Good news for producers impacted by the COVID-19 pandemic: USDA has finalized the details for receiving aid. Sign-up for assistance beings May 26.
On April 17, USDA Secretary of Agriculture Sonny Perdue announced the creation of the Coronavirus Food Assistance Program (CFAP) to help producers during the pandemic. The program included a total of $19 billion in aid and was to be split up into two components.
The first component included $3 billion for USDA purchases of produce, dairy and meat, and the second component included $16 billion in direct support to ag producers. The details of the program were not immediately known, but USDA has finalized eligibility requirements and will accept applications for CFAP beginning May 26.
Information on how to submit an application through a local Farm Service Agency (FSA) office can be found at www.farmers.gov/cfap.
USDA product purchases
USDA committed to partnering with distributors to purchase $3 billion worth of agricultural products. Initially, USDA said a total of $100 million per month of each product would be procured of fresh fruits and vegetables, dairy products, and meat products.
The products would then be used for the new Families Food Box Program, which would package the products and send them to nonprofits helping those in need.
On May 8, the Agricultural Marketing Service announced the program would purchase $1.2 billion in products for delivery from May 15 to June 30. This includes $461 million in fresh fruits and vegetables, $317 million in dairy products, $258 million in meat products, and $175 million in a combination box of produce, dairy, and meat products. The contracts may be extended to reach up to $3 billion.
The Texas A&M University Agricultural and Food Policy Center put together a comprehensive overview of CFAP. A total of $16 billion was allocated for direct support to producers.
Producers have until Aug. 28 to sign up for direct aid. Separate payment rates will be given for each commodity and are largely derived by estimating the price drop from the week of Jan. 13 to the week of April 6.
In order to be eligible for aid, a producer’s commodity must have experienced a price drop of more than 5 percent. Eligible commodities include cattle, hogs, sheep under 2 years of age, dairy, wool, non-specialty crops, and specialty crops.
USDA is also asking for feedback on making additional crops eligible for CFAP, and producers of ineligible commodities who believe they have suffered a 5 percent loss may submit comments.
Payments are limited to $250,000 per person or entity, and corporate entities are eligible for up to $750,00 if at least three shareholders meet certain requirements. Producers are ineligible for CFAP funds if their average gross income is greater than $900,000 unless 75 percent or more is derived from farming, ranching, or forest-related activities.
USDA is initially only paying 80 percent of CFAP funds to eligible producers to ensure adequate funding. If the $16 billion in funding is not depleted after the first payments are made, the remaining 20 percent will be paid at a later date.
The A&M report says in most cases payments are based on “unpriced” inventory, which is “any production that is not subject to an agreed-upon price in the future through a forward contract, agreement, or similar binding document.”
Producers must be able to provide documentation on inventory and production to the FSA if requested.
Examples of accepted documentation include: copies of receipts; ledgers of income; income statements or deposit slips; veterinarian records; register tapes; invoices for custom harvesting; and records to verify production costs, contemporaneous measurements, truck scale tickets, or contemporaneous diaries that are determined acceptable by USDA, according to the final rule.
For livestock producers, a single CFAP payment will be made based on the sum of two components: a payment for livestock marketed between Jan. 15 and April 15, and a payment for the highest inventory of unpriced livestock between April 16 and May 14.
Cattle are categorized into five groups: mature slaughter cattle; fed slaughter cattle; feeder cattle less than 600 lbs.; feeder cattle more than 600 lbs.; and all other cattle (excluding beefalo, bison, and dairy production cattle).
A breakdown of the payment rates of each category of cattle sold between Jan. 15 and April 15 is as follows:
• Mature slaughter cattle—$92 per head;
• Fed slaughter cattle more than 1,400 lbs.—$214 per head;
• Feeder cattle less than 600 lbs.—$102 per head;
• Feeder cattle 600-1,400 lbs.—$139 per head; and
• All other cattle—$102 per head.
A producer who marketed cattle April 16 to May 14 will receive a much smaller payment at $33 per head for unpriced cattle inventory.
The Texas A&M report gives the following example for calculating a payment: An operation has 100 cow-calf pairs (including 100 unweaned 250-lb. calves). The previous year’s 100 weaned calves were retained and grazing on wheat pasture, and were sold on April 13 weighing 800 lbs.
To calculate the total CFAP payment:
• Weaned calves—100 head x $139 per head = $13,900;
• Cows—100 head x $33 per head = $3,300; and
• Unweaned calves— 100 head x $33 per head = $3,300.
This brings the total CFAP payment to $20,500, although a producer will be limited to only 80 percent initially. In contrast, cattle sold after April 15 will only receive $33 per head, which brings the total CFAP payment to $9,900.
Sheep producers are eligible for payments for sheep less than 2 years of age. Sheep marketed between Jan. 15 and April 15 will receive $33 per head, and unpriced inventory between April 16 and May 14 are eligible for $7 per head.
National Cattlemen’s Beef Association (NCBA) President Marty Smith was present at a White House ceremony unveiling CFAP details.
“America’s cattle producers have been hit very hard economically by this pandemic, so we’re pleased that this relief is one step closer to reaching the producers who need it,” Smith said. “Still, this is just one step and much more needs to be done to address the needs facing family cow-calf producers and stockers in the CFAP details that were released today.”
Ranchers-Cattlemen Action Legal Fund USA (R-CALF) CEO Bill Bullard said the group agreed with NCBA in securing more governmental financial assistance for ranchers.
“With NCBA’s focus on needed temporary financial relief to help cattle producers through this mess, we hope that every American rancher can be sustained until such time that R-CALF USA succeeds in implementing the needed market structure reforms that NCBA cannot work on,” Bullard said.
The previously-passed CARES Act (Coronavirus Aid, Relief, and Economic Security Act) will provide $14 billion to replenish Commodity Credit Corporation funds in June. It remains uncertain how and if USDA will utilize the aid.
For a complete list of CFAP-eligible commodities and payments, please visit www.farmers.gov/cfap. — Anna Miller, WLJ editor