- May 20, 2020
- Posted by: Daniel Lefstad
- Category: News
Sign up for the CFAP (Coronavirus Food Assistance Program) at FSA is set to begin this coming Tuesday, May 26th, and go through August 28th.
- The first round of the program is not to exceed $16 billion – you may want to try and get your application in sooner rather than later
- Producers will receive 80% of their max payment upon application approval – with the additional 20% to be paid out if sufficient funds remain.
- Producers will be paid based on inventory subject to price risk* held as of January 15, 2020. The payment will be made based on 50% of a producers 2019 total production or the 2019 inventory as of January 15, 2020, whichever is smaller, multiplied by the commodity’s applicable payment rates.
*At this time there is a lot of confusion what price risk actually entails – does it include any hedges in place, basis contracts, HTA’s, options, etc. As you can imagine proving exactly what was where and what was priced vs. unpriced could entail a significant amount of paperwork/headaches at FSA. The rule says “self certified” – not sure what the audit situation will be.
- CFAP payments are subject to a per person and legal entity payment limitation of $250,000. Unlike other FSA programs, special limits apply to corporations, limited liability companies, and limited partnerships. These corporate entities will have a total limit of $750,000 with up to 3 shareholders eligible for the $250,000 limit.
- AGI limits do not apply if 75% of adjusted gross income comes from farming and ranching.
- Producers must comply with Highly Erodible Land and Wetland Conservation provisions.
- Non-specialty crops included are barley, canola, corn, oats, soybeans, sunflowers and durum and spring wheat. Payment rates for some of our common crops are listed below:
- Spring Wheat = 19 cents per bushel
- Soybeans = 47.5 cents per bushel
- Corn = 33.5 cents per bushel
- Payment example – you produce 10,000 bushels of corn in 2019. All bin stored on Jan. 15th – you would take 50% of that = 5000 bushels X crop rate ($0.335) = Payment of $1,675
- You would receive 80% initially = $1340
- Livestock producers with hogs, cattle, and sheep are also eligible for CFAP assistance. See link below for additional details on eligible types/payment per head.
CFAP -Non-Specialty Crops Info
CFAP – Livestock
Payment & Application Example Video