USDA Details on Coronavirus Food Assistance Program (CFAP)

ODFA

Finally details to share on payments to producers.
This information was provided by
National Milk Producers Federation.

President Trump used a White House used a White House ceremony today to provide further details on the farm payments to be delivered as part of the USDA’s Coronavirus Food Assistance Program. While we knew the general outlines of the $2.9 billion dairy payment component of the overall $16 billion payment package for agriculture, key details were not clarified until today. This afternoon, USDA provided those details.

 





 

First, the department announced that the overall payment it issues starting early next month will have two components. The first rate will be $4.71/cwt. on a farm’s first-quarter 2020 production. According to the agency, this payment rate reflects 80 percent of the decline in milk prices experienced in Q1.

For the second part of the payment, addressing 25% of the projected losses expected in the second quarter, USDA will multiply a farm’s established first quarter production by 1.4%, thus increasing the payment base slightly in anticipation of rising spring production. USDA will then multiply that number by $1.47/cwt. Any dumped milk production during the months of January, February, and March 2020 is eligible for assistance. However, milk production covered under a forward contract for any time during January, February, and/or March appears to be ineligible for loss payments.

The payment will be delivered to producers in two allotments, but not broken out as above. Rather, producers will initially receive 80% of the total payment to which they are entitled when they sign up, and will later on receive the other 20%. USDA said they are initially holding back the 20% to insure they have enough money to go around.

The agency said today that dairy farmers are not eligible for payments due to reduced prices for cull cow sales.

Signup will begin next Tuesday, and more details on what farmers need to provide to their county FSA office are listed here. To find your local FSA office, click here.

The USDA also addressed – to a degree – our efforts to raise the initial payment limit of $125,000 per commodity. The new program has a payment limit of $250,000 per person across all commodities. However, there is an exemption for corporations, LLCs, and limited partnerships that allows up to three entities to qualify for payments up to that level, provided they can demonstrate their involvement in the active operation of the farm. Thus for a dairy with three or more actively engaged owners, the payment limit will be $750,000.

 





 

As noted in our initial statement today, these aid levels will not fully meet the needs of our members due to the ongoing disruption from the coronavirus crisis. NMPF will continue to work with administration officials and members of Congress to achieve adequate aid for all dairy producers, whose projected losses of $8.2 billion, based on USDA data, place them among the hardest-hit U.S. agricultural commodities.

This snapshot reflects our immediate analysis of today’s announcement. We will continue to keep you apprised of additional analysis of this aid package and its impact on the economic outlook in 2020. Please continue to share your thoughts with us as the CFAP direct payment program commences next week.

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