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Coronavirus Food Assistance Program (CFAP)


Quick summary:


On Tuesday May 26, this is your To Do List:



  • Download the CFAP application tool from the farmers.gov/CFAP website.

  • Enter your farm’s details and production information into the spreadsheet.

  • Print and sign the form (AD-3114).

  • Contact your local FSA office by phone or email to apply for the program.


Detailed summary:


The USDA announced $16 billion in coronavirus relief direct aid for farmers. Non-specialty crops, livestock and specialty crop farm operations across the U.S. are eligible. The funding will be a combined payment sourced from two pools of money: Congressional CARES Act and Commodity Credit Corporation (CCC).


Producers will be paid based on inventory subject to price risk held as of January 15, 2020. A single payment will be made based on 50 percent of a producer’s 2019 total production or the 2019 inventory as of January 15, 2020, whichever is smaller, multiplied by 50 percent and then multiplied by the commodity’s applicable payment rates. The table below summarizes the non-specialty crop payment amounts.



https://www.roachag.com/Portals/0/CFAP/paymenttable.png


Source: USDA, Farmers.gov



The simple explanation to the payment is that the USDA estimated the price decline between mid-January and mid-April (the onset of the coronavirus epidemic) and is paying farmers for half of that price decline.


For corn, the payments total 67¢ per bushel and for soybeans they total 95¢ per bushel (on 50% of the applicable bushels).


Producers will receive 80% of their payment within a few days of their application and the remainder later. Payments are capped at $250,000 per person or entity.


You will want to complete your application for CFAP as soon as possible, as the payments will be distributed on a first come first served basis like the recent PPP small business loan program. The first round of $310 billion of PPP funds was exhausted after just 14 days.



Watch this 3-minute video from the USDA describing the application process.



On May 26, an application tool containing an Excel workbook will be available for download on the farmers.gov/cfap website. You can use the workbook to enter your farm’s information and see the estimated total payment for your production numbers.


Once you have completed entering your information into the spreadsheet, you can print the application form, sign it and send it to your local FSA office.


Below is a screenshot of the Excel workbook from the 3-minute USDA video.


https://www.roachag.com/Portals/0/CFAP/screenshot.png



But the big question is, what will your payment look like?


We have worked through an example duplicating the USDA’s spreadsheet format. In this example, the farm harvested 500 acres of corn @ 196 bushels per acre and 500 acres of beans @ 57 bushels per acre. This was a total production of 98,000 bushels of corn and 28,500 bushels of beans.


On this farm, half their production was not sold on January 15, 2020, leaving 49,000 bushels of corn and 14,250 bushels of soybeans eligible for CFAP payment. These bushels are divided in half and multiplied by the CARES and CCC payment rates.


Under this scenario, the farm would be eligible for $23,183.75 in CFAP funding.


https://www.roachag.com/Portals/0/CFAP/exceltable.png



This weekend gather all your sales, inventory and production related records through January 15, 2020 so you have the numbers to fill out the form. This is a self-certification program, so you will not need to provide any documentation to the FSA when you submit the application.


On Tuesday May 26, this is your To Do List:



  • Download the CFAP application tool from the farmers.gov/CFAP website.

  • Enter your farm’s details and production information into the spreadsheet.

  • Print and sign the form (AD-3114).

  • Contact your local FSA office by phone or email to apply for the program.



Learn more at the USDA CFAP website. Link: https://www.farmers.gov/cfap


Their FAQ page is very helpful.



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These data and comments are provided for information purposes only and are not intended to be used for specific trading strategies. This commentary is written as a daily marketing tool to help farmers sell the grain they raise. Although all information is believed to be reliable, we cannot guarantee its accuracy or completeness. Commodity trading involves the risk of loss, and you should fully understand those risks before trading. Past financial results are not necessarily indicative of future performance. Any examples given are strictly hypothetical and no representation is being made that any person will or is likely to achieve profits or losses similar to those examples.

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Roach Ag. Marketing is a full service advisory firm founded in Perry, Iowa back in 1978 to help farmers do a better job of marketing their crops and livestock. Roach Ag Marketing moved their main office to Boca Raton, Florida after 21 cold winters in Iowa.
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