USDA announces second round of COVID payments
The U.S. Department of Agriculture (USDA) is opening sign-ups this week for the second round of the Coronavirus Food Assistance Program (CFAP 2), which will provide an additional $14 billion for farmers who continue to face market disruptions and associated costs because of COVID-19.
“Many sectors of the economy have struggled through the global pandemic, and agriculture is no exception, with many farm families feeling the hardship and fighting to keep their farms sustainable," said Iowa Farm Bureau Federation President Craig Hill. "Many farmers were left out of the initial round of CFAP aid, which expired last week, so the announcement of a second round of assistance is welcomed news. This assistance from the USDA will help Iowa farmers to stay afloat and continue to farm and raise the food we all rely on.”
The USDA will use funds from the Commodity Credit Corporation (CCC) Charter Act and CARES Act to support row crops, livestock, specialty crops, dairy, aquaculture and many additional commodities.
CFAP 2 payments will be made for three categories of commodities: price trigger commodities, flat-rate crops and sales commodities. Farmers can apply for CFAP 2 through Dec. 11 at USDA Farm Service Agency (FSA) county offices.
Price Trigger Commodities
Price trigger commodities are major commodities that meet a minimum 5% price decline over a specified period of time. Eligible price trigger crops include barley, corn, sorghum, soybeans, sunflowers, upland cotton and all classes of wheat.
Payments will be based on 2020 planted acres of the crop, excluding prevented planting and experimental acres. The effective payment rates will be 31 cents per bushel for soybeans and 23 cents per bushel for corn, said American Farm Bureau Chief Economist John Newton. Those rates will be multiplied by acreage and the Actual Production History (APH) approved yield.
Eligible beef cattle, hogs and pigs, and lambs and sheep payments will be based on the maximum owned inventory of eligible livestock, excluding breeding stock, on a date selected by the producer, between April 16 and Aug. 31. Payments are set at $55 per head for beef cattle, $23 per head for hogs/pigs and $27 per head for sheep.
Dairy payments will be based on actual milk production from April 1 to Aug. 31. The milk production for Sept. 1, 2020, to Dec. 31, 2020, will be estimated by FSA.
For broilers and eggs, payments will be based on 75% of the producers’ 2019 production.
Crops that either don't meet the 5% price decline trigger or don't have data available to calculate a price change will have payments calculated based on eligible 2020 acres multiplied by $15 per acre. These crops include alfalfa, extra long staple (ELS) cotton, oats, peanuts, rice, hemp, millet, mustard, safflower, sesame, triticale, rapeseed and several others.
Sales commodities include specialty crops; aquaculture; nursery crops and floriculture; other commodities not included in the price trigger and flat-rate categories, including tobacco; goat milk; mink (including pelts); mohair; wool; and other livestock (excluding breeding stock) not included under the price trigger category that were grown for food, fiber, fur or feathers. Payment calculations will use a sales-based approach, where producers are paid based on five payment gradations associated with their 2019 sales.
There is a payment limitation of $250,000 per person or entity for all commodities combined. Farm management arrangements involving multiple owners who provide labor or management may qualify for additional payment limits.
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.
Click here for a complete detailed rundown of CFAP 2 from American Farm Bureau economists Dr. John Newton and Michael Nepveux.
Additional information and application forms can be found at farmers.gov/cfap.
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