On Tuesday, May 20, 2020, the USDA released the details of the Coronavirus Food Assistance Program (CFAP) direct payments. Read the Information Letter from Dairy Markets and Policy that provides a concise, yet comprehensive, explanation of the USDA rule.
The bottom line is this. The initial payment to producers will be $4.96/cwt. for first quarter 2020 production with up to another $1.24/cwt. to be paid later depending on the availability of funds. Payments per dairy will be capped at $250,000 per owner/partner, with a maximum of 3 owners/partners.
The math works as follows:
- $4.71/cwt. for quarter 1 production, plus
- $1.47/cwt. for approximate quarter 2 production. Quarter 2 production is estimated to be quarter 1 production plus 1.4%.
- Initial payments from combined steps 1 and 2 will be paid at 80%, with the remaining 20% to be paid later if funds are available after all initial payments are made.
- (($4.71 + ($1.47 * 1.014)) * 80% = $4.96 for initial payment
- (($4.71 + ($1.47 * 1.014)) * 20% = $1.24 later payment
Other important points include:
- Signup with FSA offices runs from May 26th through August 28th. Applications and other documentation can be submitted in person, by mail, via e-mail or fax.
- Producers have 60 days from the date the application is signed to submit the required documentation. Payment will not be made until document requirements are met.
- Milk marketing volume data from first quarter 2020 will be required.
- For the purpose of additional partners qualifying for an individual payment cap, “significant contribution” of labor or management to the operation is defined as a minimum of 400 hours/year.
- Producers must be in compliance with USDA Highly Erodible Lands and Wetlands Conservation regulations.
- Animals raised for breeding purposes and those not used for milk production or intended to be used for milk production meet the definition of cattle for payments under that commodity.
Additional information is currently available online at: www.farmers.gov/cfap
If you have questions, please do not hesitate to contact Erick Metzger or Drew Duncan at email@example.com or by phone.