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Coronavirus Food Assistance Program (CFAP)

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[music] Hello, I am SDSU Extension Livestock Business Management Field Specialist Heather Gessner The USDA-Farm Service Agency released information regarding the Corona Virus Food Assistance Program on Tuesday, May 21, 2020

This information has been anticipated by various agriculture producers in South Dakota and across the nation My goal in this presentation is to provide you with the most current information available on the CFAP program in general, provide information on what the application requirements for each covered commodity group, and provide guidance or ideas on what could be used as verification documents As producers work through the CFAP process I encourage them to work with their local FSA staff to ensure all components of the program are followed and completed properly and in a timely manner The Coronavirus Food Assistance Program is one part of the CARES Act, and has two components The one I will cover in this presentation is the direct support to agriculture producers

For your reference, the other component is the Farmers to Families program That program will purchase and distribute agricultural products to those in need The program will purchase $461 million dollars worth of fresh produce, $317 million dollars of dairy products, $258 million dollars worth of meat products and an additional $175 million dollars will be spent on combination boxes purchased for distribution The CFAP payment funds will come from two sources The CARES Act provided $9

5 billion dollars and the Commodity Credit Corporation Charter Act, commonly referred to as CCC provided an additional $65 billion dollars The CARES Act funds were allocated to compensate for losses due to price declines between mid January 2020 and mid April 2020, and for specialty crops that were shipped and spoiled or unpaid product The CCC funds provide compensation for losses due to on-going market disruptions due to COVID-19 More information on the formulas and how the numbers were derived can be found on the CFAP information webpage, www

farmersgov/cfap We are not going to cover that discussion in today’s presentation Enrollment for CFAP opens May 26, 2020 and is available until August 28, 2020 When producers visit their local FSA office they will provide the number of animals, bushels or weights of the animals or products they are signing up However, unlike traditional indemnity programs, this is a self-certification program

Verification documents are not part of the application The producer must keep in mind that spot checks will be done My suggestion to all producers participating in the program create a file with their supporting documents Make copies of the information you used to determine your numbers Prosecution under criminal and civil fraud statutes may occur if there are discrepancies in the verification documents and the amount reported on the application

Questions regarding the funding availability has been a common question regarding the CFAP program One way the program has been created to mitigate the issue of funds running out is to pay the first 80% of the amount to the producer upon application Then, when and if there are funds remaining in the program coffers, the remaining funds will be distributed Keep in mind, that these funds fall under the payment limitations established by USDA The staff at the FSA office can help answer payment limit questions

What other elements are needed? Basically, all the same program eligibility requirements of other USDA programs are in place for CFAP There are six forms, available on the farmersgov website every applicant will need to fill out The basic information includes verification of the members of the farm or ranch, two income forms to verify maximum payment limitations are not exceeded and that the individual’s income comes from farming, ranching and forestry, ensures highly erodible land is not being farmed, basic contact information and a bank information from for direct deposit Those familiar with USDA programs likely have these forms filled out and on file

If you are new to the programs the FSA staff will assist you when you make your application The CFAP program includes payments for Non-specialty crops, livestock, wool, dairy and specialty crops In order to be included in the program, the commodities in each of these categories must have had a 5% or greater price reduction or had losses due to market supply change disruptions due to COVID-19 and face additional significant market costs Let’s cover non-specialty crops first To start, eligible crops include: malting barley, canola, corn, upland cotton, millet, oats, sorghum, soybeans, durum wheat, and hard red spring wheat

Payments for each of those commodities will be based on the January 15, 2020 inventory that was subject to price risk I take this qualifier to mean grain in storage, but not price protected by any type of pricing contract To determine payment, a calculation will be done using 2019 production totals, divided by 2, times the CARES Act rate Another calculation will be done based on the January 15, 2020 inventory times the CCC Rate The payment will be based on the smaller of these 2 amounts

As part of the application, the producer must provide both the 2019 production and the January 15th inventory Sources of verification are not included in the information package I put together a list of items producers may have or be able to get copies of include: crop insurance and FSA documents for 2019, sales receipts, bin measurements, feed records, and invoices for custom harvesting may be some of the documents accepted as production and storage verification This is not an official list, and not guaranteed to be acceptable proof of production or inventory Talk to the staff at your FSA office for additional ideas or preferred documentation

Keeping copies of the information utilized to determine production and inventory in a file will assist the producer if they are chosen for a spot check in the future The payment rates for the commodities varies As mentioned early in the presentation, the funds provided in CFAP are coming from 2 sources For each category and commodity, I am showing the amount available from each source To determine payment, for example: Corn producer applicants will multiply 50% of their 2019 production by 32 cents from the CARES Act and their January 15th inventory by 35 cents from the CCC

The smaller total value will be used to make the payment Moving to the livestock category Livestock producer eligibility includes a statement that the applicant must have an ownership interest in the animals, in addition to the 5% price decline Thus, contract feeders are not eligible for this program Eligible commodities and classes of each are listed on this slide

2 classes of hogs are eligible, those less than 120 pounds, and those over 120 pounds Eligible sheep must be less than 2 years of age And cattle are broken into 5 categories: feeder cattle less than 600 pounds, which includes 2020 spring born calves, feeder cattle greater than 600 pounds, slaughter cattle: fed cattle, slaughter cattle: mature cattle, and then all other cattle that are not dairy Most of these categories are easy to understand based on the weights and ages listed Slaughter cattle: fed cattle, is intended to cover fed cattle that should have gone to market, however, due to market unavailability they were still being held by the producer

The official ruling indicates cattle that on average weigh more than 1400 pounds and yield a carcass 800 pounds or more Those weights may be problematic for heifers on feed as they generally have lighter finished weight than steers, and for regions of the country where finished weights do not traditionally reach 1400 pounds Talk to the FSA Staff to determine the appropriate classification for your animals Slaughter cattle: Mature cattle, is the category for cull bulls and cows All other cattle accounts for cows, breeding bulls, and other unpriced cattle inventory, as long as they are not animals owned for dairy production

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Livestock payments for the categories indicated are going to be based on the sum of the number of animals sold January 15 through April 15, 2020 PLUS the highest inventory number of animals owned between April 16 and May 14, 2020 As part of the application, producers must be able to provide the following information First, the total sales of eligible livestock, by species and class for the January to April time period, and inventory numbers by species and class for the April to May time period Again, there is not official indication of what will be considered valid forms of documentation

I have started a list here to help the thought process Sales receipts for animals sold, inventory records drafted for financial statements, sale catalogs listing animals available for sale, calving and breeding records for cow herd and calf counts, or vet records that indicate the number of animals processed or heifers bangs vaccinated This list is not guaranteed to qualify as documentation, and it is again suggested that all materials used in the determination of the inventory be stored for potential spot checks Payment rates for the livestock classes are listed Each rate is based on a per animal basis

The number of livestock sold between January 15th and April 15th will be multiplied by the CARES Act rate, and inventory on hand April 15 to May 15, 2020 will be multiplied by the CCC rate A cattle example, the number of feeder steers weighing 725, sold March 1st will be multiplied by $139 While the number of cows in the breeding herd on April 20th will be multiplied by $33 Moving to the dairy industry and milk To be eligible for CFAP payments the dairy operation must have had milk production in the first quarter 2020

The payments will include milk that needed to be dumped and excludes any milk production that was priced under a forward contract Payments to dairy producers will be based on the pounds of milk produced in the first quarter 2020 Verification of the amount of milk produced and sold may be relatively easy for some producers Sales receipts will show the required information In instances where milk had to be dumped the records may be harder to provide

Historical production records, cow production records, cow inventories and 3rd party verification of the milk that was dumped may be forms of acceptable documentation Talk with your FSA office about acceptable forms of verification Keep a copy of the documents used during the application process on hand in the case of spot checks The payments for dairy is a bit different than other categories The first part of the payment is based on the first quarter of 2020

Production will be multiplied by the CARES Act payment rate of $471 The second part of the payment again based on the first quarter production TIMES a multiplier adjustment factor That factor is 1014

The adjustment factor, times the CCC payment rate of $147, brings the per hundredweight payment on all milk produced in the first quarter 2020 to $620 As the producer makes calculations on the payment they could receive from CFAP, keep in mind that the $250,000 payment limitation, for a single member operation Wool

Wool production eligibility will be based on any inventory on hand January 15th, that was not forward priced The payment will be based on the smaller of 50% of the 2019 total production, or the unpriced January 15, 2020 inventory Part of the application will need to include 2019 production information as it is the basis of the determination for eligibility Additionally, the amount pounds in inventory on January 15th will also need to be included Depending on the breed of sheep raised, production verification may be easier to come by than for others

Wool breeders may have detailed grading sheets, sales receipts and other documents to verify production Others may need to include invoices from shearing to verify the number of head shorn, scale receipts on the inventory on hand Again, keep in mind the potential for spot checks on the documentation used to determine production and inventory Wool payments will be passed on a per pound rate for grade, clean wool, and non-graded grease wool The last category to cover is the specialty crops area

To be eligible for CFAP payment, specialty crops are broken into 3 categories For the first category, the crop needed to have a 5% or greater price decline during the mid-January to mid-April time period Category 2 applications are for those producers shipped produce but the produce spoiled before market due to the loss of a marketing channel And Category 3 applications are for produce that was harvested but did not leave the farm or mature crops that were unharvested or destroyed due to the loss of marketing channels The specialty crop list is too long to include on one screen, so here are the crops Almonds through Green Onions, and the category they qualify for

And here is the list of eligible specialty crops, Oranges to Watermelons, and the categories they qualify for Payments will only be made to producers that did not have an agreed-upon price through a forward contract, agreement, or similar binding document Items needed by specialty crop growers varies by the category the crop falls under If you grow any of the eligible crops, please make sure you know what kind of verification you need to have Category 1-requires bill of sale that documents the crop, quantity and price received Category 2-for produce that met their contractual obligations for delivery, but did not receive payment for their production, documentation from the buyer explaining non-payment or other records that validate non-payment

Category 3-for those producers that were unable to sell harvested crops, or had to destroy crops in the field do not have specific items listed to verify production and losses The list of records I have listed are not FSA approved or guaranteed to be accepted As I do not have experience with specialty crops production, my understanding of the resources available to the producer is limited Please work with your local FSA office to ensure you are able to best represent the crop you grow Payment rates for each category of loss varies

Recall the list of specialty crops we looked at earlier, as that determines the rate production will be multiplied by to determine payment This list covers Almonds through Romaine Lettuce Here is the list Mushrooms through Watermelons The program rules specifically exclude some commodities I have listed those on this slide

Excluded commodities include, sheep more than 2 years old, eggs/layers, soft and hard red winter wheat, white wheat, rice, flax, rye, peanuts, feed barley, extra long staple cotton, alfalfa, forage crops, hemp, and tobacco As we went through the list of commodities covered, your commodity may not be listed USDA is open to considering additional crops If you believe your commodity has had a 5% or greater price decline between January and April 2020, and face additional marketing costs due to COVID-19, please visit the farmersgov/cfap website

There is an official link to submit information and comments There is a lot of information available from commodity groups, extension, and everyone in between The official webpage for the program is wwwfarmersgov/cfap

I found the site very easy to navigate for each of the categories we have listed Sources of information for this presentation The 2 websites are publically available and easy to navigate I would encourage you to visit them Thank you for following along today

This is a trying time, and one that also has brought out the best in a lot of people I hope you have encountered those individuals if you needed them Here is my contact information, including my FaceBook page If you would like to follow that, please do Please let me know if you have questions

I do not promise to know all the answers, but I promise to help you find someone that knows the answer to your questions [music]

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