U.S. Secretary of Agriculture Sonny Perdue, announced details of the Coronavirus Food Assistance Program May 19, which will provide up to $16 billion in direct payments to send relief to America’s farmers and ranchers impacted by the COVID-19 pandemic.
In addition to this direct support to farmers and ranchers, U.S. Department of Agriculture’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.
“America’s farming community is facing an unprecedented situation as our nation tackles the coronavirus,” Perdue said. “President Trump has authorized USDA to ensure our patriotic farmers, ranchers, and producers are supported and we are moving quickly to open applications to get payments out the door and into the pockets of farmers. These payments will help keep farmers afloat while market demand returns as our nation reopens and recovers. America’s farmers are resilient and will get through this challenge just like they always do with faith, hard work, and determination.”
Beginning May 26, USDA through the Farm Service Agency, will be accepting applications from producers who have experienced losses due to the pandemic. CFAP has been providing financial assistance to agricultural producers who have suffered a 5% or more price decrease due to COVID-19 and added marketing costs as a result of lower demand, surplus production and interruptions to shipping patterns and the regular marketing of commodities.
According to USDA, 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 Act to compensate farmers for losses due to price declines that occurred between mid-January 2020 and mid-April 2020. It will also offer reimbursement for specialty crops for products that had been shipped from the farm between the same time period, but spoiled due to loss of marketing channels. The second will use the Commodity Credit Corporation Charter Act to compensate producers for $6.5 billion in losses due to ongoing market disruptions.
Breaking down the assistance dollars
Cattle producers will be the largest recipients of the aid at roughly $5 billion, however lambs, yearling sheep and hogs are also eligible. 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.
Payments for cattle are broken down depending on the type of cattle and if they were sold from Jan. 15 to April 15. Fed cattle for slaughter—$214 per head; slaughter cows and bulls—$92 per head; feeder cattle under 600 pounds—$102 per head; feeders over 600 pounds—$139 per head and all other cattle—$102 per head. Unpriced cattle in inventory from April 16 to May 14 will receive a flat rate from the CCC of $33 per head.
Dairy farmers will be paid on a certification of their first-quarter production with $4.71 per hundredweight coming from the CARES Act. A second payment based on second-quarter production will also be multiplied by 1.014, then a payment will be made for $1.47 per hundredweight from the CCC.
Pigs sold from Jan. 15 to April 15 have a payment rate of $28 per head while hogs sold during that time have a payment rate of $18 per head. Unsold hogs and pigs in inventory from April 16 to May 14 have a payment rate of $17 per head. At this time, USDA does not have any payment indemnity in the CFAP for euthanized hogs. Lambs and yearling sheep also have a CARES payment of $33 per head and a CCC payment of $7 per head. Left out of the program were contract poultry growers. USDA officials said farmers would have to show ownership of the commodity to receive a payment.
For non-specialty commodity crops, payments are eligible for unpriced crops, or “inventory held subject to price risk” that a farmer held on Jan. 15, 2020. 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. 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.
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 destroyed product or not harvested during that same time period. 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.
What are the rules and where do you apply?
According to USDA, there is a payment limitation of $250,000 per person or entity for all commodities combined or $500,000 for a married couple. 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.
Producers can apply for assistance May 26 through Aug. 28, 2020. 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.
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 at a later date as funds remain available. For more information, visit farmers.gov/coronavirus.
Lacey Newlin can be reached at 580-748-1892 or email@example.com.