USDA Announces Additional Assistance for Cattle, Row Crop Producers

USDA announced today more than $12 billion for the Pandemic Assistance for Producers, which will help farmers and ranchers who previously did not qualify for COVID-19 aid and expand assistance to farmers who have already received help. Farmers who previously submitted CFAP applications will not have to apply again. Sign-up for the new program begins on April 5.

 

 

The last COVID-19 stimulus package of 2020, passed by Congress on Dec. 21, contained much-needed financial relief for agricultural producers. The bill’s agricultural provisions included additional assistance for producers, contract growers and producers who had to depopulate animals, supplemental coverage for Dairy Margin Coverage, and additional inventory payments for livestock producers. On Jan. 15, USDA announced that it would be moving forward with programs for selected provisions of the bill, including allowing contract growers to apply for assistance under CFAP 2 and updating the payment calculations for certain crops. Upon assuming office, the new administration put a hold on all of these last-minute programs (a common practice for incoming administrations) and put the new CFAP program under review. Today, USDA announced the review was complete for select commodities and released some details of its plans to distribute more than $12 billion under the Pandemic Assistance for Producers. These updates include reopening the Coronavirus Food Assistance Program 2 (CFAP 2), additional payments for eligible cattle and row crop producers, and the processing of payments for certain applications filed as part of CFAP Additional Assistance. USDA’s Farm Service Agency will accept new and modified CFAP 2 applications beginning April 5.   

 

 

 

USDA has expanded direct financial assistance for commodity producers with the intent to expedite payments totaling more than $4.5 billion, impacting more than 560,000 producers. Producers of 2020 price trigger crops and flat-rate crops are eligible to receive a payment of $20 per eligible acre of the crop. Price trigger commodities, as defined in the second Coronavirus Food Assistance Program, are major commodities that meet a minimum 5% price decline for the week of Jan. 13-17, 2020, and July 27-31, 2020. These crops include barley, corn, sorghum, soybeans, sunflowers, upland cotton and all classes of wheat, among others found here. 

 

Flat-rate crops either do not meet the 5%-or-greater national price decline trigger or do not have data available to calculate a price change. For flat-rate crops, CFAP 2 payments were calculated based on eligible acres of the crop planted in 2020. More than 230 fruit, vegetable, horticulture and tree nut commodities were eligible for CFAP 2 along with honey, maple sap, and turfgrass sod; more information can be found here. These commodities will also receive a payment of $20 per acre.

 

Eligible producers will not need to reapply or submit a new application if they submitted a CFAP 2 application. FSA will automatically issue payments to eligible price trigger and flat-rate crop producers based on the eligible acres included in their CFAP 2 applications.

 

 

USDA is dedicating $6 billion to develop new programs or modify existing proposals that were included as discretionary funding in the end-of-year COVID-19 stimulus package. USDA is making modifications to direct support payments to account for price differentiation among commodities, including costs for organic certification or to continue or add conservation activities.

 

USDA will also make available an additional $100 million in Specialty Crop Block Grants that are administered through each state’s Department of Agriculture, along with an additional $100 million for the Local Agriculture Market Program.

 

 

USDA is following through on using a portion of the appropriated money for payments to domestic users of upland cotton and extra long staple cotton between March 1, 2020, and Dec, 31, 2020. The payment rate is calculated by multiplying 6 cents per pound by the average monthly consumption of the domestic user from Jan. 1, 2017, through Dec. 31, 2019, then multiplying it by 10, e.g., cotton payment = $0.60 x (avg. monthly consumption Jan 1, 2017-Dec 31, 2019).

 

Moreover, one of the consequences of COVID-19 precautions and stay-at-home orders was a significant decrease in fuel consumption, which slashed to biofuel demand. Since the beginning of 2020 through mid-December, the cumulative decline in ethanol production is nearly 2 billion gallons. USDA has made payments available to producers of advanced biofuel, biomass-based diesel, cellulosic biofuel, conventional biofuel, or renewable fuel due to unexpected market losses as a result of COVID-19.

 

 

 

Many producers were left out of the CARES Act and subsequent CFAP iterations because farmers who raise animals under a contract for another entity that owns the animals could not participate. However, these producers saw their income significantly reduced as many of their barns (which they financed the construction of and still were required to service the debt on) remained empty due to supply chain disruptions earlier in the pandemic. The COVID-19 relief bill passed in December identified these producers as being eligible for support. However, USDA clarified today that payments for contract growers under CFAP Additional Assistance are currently on hold and are likely to require modifications to the regulation as part of a broader evaluation. FSA will continue to accept applications from interested contract growers during this evaluation period.

 

 

Included in this announcement is additional inventory-based direct payments for cattle producers. USDA is implementing an increase in CFAP 1 payment rates for cattle based on the number of cattle in inventory between April 16, 2020, and May 14, 2020. USDA estimates that roughly 410,000 producers will be impacted by this and that the total level of support could equal roughly $1.1 billion. These payments will be made automatically, so there will be no need for producers who were already enrolled to reapply. Only producers who previously applied for CFAP 1 are eligible to receive this additional payment. Payment rates are detailed in the following figure.