March 2020 is eligible for assistance. However, any milk production priced under a forward contract for any time during January, February, and/or March is ineligible.”

Specialty Crops

For eligible specialty crops, the total payment will be based on the volume of production sold between Jan. 15 and April 15, 2020; the volume of production shipped, but unpaid; and the number of acres for which harvested production did not leave the farm or mature product destroyed or not harvested during that same time period, and which have not and will not be sold. Specialty crops include, but are not limited to, almonds, beans, broccoli, sweet corn, lemons, iceberg lettuce, spinach, squash, strawberries and tomatoes. A full list of eligible crops can be found on farmers.gov/cfap. Additional crops may be deemed eligible at a later date.

Eligibility

There is a payment limitation of $250,000 per person or entity for all commodities combined. Applicants who are corporations, limited liability companies or limited partnerships may qualify for additional payment limits where members actively provide personal labor or personal management for the farming operation. Producers will also have to certify they meet the Adjusted Gross Income limitation of $900,000 unless at least 75% or more of their income is derived from farming, ranching or forestry-related activities. Producers must also be in compliance with Highly Erodible Land and Wetland Conservation provisions.

Applying for Assistance

Producers can apply for assistance beginning on May 26, 2020. Additional information and application forms can be found at farmers.gov/cfap. Producers of all eligible commodities will apply through their local FSA office. Documentation to support the producer’s application and certification may be requested. FSA has streamlined the signup process to not require an acreage report at the time of application and a USDA farm number may not be immediately needed. Applications will be accepted through Aug. 28, 2020.

Payment Structure

To ensure the availability of funding throughout the application period, producers will receive 80% percent of their maximum total payment upon approval of the application. The remaining portion of the payment, not to exceed the payment limit, will be paid at a later date as funds remain available.

USDA Service Centers are open for business by phone appointment only, and field work will continue with appropriate social distancing. While program delivery staff will continue to come into the office, they will be working with producers by phone and using online tools whenever possible. All Service Center visitors wishing to conduct business with the FSA, Natural Resources Conservation Service, or any other Service Center agency are required to call their Service Center to schedule a phone appointment. More information can be found at farmers.gov/coronavirus.   

Other Items of Note from the White House Presser

Also of note, during his press conference Trump said the package should compensate producers for losses in just about every category, and said that if some commodity producing group was overlooked, we would add them.

Trump also said he is looking at the possibility of terminating trade deals where cattle are imported from other countries. “I think we should look at terminating. We’re very self-sufficient,” Trump said at the, noting to USDA Secretary Sonny Perdue that he should look into that, "but consider our good allies." Trump stopped short of naming specific countries.

During the followup Q&A session, Perdue noted that this particular program does not include producer aid for euthanization that has already occurred at livestock farms and ranches. But he said aid will be coming via Natural Resources Conservation Services. Policy on that will be based on sound data, Perdue emphasized.