Posted 05/19/2020

Member Update: May 19, 2020, no. 2

President Donald Trump and U.S. Secretary of Agriculture Sonny Perdue have just released the eagerly awaited details of the Coronavirus Food Assistance Program (CFAP). The NDSA is still digesting the rule, but, in the meantime, here are the preliminary details:

Eligible livestock

CFAP assistance is available to livestock producers who have an ownership interest in eligible livestock that have suffered a 5 percent or greater price decline as a result of the COVID-19 pandemic and face additional significant costs in marketing their inventories due to unexpected surplus and disrupted markets.

Livestock eligible for CFAP include cattle, hogs and sheep. Specifically, eligible livestock are:

• Hogs
  • Pigs (< 120 lbs.)
  • Hogs (> 120 lbs.)
• Cattle
  • Feeder Cattle (<600 lbs.)
  • Feeder Cattle (> 600 lbs.)
  • Slaughter Cattle: Fed Cattle
  • Slaughter Cattle: Mature Cattle
  • All Other Cattle (not including livestock used, or intended for, dairy production).
• Sheep
  • Lambs and yearlings (less than 2 years of age)

CFAP Payments for Livestock

A single payment for livestock will be calculated using the sum of the producer’s number of livestock sold between Jan. 15, 2020, and April 15, 2020, multiplied by the payment rates per head, and the highest inventory number of livestock between April 16, 2020, and May 14, 2020, multiplied by the payment rate per head.

Producers must provide the following information for CFAP:

• Total sales of eligible livestock, by species and class, between Jan. 15, 2020, to April 15, 2020, of owned inventory as of Jan. 15, 2020, including any offspring from that inventory; and
• Highest inventory of eligible livestock, by species and class, between April 16, 2020, and May 14, 2020.

The following table lists eligible livestock and payment rates for CFAP:

Signup Information

Farm Service Agency staff at local USDA Service Centers will work with producers to file applications. USDA will begin accepting applications on May 26, 2020, the day after Memorial Day. Signup ends Aug. 28, 2020.

Adjusted Gross Income Limits

To participate, a person or legal entity’s Adjusted Gross Income (AGI) cannot exceed $900,000 (using the average for the 2016, 2017 and 2018 tax years). However, the AGI limit does not apply if 75 percent or more of an eligible person’s or legal entity’s AGI comes from farming, ranching or forestry-related activities.

Available Funding

USDA has indicated that, to ensure the availability of funding throughout the application period, producers will receive 80 percent 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.

Payment caps

There is a payment limitation of $250,000 per person or entity for all commodities combined. Applicants who are corporations, limited liability companies or limited partnerships may qualify for up to three payment limits if at least three members of the entity each provide at least 400 hours of active personal labor or active personal management for the farming operation.

How were payment rates determined?

USDA has indicated that it analyzed available information on futures and cash prices for commodities. Prices in mid-January were compared to prices in mid-April to determine the impact of COVID-19. For livestock sales occurring prior to April 15, 2020, producers are eligible for 80 percent of the calculated change in price multiplied by sales. Rates for adjustment costs and assistance with surplus for the expected second and third quarters of 2020 were calculated by multiplying 25 percent of the change in price for the marketable animals, and then were divided by total inventory to develop a per-head rate.

How are payments determined?

USDA indicated that payments are based on cattle sold between Jan. 15, 2020, and April 15, 2020, multiplied by the payment rates by cattle type plus a producer’s cattle inventory subject to price risk on a date of his/her choosing between April 16, 2020, to May 14, 2020, multiplied by the payment rate.

More details

For general CFAP information, click here.

For livestock-related CFAP information, click here.

For a list of Frequently Asked Questions, click here.

For details about what producers can do now to prepare for signup, click here.

For the media release announcing the CFAP program, click here.

Stakeholder call for more details today

USDA will be holding a stakeholder call at 2 p.m. today. To participate, you must register in advance at the following link: https://www.zoomgov.com/webinar/register/WN_DETFoo8ERdyPRUgh3B84UA