By Chris Clayton
DTN Ag Policy Editor
DTN Political Correspondent
GLENWOOD, Iowa (DTN) -- USDA is set to begin accepting applications Tuesday from crop growers and livestock producers for $16 billion in aid under the Coronavirus Food Assistance Program (CFAP).
Cattle producers who typically do not receive direct federal aid have had more questions about enrolling in the program. Leadership from the U.S. Cattlemen's Association held a question-and-answer session Friday evening on Facebook to discuss the CFAP and some of the shortfalls in the program for cattle producers.
"It definitely falls short and leaves us scratching our heads why things are the way they are," said Justin Tupper, USCA's vice president and a South Dakota cattle producer.
County FSA offices are open by phone-call appointment only due to the coronavirus pandemic, but application forms are supposed to be available online "once signup begins," USDA said in a news release last week.
"The FSA is not equipped to handle all of these ranchers they are going to get Tuesday morning," Tupper said. He added, "There is going to be a cumbersome process as we get this thing started."
CFAP pays cattle producers $214 a head for fat cattle sold from Jan. 15 to April 15. Feeder cattle sold at that time are split at 600 pounds with those over that weight receiving $139 a head and those under receiving $102 a head. Slaughter cows and bulls are paid $92 a head and all other cattle sold at that time are worth $102 a head. Under the rules, any cattle sold during the Jan. 15 to April 15 timeframe should be eligible for payment, but producers will have to provide some documentation of the sale.
Unpriced cattle in inventory from April 16 to May 14 receive a flat rate from the Commodity Credit Corp. of $33 a head. Producers are expected to pick a date in that timeframe when their inventory was highest. From the reading of the program rules, that inventory count should include spring calves, Tupper said.
Brett Crosby of Custom Ag Solutions in Cowley, Wyoming, said on the USCA event that the decision to pick Jan. 15 as the start date for the program is confusing because the cattle market really did not begin to negatively react to COVID-19 until closer to mid-March. From Jan. 15 to March 15, fed cattle were averaging $122 per cwt, he noted.
Yet, the inventory price of $33 a head starting April 16 coincides with when cattle feeders actually could not begin to move their cattle to slaughter. Cash bids in a lot of places were halted, Crosby noted, and fed-cattle prices fell to an average of $105 per cwt. For roughly three weeks straight, 91% of all cattle slaughtered were sold on formula "and the cash trade was left out in the cold," Crosby said.
On the $250,000 payment limit, Tupper said USCA leaders were "semi-comfortable" that this will provide help to smaller and medium feedlots. Crosby noted though, that a 12,000-head feedlot would market roughly 3,000 head each quarter, and feedyards were losing roughly $400 a head. This could lead to potentially $1 million in losses.
There were also questions over why USDA chose to split the feeder cattle values at 600 pounds, but the assumption was that the department was trying to keep the program simple for FSA staff who have to administer it.
For hog producers, pigs sold from Jan. 15 to April 15 have a payment rate of $28 a head while hogs sold during that time have a payment rate of $18 a head. Unsold hog and pigs in inventory from April 16 to May 14 have a payment rate of $17 a head.
Under CFAP, once USDA determines a producer's payment, USDA will make a payment of up to 80% of the total within a week. Another 20% will be held back for later in the summer.
Producers of all eligible commodities will apply through their local FSA office. Documentation to support the producer's application and certification may be requested. FSA has streamlined the signup process to not require an acreage report at the time of application, and a USDA farm number may not be immediately needed. Applications will be accepted through August 28.
Producers will also have to certify they meet the Adjusted Gross Income limitation of $900,000 unless at least 75% or more of their income is derived from farming, ranching or forestry-related activities. Producers must also be in compliance with Highly Erodible Land and Wetland Conservation provisions.
Commodities that did not suffer a 5% or greater price decline from mid-January 2020 to mid-April 2020 are not eligible for CFAP. Specifically, this includes sheep more than two years old, eggs/layers, soft red winter wheat, hard red winter wheat, white wheat, rice, flax, rye, peanuts, feed barley, Extra Long Staple (ELS) cotton, alfalfa, forage crops, hemp, and tobacco. USDA may reconsider the excluded commodities if credible evidence is provided that supports a 5% price decline.
Producers who have issues with the structure of the program can still weigh in through the federal-rulemaking portal or by mail through June 22. Go to www.regulations.gov and search for Docket ID FSA-2020-0004. Follow the instructions for submitting comments. For mail, send to Director, SND, FSA, U.S. Department of Agriculture, 1400 Independence Avenue SW, Stop 0522, Washington, DC, 20250-0522.
More information on the CFAP, including ways to sign up, can be found at: www.farmers.gov/cfap
USDA also has produced a video for signing up on-line: https://www.youtube.com/…
Chris Clayton can be reached at Chris.Clayton@dtn.com
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Follow him on Twitter @hagstromreport
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