*Information current as of September 18, 2020

On September 17, President Donald Trump and U.S. Secretary of Agriculture Sonny Perdue announced plans for USDA to provide additional assistance to farmers and ranchers who have seen significant market disruption due to the COVID-19 pandemic. The details of the up to $14 billion program are below. CFAP 2 differs in many ways from the original CFAP so please examine the program details before signing up. Signup for CFAP 2 will begin Monday, September 21 and run through December 11, 2020. Additional information and application forms can be found at www.farmers.gov/cfap.

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    • Producers can apply for CFAP 2 at USDA’s Farm Service Agency (FSA) county offices. To find your local FSA office, please visit https://www.farmers.gov/service-center-locator.
    • CFAP 2 payments will be made for three categories of commodities – Price Trigger Commodities, Flat-rate Crops, and Sales Commodities.
    • Signup for CFAP 2 will begin on September 21 and run through December 11, 2020.
    • Any individual or legal entity who shares in the risk of producing a commodity may apply for CFAP 2.
    • Producers must be in the business of farming at the time of submitting their application to be eligible.
    • Contract growers who do not share in the price risk of production are ineligible.
    • Producers can apply for assistance for only commercially produced commodities.

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    • The total CFAP 2 payment that a person or legal entity may receive, directly or indirectly, through attribution of payments, is $250,000. As this is a separate program, this payment limitation is separate from the CFAP 1 payment limit. This limitation applies to the total amount of CFAP 2 payments made with respect to all eligible commodities.
    • The total amount of CFAP 2 payments made to a legal entity – such as to a corporation, limited liability corporation, limited partnership, trust, or estate – is $250,000; except if:
      •  two different members of the legal entity each provide at least 400 hours of active personal labor, active personal management, or combination thereof with respect to the production of 2020 commodities, then an entity may receive up to $500,000.
      • three different members of the legal entity each provide at least 400 hours of active personal labor, active personal management, or combination thereof with respect to the production of 2020 commodities, then an entity may receive up to $750,000.
    • Although the payment limitation is increased for the corporation, LLC, LP, trust, or estate, each members’ payment limitation (received directly or indirectly) remains subject to the $250,000 individual person payment limit.
    • These payment limit provisions are different from and separate from the payment limitations established by the 2018 Farm Bill.
    • To be eligible for payments, a person or legal entity must have an average adjusted gross income of less than $900,000 for tax years 2016, 2017, and 2018. However, if 75 percent of their adjusted gross income (AGI) comes from farming, ranching, or forestry-related activities, the AGI limit of $900,000 does not apply and the person or legal entity is eligible to receive CFAP 2 payments up to the applicable payment limitation.

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    • Row Crops of Note: Alfalfa, Corn, Hemp, Millet, Oats, Rye, Sorghum, Soybeans, Sugar Beets, Sunflowers, and All Classes of Wheat *Not a complete list
      • Forage soybeans and forage sorghum are not eligible for CFAP 2.
      • Hay, except alfalfa, and crops intended for grazing are ineligible for CFAP 2 and will not receive a CFAP 2 payment. Crops with intended uses of green manure and those left standing are also not eligible.
    • Livestock: Beef Cattle, Hogs/Pigs, and Lambs/Sheep
      • All equine, animals raised for breeding stock, companion or comfort animals, pets, and animals raised for hunting or game purposes are not eligible for CFAP 2
    • Dairy: Both cow and goat milk are eligible for CFAP 2
    • Other: Specialty Livestock and Crops, Floriculture and Nursery, Aquaculture, Broilers and Eggs, Tobacco, and Wool
    • For CFAP 2 information for these commodities please visit www.farmers.gov/cfap

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  • CFAP 2 payments are available for eligible producers of row crop commodities categorized as either price trigger commodities or flat-rate crops.

    • Price Trigger Commodities
      • Suffered a five percent-or-greater national price decline between the average prices for the weeks of January 13-17, 2020, and July 27-31, 2020.
      • Price Trigger Commodities of note include: Corn, Sorghum, Soybeans, Sunflowers, and All Classes of Wheat *Not a complete list
      • Payment Calculations
        • Payments for eligible row crops included in the price trigger payment category will be equal to the greater of:
          1. Eligible acres of the crop multiplied by a rate of $15 per acre; OR
          2. Eligible acres of the crop multiplied by a nationwide crop marketing percentage, multiplied by a crop-specific payment rate, and then by the producer’s weighted 2020 Actual Production History (APH) approved yield. If the APH is not available, 85 percent of the weighted 2019 Agriculture Risk Coverage-County Option (ARC-CO) benchmark yield for that crop will be used. *See table below for marketing percentages and payment rates for each crop in this category.
    Commodity Unit of Measure Crop Marketing Percentage (%) Payment Rate ($/Unit)
    Corn Bushel 40 $.58
    Sorghum Bushel  55 $.56
    Soybeans Bushel 54 $.58
    Wheat (All Classes) Bushel 73 $.54

    Possible Producer Question

    Are seed commodities eligible for CFAP 2?
    Answer from USDA: Seed commodities are eligible if the underlying commodity is eligible and at the underlying commodity payment category and rate. For example, seed potatoes and asparagus seed are covered under the sales approach while seed corn is a price trigger commodity. Clover seed is not eligible since the underlying commodity is not eligible.

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  • Livestock eligible for CFAP 2 includes: beef cattle, hogs and pigs, and lambs and sheep. Additional specialty livestock commodities are also eligible, as described on farmers.gov/cfap/specialty-livestock.

    CFAP 2 payments are available for eligible producers of livestock commodities categorized as price trigger commodities. Specifically, price trigger commodities suffered a five percent-or-greater national price decline in a comparison of the average prices for the week of January 13-17, 2020, and July 27-31, 2020. For beef cattle, hogs and pigs, and lambs and sheep, payments will be equal to the highest owned inventory of eligible livestock, excluding breeding stock, on a date selected by the eligible producer from April 16, 2020, through August 31, 2020, multiplied by the Commodity Credit Corporation (CCC) payment rate.

    • For beef cattle, payments will be equal to:
      • The producer’s maximum owned inventory of eligible beef cattle, excluding breeding stock, on a date selected by the producer from April 16, 2020, through August 31, 2020,
      • Multiplied by the number of payment limitations for the producer, multiplied by the payment rate of $55 per head.
    • For hogs/pigs, payments will be equal to:
      • The producer’s maximum owned inventory of eligible hogs and pigs, excluding breeding stock, on a date selected by the producer from April 16, 2020, through August 31, 2020,
      • Multiplied by the number of payment limitations for the producer, multiplied by the payment rate of $23 per head.
    • For lambs and sheep, payments will be equal to:
      • The producer’s highest owned inventory of eligible lambs and sheep, excluding breeding stock, on a date selected by the producer from April 16, 2020, through August 31, 2020,
      •  Multiplied by the payment rate of $27 per head.

    Possible Producer Questions

    Why isn’t breeding stock eligible for CFAP 2?
    Answer from USDA: The payments to livestock are focused on market inventory because there are limited funds available for CFAP 2 and the Commodity Credit Corporation (CCC) authority that fully funds the program is meant to assist with costs associated with market disruptions. Breeding stock is typically kept for many years and therefore their value is less likely to be impacted by temporary price impacts. Non-breeding animals are more likely to be sold and therefore more likely impacted by market value changes.

    Are animals that have been depopulated because of the impact of COVID-19 on processing facilities included in CFAP 2?
    Answer from USDA: Animals that are a part of a producer’s inventory on the date he/she chooses are eligible for a CFAP 2 payment.

    Are “replacement stock intended for breeding” cattle, hogs/pigs, sheep, and other livestock eligible?
    Answer from USDA: Yes. All females that have not produced offspring and males who have not started breeding females are eligible for inclusion in inventory. Breeding stock such as cows, bulls, sows, boars, ewes, and rams are not eligible for CFAP 2. Culled cows are also not eligible for CFAP 2.

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  • Dairy operations applying for CFAP 2 must be in the business of producing and commercially marketing milk at the time of application. Dairy operations that dissolve or have dissolved on or after September 1, 2020, are eligible for a prorated payment for the number of days the dairy operation commercially markets milk from September 1, 2020, through December 31, 2020. Dairy operations that dissolved before September 1, 2020, are ineligible for CFAP 2 payments.

    • Cow Milk Payment Details
      • Cow milk will be eligible for CFAP 2 as a price trigger commodity and payments will be equal to the sum of the following:
        • The producer’s total actual milk production from April 1, 2020, to August 31, 2020, multiplied by the payment $1.20 per hundredweight; AND
        • The producer’s estimated milk production from September 1, 2020, to December 31, 2020, based on the daily average production from April 1, 2020, through August 31, 2020, multiplied by 122, multiplied by a payment rate of $1.20 per hundredweight.

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  • Row Crops

    Payments for row crops included in the price trigger payment category will be equal to the greater of:

    1. Eligible acres of the crop multiplied by a rate of $15 per acre; OR
    2. Eligible acres x nationwide crop marketing percentage x crop-specific payment rate x 2020 Actual Production History (APH)

    Price Trigger Commodities

    EXAMPLE 1.

    A York Co. farmer with 1000 total irrigated acres divided evenly between corn and soybeans with APHs of 200 bushels for corn and 50 bushels for soybeans could expect the following payment:

    Corn
    500 acres x 40% (crop marketing percentage) x $.58 (corn payment rate) x 200 bu/acre (APH)
    Payment: $23,200 ($46.40 per acre)

    Soybeans
    500 acres x 54% (crop marketing percentage) x $.58 (soybean payment rate) x 50 bu/acre (APH)
    Payment: $7,830 ($15.66 per acre)

    Total Payment: $31,030 ($31.03 per acre)

    EXAMPLE 2.

    A Red Willow Co. farmer with 2000 acres of wheat with an APH of 60 bushels could expect the following payment:

    Wheat
    2000 acres x 73% (crop marketing percentage) x $.54 (wheat payment rate) x 60 bu/acre (APH)

    Total Payment: $47,304 payment ($23.65 per acre)

    Potential Payment Charts

    APH Yield Corn Sorghum
    100 $23.20/acre $30.80/acre
    120 $27.84/acre $36.96/acre
    140 $32.48/acre $43.12/acre
    160 $37.12/acre $49.28/acre
    180 $41.76/acre $55.44/acre
    200 $46.40/acre $61.60/acre
    220 $51.04/acre $67.76/acre
    240 $55.68/acre $73.92/acre
    260 $60.32/acre $80.08/acre
    280 $64.96/acre $86.24/acre

    APH Yield Soybeans Wheat
    20 Minimum $15/acre Minimum $15/acre
    30 Minimum $15/acre Minimum $15/acre
    40 Minimum $15/acre $15.77/acre
    50 $15.66/acre $19.71/acre
    60 $18.79/acre $23.65/acre
    70 $21.92/acre $27.59/acre
    80 $25.06/acre $31.54/acre
    90 $28.19/acre $35.48/acre
    100 $31.32/acre $39.42/acre
    110 $34.45/acre $43.36/acre
    120 $37.58/acre $47.30/acre
    130 $40.72/acre $51.25/acre

    Flat-Rate Commodities

    EXAMPLE 3.

    A Scotts Bluff Co. farmer has 500 acres of sugar beets and 50 acres of alfalfa.

    Sugar Beets
    500 acres x $15/acre = $7,500 payment

    Alfalfa
    50 acres x $15/acre = $750 payment

    Total Payment: $8,250

    Livestock and Dairy

    Livestock payments are calculated by taking the maximum number owned between April 16th-August 31st (excluding breeding stock) multiplied by $55 per head (Cattle) and/or $23 per head (hogs).

    Dairy payments are calculated by taking the producer’s actual milk production from April 1-August 31st, multiplying it by $1.20 per hundredweight then adding that to the producer’s estimated production from September 1st-December 31st (based on the earlier actional production number), multiplying it by 122 and then multiplying that by a payment rate of $1.20 per hundredweight.

    EXAMPLE 4.

    A rancher with 200 cow-calf pairs and 10 bulls. The calves were all born between March 1st and May 15th.

    Cattle
    200 calves x $55

    Total Payment: $11,000

    *Breeding stock is excluded from the program so the 200 head of cows and 10 bulls are not counted.

    EXAMPLE 5.

    A hog operation with two owner/operators and 15,000 head (highest total between April 16th and August 31st) of both small pigs and market ready hogs.

    Hogs
    15,000 head x $23

    Total Payment: $345,000

    *CFAP 2 has a payment limit of $250,000, however this operation would receive the full amount as they have two owners who provide at least 400 hours of active personal labor and/or personal management for the production of the hogs.

    EXAMPLE 6.

    A dairy with 250 head of cows which average 75lbs of milk per day.

    Dairy
    Total production between April 1st and August 31st
    250 head x 75lbs x 153 days = 2.850 million pounds produced (28,500/hundredweight)

    28,500/hundredweight x $2.16 per hundredweight

    Total Payment: $61,965

    *AFBF created a simplified equation that simply takes the April 1st through August 31st production (per hundredweight) and multiplies it by $2.16. This simplification is possible given the projected production is based upon the actual production from April 1st-August 31st.

    To access USDA’s CFAP 2 payment calculator tool, please visit www.farmers.gov/cfap.

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  • Q: I see that breeding livestock is excluded from the CFAP 2 program. Does this include replacement animals?
    A: Breeding livestock (bulls, cows, boars, sows, ewes, rams, etc.) are excluded from the CFAP 2 program. However, replacement livestock would be included in the program. Replacement bulls, heifers, boars, gilts, ewe lambs, ram lambs, etc. that have not birthed, or sired offspring would be eligible under the program guidelines.

    Q: Why am I having trouble getting my APH to transfer over to FSA as my payment is being calculated using the 85% of the weighted ARC-CO benchmark yield which is lower than my APH. Also, can I use the ARC-CO benchmark yield if it is higher than my APH?
    A: The first issue may happen when the individual listed as the primary policyholder on the crop insurance policy covering the crop is not the same person as the CFAP 2 applicant. Instead they are listed as a secondary policy holder or an SBI (Substantial Business Interest). At this time, the figure to be used in the payment calculation process (APH vs. ARC-CO) is not something that can be selected by the producer, and FSA County Committees have no authority to change the yield that is automatically populated on the CFAP 2 application. The formula, which is specified in the federal regulation, calls for the use of the weighted 2020 APH approved yield first, with the use of the 2019 ARC-CO benchmark yield second, when APH information is not available.

    Q: How is popcorn treated under the program?
    A: Popcorn is treated as a type of “corn,” thus you would use the same formula as “corn” to determine your payment.

    Q: If I already signed up for the original CFAP do I need to sign up again for CFAP 2?
    A: Yes. CFAP 2 is a separate and distinct program so producers will need to sign up for the new program at their local FSA office before December 11, 2020.

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