USDA recently announced details of a new $14 billion Coronavirus Food Assistance Program, or CFAP 2, that will provide direct payments to help farmers and ranchers struggling with COVID-19-related losses. This second program follows more than $10 billion in support provided to cattle, hog, dairy, non-specialty crop, specialty crop and other producers to offset COVID-19 related losses experienced through mid-April 2020. Sign-up for CFAP 2 runs through Dec. 11 through USDA’s Farm Service Agency county offices.
Of the $14 billion in CFAP 2 support, USDA estimates corn producers will receive $3.5 billion, or 25% of the total CFAP 2 resources. Following corn, beef cattle producers are expected to receive $2.8 billion, or 20% of CFAP 2 funding. Dairy farmers are expected to receive $2 billion, or 14% of the available support. Hog producers are estimated to receive $1.7 billion, or 12% of CFAP 2. Soybean producers are estimated to receive $1.4 billion, or 10% of the funds. Wheat, flat-rate crops, eggs and other commodities are expected to receive $2.5 billion, or 18% of the CFAP 2 support.
CFAP 2 For Crops
Row crops eligible for CFAP 2 include: alfalfa, amaranth grain, barley, buckwheat, canola, corn, extra-long staple cotton, upland cotton, crambe, einkorn, emmer, flax, guar, hemp, indigo industrial rice, kenaf, khorasan, millet, mustard, oats, peanuts, quinoa, rapeseed, rice, sweet rice, wild rice, rye, safflower, sesame, sorghum, soybeans, speltz, sugar beets, sugarcane, sunflowers, teff, triticale and all classes of wheat. Hay, except alfalfa, and crops intended for grazing are ineligible for CFAP 2.
Payments for eligible row crops included in the price-trigger payment category will be equal to the greater of: eligible acres of the crop multiplied by a rate of $15 per acre or eligible acres of the crop multiplied by a nationwide crop marketing percentage, multiplied by a crop-specific payment rate, and then by the producer’s weighted 2020 actual production history approved yield. If the APH is not available, 85% of the weighted 2019 Agriculture Risk Coverage-County Option benchmark yield for that crop will be used.
Essentially, there is a $15-per-acre floor for price-trigger row crops. The effective payment rate for select row crops, defined as the crop marketing percentage multiplied by the crop-specific payment rate, is highlighted in the following figure.
In order to estimate per-acre payments for CFAP 2, national average crop yields from USDA’s most recent World Agricultural Supply and Demand Estimates were multiplied by the effective payment rate. For a corn producer with a weighted average yield of 178.1 bushels per acre, CFAP 2 would provide a payment of more than $41 per acre. Similarly, a wheat grower with a weighted average APH of 50.1 bushels per acre would receive $19.75 per acre in CFAP 2 support. The following figure identifies per-acre CFAP 2 payments for major field crops based on the national average crop yields. Farmers with higher or lower APH would see their CFAP 2 support adjusted accordingly.
Summary
COVID-19-related stay-at-home orders and the closure of restaurants and bars, schools, and other leisure and hospitality sectors has negatively impacted livestock, dairy, crop, specialty crop and specialty livestock producers. To assist these producers, USDA announced two CFAP relief programs with a combined assistance of $30 billion. So far, more than $10 billion in support has been provided in the first package and another $14 billion is now available through Dec. 11. Major row crop producers should expect to receive a per-acre payment that is a function of their farm’s yield. Other crops, such as industrial hemp, ELS cotton, peanuts and grain sorghum, can expect to receive a flat payment of $15 per acre.
