Signup begins on May 26 for Coronavirus Food Assistance Program

By Kent Thiesse

USDA announced details for enrollment in the Coronavirus Food Assistance Program (CFAP), which will authorize up to $16 billion in direct payments to farmers and ranchers to partially help offset the financial impacts that U.S. farmers and ranchers have incurred as a result of the COVID-19 pandemic. The aid package also included $3 billion for USDA to purchase fresh produce and meat to be delivered to those in need through food banks and other charitable organizations, which is already occurring. The payment structure and formulas for CFAP crop and livestock payments are somewhat complex. 

Following is a brief overview of sign-up details and payment calculations for the CFAP payments: 

  • CFAP Enrollment – Sign-up for the CFAP program is May 26 through August 28, 2020, at local Farm Service Agency (FSA) offices. Currently, FSA offices are open for business by phone appointment only. Once FSA has verified CFAP eligibility, producers will be able to complete the application on-line. The CFAP application tool and forms will be available at www.farmers.gov/CFAP.
  • Other CFAP requirements – For producers that typically enroll in farm programs or utilize other FSA services, the FSA offices likely already have most of the background information needed to apply for CFAP payments. For producers that are new to using FSA programs and services, they will need to supply the FSA office with name, address, and personal information. They will also need to provide business structure information as well as adjusted gross income verification, direct deposit information, and conservation compliance.
  • Covered Commodities 

Field Crops – Corn, soybeans, spring wheat, drum wheat, sorghum, oats, malting barley, canola, upland cotton, millet, and sunflowers.

Livestock – Cattle, hogs, sheep, wool, and dairy.

Specialty Crops – Numerous fruits, vegetables, nuts, and other specialty crops.

For a complete list go to www.farmers.gov/CFAP

  • Commodities not covered – Winter wheat, rice, rye, flax, feed barley, peanuts, alfalfa, forage crops, ESL cotton, eggs, poultry, hemp, and tobacco. 

Note – Commodities were deemed eligible for CFAP based on a 5 percent or more price decline from January 15 to April 15, 2020. Except for hemp and tobacco, USDA may reconsider eligibility of the other commodities, if there is evidence that supports the required 5 percent price decline.                                                   

  • Payment structure and timeline — The funding for the CFAP direct payments will be derived as follows: $9.5 billion from the $2.2 trillion CARES Act and $6.5 billion currently available through Commodity Credit Corporation (CCC) funds. There are two listed payment rates for each commodity, one for the CARES Act funds and one for the CCC funds. The eligible payments are then combined into one payment to producers, which will be paid at 80 percent as an initial payment. The final 20 percent will be paid later, as funds become available. FSA hopes to have initial payments out very soon after the CFAP application process is completed. 
  • Field Crop payment rates — Following are the payment rates for common crops:

Corn – CARES rate = $.32 per bushel; CCC rate = $.35 per bushel; Total = $.67 per bushel.

Soybeans – CARES rate = $.45 per bushel; CCC rate = $.50 per bushel; Total = $.95 per bushel.

Spring Wheat – CARES rate = $.18 per bushel; CCC rate = $.20 per bushel; Total = $.38 per bushel.

  • Livestock payment rates:

Hogs – CARES rate = $18 per head for market hogs; $28 per head for hogs under 120 pounds. CCC rate = $17 per head for all hogs.

Cattle – CARES rate = $214 per head for market cattle; $102 per head for feeder cattle under 600 pounds and $139 per head for 600 pounds and over; $92 per head for market cows. CCC rate = $33 per head for all cattle.

Sheep – CARES rate = $33 per head for market sheep less than two years old. CCC rate = $7 per head for all sheep.

Dairy – CARES rate = $4.71 per hundredweight of eligible production. CCC rate = $1.47 per hundredweight of eligible production.

  • CFAP payment calculations:

Field Crops – Both the CARES and CCC payments will be based on the following bushels or amount: The lesser of 50 percent of the verified 2019 production for a crop or the unpriced bushels in inventory on January 15, 2020.

The CARES and CCC rates are then applied on 50 percent (.50) of the eligible bushels.

Example – 100,000 eligible bushels of corn in inventory on January 15. 

100,000 Bu. x .50 = 50,000 Bu. x $.67/Bu. (total) = $33,500

Initial Payment = $33,500 x .80 = $26,800  

Livestock – The CARES rate funding is based on the number of head sold from January 15 to April 15.  

The CCC rate funding is based on the highest inventory between April 16 and May 14.

Example – 5,000 market hogs sold x $18/head = $90,000 CARES payment.

8,000 hog inventory on May 1 x $17/head = $136,000 CCC payment

Total Payment = $90,000 + $136,000 = $226,000

Initial Payment = $226,000 x .80 = $180,800 

Dairy – CARES payments will be based on certified milk production for the first quarter of 2020.

The CCC payments will be based on the first quarter production times a factor of 1.014.

  • Payment Limits – Following are payment limits that apply to CPAP payments:

$250,000 per individual or entity or all commodities.

A corporation or partnership may have payment limits for up to 3 individuals, for a total of $750,000, provided that they meet eligibility requirements. A person must have an adjusted gross income of less than $900,000 to be eligible.   

  • Other details on the CFAP payments — Payments through CFAP are direct payments to producers of crops, livestock, and specialty crops and do not have to be repaid. This is different than the PPP and EIDL loan funding that was received through the U.S. Small Business Administration (SBA).

 

  • Where to get more details regarding CFAP enrollment and payments:

Information on the CFAP program and applications will be available at local FSA offices. Producers are encouraged to be patient with FSA office staff, as this is a new program and there is likely to be heavy demand for enrollment due to the wide range of commodities that are eligible for CFAP payments.

The application, calculations for specialty crops and other commodities, and other information for CFAP are available at www.farmers.gov/CFAP.

For additional information email Kent Thiesse, Farm Management Analyst and Senior Vice President, MinnStar Bank, Lake Crystal at kent.thiesse@minnstarbank.com.  

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