As you have probably heard, the USDA Farm Service Agency is administering a payment program for COVID-19 related losses associated with certain crops and livestock.
The Coronavirus Food Assistance Program (CFAP) opened up on May 26 for applications and will close on August 28, 2020. Applications can be submitted by phone or email at Farm Service Agency county offices across the country. Producers can find their local FSA office, and much more CFAP information, at www.farmers.gov/cfap. In addition to the CFAP application, a producer may need to submit forms and documentation to determine their eligibility for the program and agree to basic conservation requirements, which are required for all USDA programs. There is also a form for direct deposit. Anyone who used the drought program (Livestock Forage Program, or LFP) in 2014 or other years will be familiar with the process.
Once a producer’s total CFAP payment is calculated, they will receive a direct deposit for 80% of that payment relatively quickly. However, the remaining 20% will only be paid if enough funds are available. This assures that CFAP funds are spread across as many eligible livestock and crop producers as possible. Let’s be frank, $16 billion sounds like a lot of funds until you consider how much production of livestock, crops and specialty crops it is being spread across.
Let’s break down the payments for cattle producers further. First, producers will need to know their sales and their inventory. USDA is allowing both to be self-certified but have your documentation on hand and be prepared to produce it if asked. Cattle producers that sold cattle between January 15 and April 15 are eligible for a payment out of the CARES Act funds, provided those cattle were unpriced. USDA defined ‘unpriced cattle’ as those cattle that were ‘not subject to an agreed-upon price in the future through a forward contract, agreement, or similar binding document’. However, if you had another risk management instrument such as a Livestock Risk Protection (LRP) or put option in place the cattle are still eligible sales under CFAP.
If you did not have any sales in that window, then you may still be eligible for receiving a payment on the highest daily inventory between April 16 and May 14 out of CCC funds. Again, this is a self-certified inventory. Cattle producers will receive $33/head for that inventory.
Also, pay attention to the definitions of each category of cattle to sort them into the correct boxes. All of the breeding herd falls into ‘all other cattle’. Cull cows and bulls fall into ‘slaughter cattle – mature’. Calves, including unweaned calves, fall into ‘feeder cattle under 600 pounds’. Stockers you may have sold will fall into one of the two feeder cattle categories, depending on their weight. Fed cattle with average weights until 1400 pounds fall into ‘feeder cattle 600 pounds or greater’ for now, although that definition is under review.
This program allows producers to offset market losses for those cattle that still had risk exposure during the 2020 market decline. Don’t let the process scare you off, many producers have reported that, once they had their numbers in hand, it didn’t take long to apply. Get your application in as soon as possible.
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