Coronavirus Food Assistance Program (CFAP) For Dairy Farmers

Coronavirus Food Assistance Program (CFAP) For Dairy Farmers
Jun 04, 2020

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By Stanley Moore and Adam Kantrovich

Beginning May 26, 2020, dairy farmers across the country were able to begin enrollment in the CFAP dairy program. CFAP payments for milk production are eligible to all dairy operations with milk production in January, February, and/or March of 2020. Any milk that was dumped during this period is also eligible for assistance according to the United State Department of Agriculture Coronavirus Food Assistance Program (CFAP) website.

Dairy farmers are eligible to receive payments for both their milk and dairy beef (cull cows and steers). Within each of these payments there are two different sources of funding that make up the payment that dairy farmers will receive through CFAP; first,  the Coronavirus, Aid, Relief, and Economic Security (CARES) Act and second, the Commodity Credit Corporation (CCC) appropriations.

Dairy Milk

The funding that comes through the CARES Act is intended to cover actual losses experienced by farmers between January 15, 2020 and April 15, 2020. This part of the payment has been calculated at the national level as $4.71 per hundred weight of milk according to the website CFAP .

The second source of funding through the CCC is intended to cover anticipated losses in the “second quarter,” and includes a national adjustment (1.014) to each producer’s production in the first quarter, to adjust for increases in production. This part of the payment has been calculated at the national level as $1.47 per hundred weight of milk.

Dairy production payments, regardless of the funding source, are based on the January through March 2020 production time period. Dairy producers will receive a single payment that combines these two components, and then multiplies that total per hundred weight by 80%. Payments have been reduced in order to ensure availability of funding throughout the application period. Remaining funds will be paid at a later date, if available.

For example, a dairy farm that produced 1 million pounds in each of January, February, and March of 2020 would receive the following payment; Component 1: 30,000 cwt. X $4.71 = $141,300. Component 2: 30,000 cwt. X 1.47 X 1.014 = $44,717.40. Total of payment = $186,017.4 X 80% = $148,813.92.

Dairy Beef

Beef cattle are eligible for the Coronavirus Food Assistance Program (CFAP) payments. Every dairy producer is also a beef producer. Cows that do not meet the desired criteria for milking and breeding are then sold for beef, while many of the deacons (bull-calves) are usually castrated and are sold and or raised as dairy beef steers.  

Cattle are eligible for CFAP payments from two different possible sources of funding 1) CARES Act funding and 2) appropriated funds through the CCC.

The potential cattle payments made with CARES Act funds is determined by taking the payment rate per head (based on class, see table 1) multiplied by the volume of sales that occurred between January 15 and April 15, 2020. The CCC funds payment is determined by multiplying the payment rate per head (by class) by the highest inventory level between April 16 and May 14, 2020 according to the website Coronavirus Food Assistance Program Final Rule.

The classes of beef cattle and the payment rate can be found in table 1.

Commodity/ClassUnitsCares Act Payment Rate ($/unit)CCC Payment Rate ($/unit)
Dairy- Milkcwt$4.71$1.47
Slaughter Cattle – Mature CattleHead$92.00$33.00
Slaughter Cattle – Fed CattleHead$214.00$33.00
Feeder Cattle less than 600 poundsHead$102.00$33.00
Feeder Cattle 600 pounds or moreHead$139.00$33.00
All Other CattleHead$102.00$33.00

It is imperative that good records are kept and used, that provide the information requested in case of an audit or request of information to “back-up” the information that was provided to USDA-FSA.

  1. Detail any cows that were determined and sold for beef between January 15 and April 15, 2020
  2. Detail any deacons, steers and heifers that were determined and sold for beef between January 15 and April 15, 2020
  3. Cattle inventory records separated by class as shown in Table 1 of inventory on hand between April 16 and May 14, 2020 of any cows, heifers, steers and deacons destined for the beef market.

Payment Limitations

CFAP payments are limited to a per person and legal entity payment limitation of $250,000, and includes all eligible commodities. Unlike other Farm Service Agency (FSA) programs, special rules apply to farms that are corporations, limited liability companies (LLCs), and limited partnerships. The program titles these three entities as “corporate entities”. Corporate entities may receive up to $750,000 based upon the number of shareholders, up to three at $250,000 per shareholder. To qualify, a shareholder must be contributing at least 400 hours of active person management or personal active labor.

All payments will be reduced by 20% to allow the USDA-FSA to help ensure the availability of funds for as many producers as possible. If funds are still available at a later date the remaining 20% or a portion of the remaining 20% may be paid.

Application Process

Farmers are encouraged to contact their local FSA office to discuss signup as soon as possible. FSA staff will work with producers to file applications. Applications may be submitted via mail, fax, hand delivery, or via electronic means. USDA asks that you please call your local office prior to sending applications electronically.

The CFAP application and associated forms are available online at farmers.gov/cfap.

There are a number of forms to fill out to participate in the CFAP program. If you have enrolled in FSA programs in the past, you may have completed some of these already. The CFAP application period will end August 28, 2020.

As with other Federal/State coronavirus response programs, some details of this program are yet to be defined, and interpretations/determinations may change. Please look for the most current information at www.farmers.gov/cfap.

Source : msu.edu