Focus on Ag: CFAP2 payment details announced

Kent Thiesse
Farm Management Analyst and Vice President, MinnStar Bank

The U.S. Department of Agriculture has announced details for enrollment for the second round of payments for the Coronavirus Food Assistance Program, also known as 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 that many producers have already received for crops, livestock, and specialty crops.

Following is a brief overview of sign-up details and payment calculations for the CFAP2 payments:

CFAP Enrollment: 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 online. The CFAP application tool and forms will be available at www.farmers.gov/CFAP.

Other CFAP2 requirements: For producers that 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 that are 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 and upland 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 is based on the price decline from mid-January until late July, 2020, times 80% (.80), which is then multiplied by the percentage of the 2020 crop that is expected to be marketed by year-end.

Following are the approximate final payment rates for common crops:

Corn: $.58 per bushel times 40% = $.23 per bushel.

Soybeans: $.58 per bushel times 54% = $.31 per bushel.

Wheat: $.54 per bushel times 73% = $.40 per bushel.

Barley: $.54 per bushel times 63% = $.34 per bushel.

Sorghum: $.56 per bushel x 55% = $.31 per bushel.

Sunflowers: $.02 per pound x 44% = $.009 per pound.

CFAP2 Crop payment calculations

Payments for field crops will be based on the 2020 crop acres that were certified at FSA offices. Crop yields will be the “weighted” average APH yield for all farms included in a FSA farm unit. Farms without APH yield data will use the County ARC-CO benchmark yield times 85%. The minimum payment rate for all field crops, including all “flat rate” crops, is $15 per acre.

CFAP2 crop payment examples

Corn: 500 acres x 180 Bu./A. APH times $.23/Bu. = $20,700 CFAP2 payment (est.).

Soybeans: 500 acres x 50 Bu./A. APH times $.31/Bu. = $7,750 CFAP2 payment (est.).

CFAP2 Livestock payment rates and calculations

Hogs: $23 per head times 5,000 head inventory = $115,000 CFAP2 payment (est.).

Cattle: $55 per head times 500 head inventory = $27,500 CFAP2 payment (est.).

Sheep: $27 per head times 800 head inventory = $21,600 CFAP2 payment (est.).

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.

Breeding stock is not eligible for CFAP2 payments.

CFAP2 Dairy payment rates and calculations

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

For example, 1 million pounds of milk marketed from April 1 to Aug. 31; 1.22 million pounds of milk production estimated from Sept. 1 through Dec. 31 — 22,200 cwt. of production times $1.20 per cwt. = $26,640 CFAP2 payment.

Payment Limits

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

Other details on the CFAP2 payments: Potential CFAP 2 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.

More information

USDA CFAP2 website: www.farmers.gov/CFAP

  • USDA CFAP2 helpline: 877-508-8364

Local FSA Offices:

  • 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.
  • For additional information contact Kent Thiesse, farm management analyst and senior vice president, MinnStar Bank, Lake Crystal, Minn., at (507) 381-7960 or kent.thiesse@minnstarbank.com, or visit
www.minnstarbank.com

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Kent Thiesse