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Kent Thiesse

The U.S. Department of Agriculture has recently announced details for enrollment for the second round of payments for the Coronavirus Food Assistance Program (CFAP2). This program will authorize up to $14 billion in direct payments to farmers and ranchers to partially help offset the financial impacts that U.S. farmers and ranchers have incurred as a result of the Covid-19 pandemic.

The CFAP2 aid package is in addition to the CFAP1 payments which many producers have already received for crops, livestock and specialty crops.

Sign-up for the CFAP program began on Sept. 21 and will continue through Dec. 11 at local Farm Service Agency offices. Currently, some FSA offices are open for business by phone appointment only. Once FSA has verified CFAP eligibility, producers may be able to complete the application on-line. The CFAP application tool and forms are be available at www.farmers.gov/CFAP.

For producers who normally enroll in farm programs or utilize other FSA services, the FSA offices likely already have most of the background information needed to apply for CFAP payments. For producers new to utilizing FSA programs and services, they will need to supply the FSA office with name, address and personal information — as well as business structure, adjusted gross income verification, direct deposit information, and conservation compliance.

Covered Commodities

Row crops with price triggers— Corn, soybeans, wheat (all classes), sorghum, barley, sunflowers andupland cotton.

Flat-rate row crops— Alfalfa, amaranth grain ,buckwheat, canola, ELS cotton, crambe (colewort), einkorn, emmer, flax, guar, hemp, indigo, industrial rice, kenaf, khorasan, millet ,mustard, oats, peanut, quinoa, rapeseed, rice, sweet rice, wild rice, safflower, sesame, speltz, sugar beets, sugarcane, teff and triticale.

Livestock— Cattle, hogs, sheep, dairy (milk), broilers, turkeys, goats, bison, buffalo, wool and eggs.

Specialty crops— Sweet corn, peas, fruits, vegetables, nuts, aquaculture and other specialty crops. (For a complete list and payment details, go to www.farmers.gov/CFAP.)

Commodities not covered— Non-alfalfa hay, clover, grass, cover crops, forage sorghum, and home vegetable and flower gardens.

Field crop payment rates

The final CFAP2 payment rate for a given crop is based on the price decline from mid-January until late July, 2020. This figure is multiplied by 80 percent, which is then multiplied by the percentage of the 2020 crop expected to be marketed by year-end.

Following are the approximate final payment rates for common crops: corn, 23 cents per bushel; soybeans, 31 cents per bushel; wheat, 40 cents per bushel; barley, 34 cents per bushel; sorghum, 31 cents per bushel; and sunflowers, 0.9 cents per pound.

Payments for field crops will be based on the 2020 crop acres which were certified at FSA offices.

Crop yields will be the “weighted” average actual production history yield for all farms included in a FSA farm unit. Farms without actual production history yield data will use the County ARC-CO benchmark yield multiplied by 85 percent.

The minimum payment rate for all field crops, including all flat rate crops, is $15 per acre.

For 500 acres of corn with an actual production history of 180 bushels per acre, at a payment rate of 23 cents per bushel, the estimated CFAP2 crop payment would be $20,700.

For 500 acres of soybeans with an actual production history of 50 bushels per acre, at a payment rate of 31 cents per bushel, the estimated CFAP2 crop payment would be $7,750.

Livestock payment rates and calculations

A 5,000-head inventory of hogs at $23 per head would generate an estimated CFAP2 payment of $115,000.

A 500-head inventory of cattle at $55 per head would generate an estimated CFAP2 payment of $27,500.

An 800-head inventory of sheep at $27 per head would generate an estimated CFAP2 payment of  $21,600.

The livestock count eligible for CFAP2 payments for all species is the number of eligible head in inventory on a specific date selected by the producers between April 16 and Aug. 31, 2020.

Breeding stock is not eligible for CFAP2 payments.

Dairy payment rates and calculations

The dairy CFAP2 payments will be calculated in two parts, which will be added together. Part one is the actual certified milk production from April 1 through Aug. 31, 2020 times $1.20 per hundredweight. Part two is the estimated milk production from Sept. 1 through Dec. 31, 2020, based on the daily average production from April 1 to Aug. 31, 2020, multiplied by 1.22. This number is then multiplied by a payment rate of $1.20 per hundredweight.

Example: 1 million pounds of milk was marketed from April 1 to Aug. 31, 2020. Multiplying that number by 1.22 produces an estimated figure of 1.22 million pounds of milk production from Sept. 1 through Dec. 31, 2020. A total of 22,200 hundredweight of production times $1.20 per hundredweight creates a CFAP2 payment of  $26,640.

Payment limits

There is a $250,000 payment limit per individual or entity for all commodities.A corporation or partnership may have payment limits for up to three individuals (for atotal of $750,000) provided they meet eligibility requirements.A person must have an adjusted gross income of less than $900,000 to be eligible. 

Potential CFAP2 payment eligibility will not be impacted by previous payments for CFAP1 or any other government assistance payments previously received in 2020 — including any potential 2019 or 2020 farm program payments. Payments through CFAP are direct payments to producers of crops, livestock and specialty crops and do not have to be repaid.

For more details regarding CFAP2 enrollment and payments, visit the USDA CFAP2 website at www.farmers.gov/CFAP; call the USDA CFAP2 helpline at (877) 508-8364; or visit your local FSA office. Information on CFAP2 program applications, eligible acres, and APH yield calculations are available at local FSA offices. Producers should call their FSA office for details on the application process in their area. For normal field crops, they may be able to accomplish much of the CFAP application process via a phone call with FSA, followed by a subsequent digital signature. 

Kent Thiesse is a government farm programs analyst and a vice president at MinnStar Bank in Lake Crystal, Minn. He may be reached at (507) 726-2137 or kent.thiesse@minnstarbank.com.