Farms.com Home   News

What Dairy Farmers Need to Know About the Coronavirus Food Assistance Program

If you are a dairy farmer whose operation has been directly impacted by coronavirus, you are likely to be eligible for direct support through USDA’s Coronavirus Food Assistance Program (CFAP). CFAP provides support to producers who have suffered a five percent-or-greater price decline due to COVID-19.
 
USDA is accepting applications now through August 28, 2020. Call and set up an appointment with your local USDA Farm Service Agency (FSA) office to determine your eligibility and to apply for this assistance. Due in large part to the efforts of our staff, the USDA has raised the initial proposed payment limit for the program, and allowed farmers using other risk management tools this year, such as the DMC, to also receive payments through the CFAP.
 
AVAILABLE SUPPORT
 
For dairy, a single payment will be made derived from two funding formulas intended to calculate losses caused by the coronavirus in 2020.  The first and larger component is calculated from a producer’s certification of milk production for the first quarter of calendar year 2020 multiplied by $4.71 per hundredweight. The second component of the payment is based on a 1.4% increase in that first quarter production, multiplied by $1.47 per hundredweight. Overall, the payment amounts to $6.20/cwt. for a farm’s production in January through March of this year.
 
We have asked USDA to consider whether seasonal producers can divide their annual production by four to obtain their production base, as the winter months of the first quarter tend to feature lower production.
 
Dairy farmers are also eligible for payments on cull cows, steers, and feed crops. Click here for a full list of eligible commodities and payment rates. Cull dairy cows are eligible for payment under the category of “Slaughter Cattle: Mature Cattle”.
 
USDA will make an initial payment of 80 percent of an eligible participant’s benefit. By issuing initial payments, FSA can quickly provide assistance to eligible participants while ensuring that overall CFAP payments do not exceed the $16 billion funding limit. The remaining portion of a farmer’s payment will be paid at a later date as funds remain available.
 
ELIGIBILITY
 
All dairy operations with milk production in January, February, and/or March 2020 are eligible for CFAP payments. Any dumped milk production during those months is also eligible for assistance. Milk production enrolled in risk management programs, such as Livestock Gross Margin (LGM), Dairy Revenue Protection (DRP), Dairy Margin Coverage (DMC) or forward contracts, also qualifies for CFAP payments. Producers must complete all CFAP application forms and provide required documentation. Applications will be accepted through August 28, 2020.
 
PAYMENT LIMITATIONS
 
CFAP payments are subject to a per person and legal entity payment limitation of $250,000. This limitation applies to the total amount of CFAP payments made with respect to all eligible commodities.
  • Corporate entities (including limited liability companies and limited partnerships) may receive up to $750,000 based upon the number of shareholders (not to exceed three shareholders) who are contributing substantial labor or management with respect to the operation of the corporate entity.
  • A corporate entity may receive more than $250,000 in CFAP payments if the applicant, under penalty of perjury, self-certifies that two or three members of the corporation each provided at least 400 hours of active personal labor or active personal management or combination thereof with respect to the production of 2019 commodities for which an application or applications are made.
  • A person or legal entity, other than a joint venture or general partnership, is ineligible for payments if the person’s or legal entity’s average adjusted gross income (AGI), using the average of the adjusted gross incomes for the 2016, 2017 and 2018 tax years, is more than $900,000, unless at least 75 percent of that person’s or legal entity’s average AGI is derived from farming, ranching, or forestry-related activities. With respect to joint ventures and general partnerships, this AGI provision will be applied to each member of the joint venture and general partnership.
 
Click here to see more...