USDA Releases Details on New Round of CFAP Payments

USDA Releases Details on New Round of CFAP Payments – Agriculture Secretary Sonny Perdue today announced information on the second round of Coronavirus Food Assistance Program payments that will provide up to an additional $14 billion dollars in aid for agricultural producers because of losses generated by the COVID-19 pandemic.

Farmers can sign up for the new payments, dubbed CFAP Version 2.0, starting Monday at their USDA Farm Service Agency county office. More details are available at the USDA CFAP website, but here are the highlights for the dairy community:

  • The dairy payment will amount to $1.20/cwt. on a farm’s production during the last nine months of 2020. Dairy payments will be based on actual milk production from April 1 to Aug. 31, 2020. Milk production for Sept. 1, 2020, to Dec. 31, 2020, will be estimated by FSA, using daily average production from the April-August base period of known production.
  • The payment limit of $250,000 per person or entity applies for CFAP 2.0, as it did for the first round, but payments in this second round will be considered separate from previous payments made this spring under CFAP round 1.0 for purposes of the $250,000 limit.
  • We are disappointed the department has continued to include payment limits on this disaster assistance, because this restriction results in an inequitable treatment of larger farms.
  • One of the changes we advocated for that has been made is the application of direct attribution is modified so that payment limits will not be reduced based on ownership shares, providing more equitable support to dairy farmers of various ownership structures. Previously, each owner’s share of the operation was applied to the payment limitation, not to the overall CFAP payment to which the operation is entitled. NMPF had raised this concern multiple times with USDA. Fortunately, today’s announcement addresses our concern, which will help to maximize payments under the current payment limit structure.
  • Due to NMPF’s persistent lobbying of Congress and USDA about payment restrictions affecting farms held in family trusts, this version’s payment limitation provision has been expanded to include trusts and estates for both CFAP 1.0 and 2.0, meaning those who were disadvantaged by restrictive trust-related payment interpretations in the first round will have their situation resolved for that round, as well as Version 2.0.
  • 100% of the payment will be made once a farm’s eligibility is determined, meaning there will be no 20% holdback as there was with Round 1.0.
  • For dairy beef, producers are eligible for cattle inventory payment on bull calves and dairy steers, but not for breeding stock. The beef payment is $55/hd. on eligible cattle in inventory on a date selected by the producer between April and the end of August.
  • Producers must also be in compliance with Highly Erodible Land and Wetland Conservation provisions.
  • For existing FSA customers, including those who participated in CFAP 1.0, many documents are likely already on file. Producers should check with their FSA county office to see if any of the forms need to be updated.

As we noted in our news release today, this latest round of CFAP resources is not going to address the needs of every dairy farmer, but it will help bolster the safety net as we enter the fall and winter months. Particularly because it is looking more doubtful that Congress will pass an additional stimulus bill prior to the election, agricultural producers should take advantage of the second round of CFAP payments, as there may not be additional monies devoted to agriculture for the foreseeable future. The first CFAP round has paid farmers $9.9 billion, with dairy farmers receiving more than $1.7 billion of that sum.

USDA Awards New Foodbox Contracts As Program Draws GAO Scrutiny – The USDA this week awarded $1 billion in contracts for its third round of the Farmers to Families Foodbox program. This is the third installment of efforts by USDA to fund the distribution of dairy and other foods to needy Americans. Earlier this summer, we reiterated to USDA that in the third round, vendors need to provide cheese and butter, along with milk and other dairy goods, to recipients. To date, vendors have delivered more than 90 million food boxes. The third round of deliveries will run through October 31, 2020. The list of approved contractors for round three is here.

The Foodbox program also drew the scrutiny this week of Congress’s Government Accountability Office, which issued a report telling USDA to thoroughly evaluate the program and improve its operations. The GAO said that an evaluation after the program concludes Oct. 31 would provide assurances that USDA has learned from some of the hiccups of the program earlier this year, including selecting vendors that struggled with the terms of the distribution process.

Our newest Dairy Defined podcast features NMPF lobbyist Paul Bleiberg. I’m pleased to announce I promoted Paul this week to Senior Vice President of Government Relations for his ongoing excellent leadership of our efforts on Capitol Hill. In this week’s podcast Paul addresses where Congress is in the process of appropriating additional COVID-19 aid. The treacherous political crosscurrents of the election season are dimming prospects for another congressional stimulus bill, at least prior to the election, but the new infusion of direct payments should help many dairy farmers facing unstable roller-coaster prices.

In addition to the coronavirus pandemic, 2020 has been disastrous in other ways for agriculture, including a recent Midwest windstorm, wildfires raging across Western states and an active hurricane season in the Southeast. To help farmers better prepare for and respond to these crises, NMPF this week created a new webpage for dairy farmers, www.nmpf.org/disaster-resources, offering natural-disaster-related resources and information. Because emergencies and disasters can occur at any time and without warning regardless of where a farm is located, all producers should consider developing or updating Emergency Action Plans on their farms. NMPF’s page includes information compiled from authoritative sources on topics ranging from fire safety for livestock to on-farm hurricane preparation and the USDA’s Disaster Assistance Discovery Tool.

Trade Policy

Efforts to Reclaim Dairy Sales to China Helped by Tariff Exemption – Despite the continuing difficulties of the U.S. trade dispute with China, NMPF and USDEC’s trade policy efforts won a battle within that war this week by achieving a one-year extension of a Chinese tariff waiver for whey – a major export category for the U.S.

Whey permeate is one of 16 dairy products that was scheduled to face an increase in tariffs starting Sept. 16, but sustained efforts from USDEC and NMPF led the Chinese government to hold off on hiking the tariffs. With this announcement by the Chinese government, the tariff exemption on permeate for feed will expire on September 16, 2021, rather than this week. Whey shipments classified under HTS 0404.10 account for roughly 60% of the U.S.’s total dairy export volume to China through July. In the first seven months of this year, the U.S. has shipped nearly 100,000 metric tons of whey, more than the U.S. shipped all of last year to China. Prior to the trade war and the arrival of African Swine Fever, however, the U.S. shipped 245,000 MT annually to China. With this exemption, the U.S. hopes to reclaim more of those lost sales.

The Chinese action came a few days after the World Trade Organization ruled that the Trump Administration violated the terms of the WTO by imposing tariffs on Chinese goods in 2018 – which led to the imposition of retaliatory tariffs, including on many of our agricultural products. The WTO ruling is not expected to have any impact on the actions of either nation as the tariff tit for tat continues.

Other News

NMPF Updated Fall Meeting Schedule Dates – We’ve made a slight adjustment to our fall governance meetings compared to the information I shared here last week. The key dates to save are:

NMPF Executive Committee: Friday, Sept. 25
NMPF Board of Directors: Friday, Oct. 16 (updated)
NMPF Delegates: Monday, Oct. 26
NMPF Annual Meeting General Sessions: Tues. Oct. 27 & Wed., Oct. 28
NMPF 2021 Board of Directors meeting: Nov. 12 (updated)

Because these are all virtual meetings, they will require participants to use Zoom. We will soon be providing links to each. Thanks for reading and enjoy your weekend!