USDA yesterday announced the details of the Coronavirus Food Assistance Program (CFAP), including how it will be implemented and how payments will be dispersed. The program will provide $16 billion in direct payments to agricultural producers from two funding sources, the Coronavirus Aid, Relief, and Economic Stability (CARES) Act and the Commodity Credit Corporation (CCC) Charter Act.
CFAP assistance is available to livestock producers who have an ownership interest in eligible livestock that have suffered a 5% or greater price decline as a result of the coronavirus pandemic and face additional significant costs in marketing their inventories due to unexpected surplus and disrupted markets. Livestock eligible for CFAP include cattle, hogs, and sheep.
A single payment for livestock will be calculated using the sum of the producer’s number of livestock sold between January 15 and April 15, 2020, multiplied by the CARES Act payment rates per head; and the highest inventory number of livestock between April 16 and May 14, 2020, multiplied by the CCC payment rate per head.
NOTE: KLA told USDA not to set an arbitrary marketing date when staff provided input after President Trump signed the bill. KLA is working with the Kansas Congressional delegation and NCBA to correct the disparity. There should be an opportunity to fix (or at least improve) the problem in the next stimulus package.
- Total sales of eligible livestock, by species and class, between January 15, 2020, and April 15, 2020, of owned inventory as of January 15, 2020, including any offspring from that inventory.
- Highest inventory of eligible livestock, by species and class, between April 16, 2020, and May 14, 2020.
CFAP payments are eligible to all dairy operations with milk production in January, February and/or March 2020. Any dumped milk production during these months is eligible for assistance.
A single payment will be made equal to the sum of the following two calculations: First, a producer’s certification of milk production for the first quarter of calendar year 2020, multiplied by $4.71/cwt. Second, a producer’s certification of milk production for the first quarter of calendar year 2020, multiplied by 1.014, then multiplied by $1.47/cwt.
Eligibility for non-specialty crops, like corn, sorghum, and soybeans, is based on whether the crops experienced a decline in futures prices of 5 percent or greater between the average of prices for the week of January 13-17, 2020, and the average of prices for the week of April 6-9, 2020.
Payments will be paid based on the sum of any unpriced inventory that is harvested but held in inventory as of January 15, 2020, not to exceed 50 percent of 2019 total production, multiplied by 50 percent, multiplied by the CARES payment rate; and unpriced inventory as of January 15, 2020, not to exceed 50 percent of 2019 total production, multiplied by 50 percent, multiplied by the CCC payment rate.
CFAP PAYMENT LIMITS
CFAP payments are subject to a limitation of $250,000 per person or entity. This limitation applies to the total amount of CFAP payments made with respect to all eligible commodities. Special payment limitation rules will be applied to participants that are corporations, limited liability companies and limited partnerships. These corporate entities may receive a payment limit increase of $250,000 for each additional owner, beyond a single owner, if each additional owner contributes 400 hours of active personal labor or active personal management for production of the commodities for which a payment is claimed. The total limit, however, cannot exceed $750,000.
CFAP PAYMENT STRUCTURE
To ensure the availability of funding throughout the application period, producers will receive 80% 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 later as funds remain available.
The application period will begin May 26 and end August 28. Producers should expect to receive payments seven to 10 days after the date of submission. Once the application period opens, producers should call their Farm Service Agency county office to schedule an appointment. Applications will be submitted electronically either by scanning, emailing or faxing.