Financial Aid Resources for Producers & Covid_19 Relief Info

03/01/2020 9:00 AM | Anonymous member (Administrator)

Dairy Producers to Receive $6.20 Per CWT in Aid Payments

President Donald Trump and USDA released the long-awaited rules for direct payments under the Coronavirus Food Aid Program (CFAP). CFAP and Commodity Credit Corporation payments combined will total $6.20 per cwt for eligible producers. USDA will begin accepting applications on May 26th for the Coronavirus Food Assistance Program (CFAP) package through the Farm Service Agency.

What is the payment rate for dairy?

A single payment will be made to dairy farmers based on a two part calculation. Part one will be based on a producer's certification of milk production for the first quarter of calendar year 2020 multiplied by $4.71 per hundred weight. The second part of the payment is based on a national adjustment to each producer's production in the first quarter multiplied by $1.47 per hundred weight. A total of $6.20/cwt.


CFAP Payment Limitations and Structure: 

Payment Limitations:

CFAP payments are subject to a per person and legal entity payment limitation of $250,000. This limitation applies to the total amount of CFAP payments made with respect to all eligible commodities.


Unlike other FSA programs, special payment limitation rules will be applied to participants that are corporations, limited liability companies, and limited partnerships (corporate entities). These corporate entities may receive up to $750,000 based upon the number of shareholders (not to exceed three shareholders) who contribute at least 400 hours of active person management or personal active labor. 


For a corporate entity:

  • With one such shareholder the payment limit for the entity is $250,000;
  • With two such shareholders, the payment limit for the entity is $500,000 if at least two members contribute substantial labor or management with respect to the operation of the corporate entity; and
  • With three such shareholders, the limit is $750,000 if at least three members contribute substantial labor or management with respect to the operation of the corporate entity.


Payment Structure:

To ensure the availability of funding throughout the application period, producers will receive 80% of their maximum total payment upon approval of the application. The remaining portion of the payment, not to exceed the payment limit, will be paid at a later date as funds remain available. 


USDA Service Centers are open for business by phone appointment only. 


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Producers will receive a single payment determined using two calculations:

  • Price losses that occurred January 1- April 15, 2020. 
    • Producers will be compensated for 85% of price loss during that period.
  • The second part of the payment will be expected losses from April 15 through the next two quarters and will cover 30% of expected losses.
  •  The payment limit is $125,000 per commodity with an overall limit of $250,000 per individual or entity. 
  • Qualified commodities must have experienced a 5% price decrease between January and April.


USDA is expediting the rule making process for the direct payment program and expects to begin sign-up for the new program in early May and to get payments out to producers by the end of May or early June.


On top of these targeted programs USDA will utilize other available funding sources to purchase and distribute food to those in need. USDA has up to an additional $873.3 million available in Section 32 funding to purchase a variety of agricultural products for distribution to food banks. The use of these funds will be determined by industry requests, USDA agricultural market analysis, and food bank needs.


The FFCRA and CARES Act provided an at least $850 million for food bank administrative costs and USDA food purchases, of which a minimum of $600 million will be designated for food purchases. The use of these funds will be determined by food bank need and product availability.

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