Coronavirus Food Assistance Program (CFAP) enrollment

Contributed by Steve Johnson, Extension Farm Management Field Specialist, sdjohns@iastate.edu

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The USDA announced the producer signup for the Coronavirus Food Assistance Program (CFAP) allocated by Congress through the CARES Act that will begin on Tuesday, May 26, 2020. That enrollment will be through your local Farm Service Agency (FSA) office with additional CFAP details and the enrollment process at https://www.farmers.gov/cfap.

The $16 billion available for CFAP includes direct relief for farmers, with $9.6 billion for the livestock industry ($5.1 billion for cattle, $2.9 billion for dairy, and $1.6 billion for hogs). It has $3.9 billion for row crop producers, $2.1 billion for specialty crop producers, and $500 million for other crops.

USDA officials are urging farmers to begin the paperwork process using an online calculator available once sign-up begins. These payments will be coupled with actual production and based on losses due to price declines and supply chain disruptions from COVID-19. To qualify for a payment, a commodity must have declined in price by at least 5% between January and April 2020.

Producers will be paid based on inventory subject to price risk held as of Jan. 15, 2020. A single payment will be made based on 50% of a producer’s 2019 total production or the 2019 inventory still not sold as of Jan. 15, 2020, whichever is smaller. This amount for each crop will be multiplied by 50% and then multiplied by the commodity’s applicable payment rates featured below:

CFAP Payment Rates by Commodity

CommodityUnit of MeasureCARES Act Payment RateCCC Payment Rate
Cornbushel$0.32$0.35
Soybeansbushel$0.45$0.50
See all non-specialty crop rates.

Producers must provide the following information as a part of their CFAP application:

  • Total 2019 production for the commodity that suffered a 5% or more price decline, and
  • Total 2019 production that wasn’t sold as of Jan. 15, 2020.

This video demonstrates how the new CFAP application form can be downloaded, completed, signed, dated, and then mailed or e-mailed to your local FSA office.

Producers should make an extra copy of this completed CFAP application form for their records. Attach any proof of how you determined the 2019 total production by crop and the 2019 production that was “not sold” as of Jan. 15, 2020.

The CFAP program will be open to all producers, regardless of commodity or size. Some farmers may not have traditionally worked regularly with FSA. Once signup begins, some producers may want to contact their local FSA office to schedule an appointment. In that case, FSA staff will help those producers complete portions of form CCC-902 Farm Operating Plan. Other forms will also be needed to apply for CFAP, although if you’ve dealt with FSA before, it’s likely they already have these on file.

These forms include:

  • CCC-901—Identifies members of a farm that is a legal entity. Member information will be completed by legal entities and joint organizations to collect member names, addresses, tax ID numbers, and citizenship status.
  • CCC-941—Reports your average adjusted gross income for programs where income restrictions apply.
  • CCC-942—This certification reports income from farming, ranching, and forestry for those exceeding the adjusted gross income limitation.
  • AD-1026—Ensures compliance with highly erodible land conservation and wetland conservation.
  • AD-2047—Provides basic customer contact information.
  • SF-3881—Collects your banking information to allow USDA to make payments to you via direct deposit.

More information will be available on the Ag Decision Maker blog as details on CFAP are released.

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Plan how best to work with your local FSA office

Contributed by Steve Johnson, Extension Farm Management Field Specialist, sdjohns@iastate.edu

Steve Johnson, headshot

The ongoing COVID-19 situation has changed the way your local USDA Farm Service Agency (FSA) office is conducting business with producers this spring. Local FSA offices are currently using alternative methods to provide service and ensure compliance with FSA provisions. Appointments can be made by phone, mail, or e-mail – rather than face-to-face interactions. Once producers have completed planting their 2020 spring crops, they should contact the local FSA office to obtain their certification maps to complete the annual acreage certification process.

The following is a 4-step process provided by a county FSA office in Iowa to their producers for completing their 2020 acreage report:

  1. Your local FSA office can provide farm/tract maps upon your request. They can provide them through the mail or e-mail. Once received, write in a legible pen what crop is planted in each field, including hay ground, grassed waterways, terraces, CRP, etc. and the approximate acreage amounts in those areas. 
  2. Next enter the planting date for each field below the crop type.
  3. If the producer shares the crop with another producer(s); list each individual/entity and their respective share of the crop. The total of listed shares must equal 100%.
  4. If the producer is unable to legibly write the crop, planting date, acres and producer shares (if necessary); then provide a sheet of paper along with the map that lists the field number, the crop, date planted, acres and shares.

Once you have all the acreage on your tract maps accounted for, contact your local FSA office to schedule a phone appointment to go through your maps. This can be handled in one of two ways:

Option 1) You may return your completed maps to the county office for loading into the crop certification software via mail, e-mail, fax, or the drop box located outside your local FSA office.

Option 2) FSA staff can contact you and go through your maps over the phone together. This includes FSA updating your crops/dates/acres/shares and entering them into the crop certification software and allowing you to provide any other pertinent information.

In either case, you will subsequently receive the printed acreage form for your signature in the mail or via e-mail. Indicate to FSA your preference when contacted. Then return your signed FSA Form 578 via mail, e-mail, fax or drop box located at your local FSA office. The deadline is July 15, 2020 for filing this form .

Producers should plan to keep good records at planting each year and file a timely FSA Form 578. Annually these records include the date, the crop and acres planted, and producer shares along with the reference to the farm number. Do not forget you will need to include hay ground, grassed waterways, terraces, CRP, etc.

Filing an accurate and timely acreage report for all crops and land is important. This report is an essential part of determining your eligibility for critical programs, including crop insurance, price support, disaster relief and conservation programs.

Remember, both the FSA office and your crop insurance agent will need accurate planting information and your signature when you complete the acreage certification FSA Form 578. The planted acres on this form are verification for your crop insurance agent in determining your 2020 crop insurance coverage, and thus your final premium to be paid this fall.

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April’s USDA WASDE and Export Sales reports

Chad Hart, ISU Extension Grain Marketing Economist, provides a summary of the latest WASDE report.

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In the reports released today, usage declined, but by less than the trade expected, so futures moved slightly higher with the release of the report. For corn, feed usage was increased by 150 million bushels.  This is due to corn directly replacing part of the loss of distillers grains as ethanol plants close and distillers disappears. Ethanol usage of corn declined by a staggering 375 million bushels. At least eight ethanol plants that have idled, with many more slowing production. The weekly fuel report from the Energy Information Administration showed a roughly 40% cut in ethanol production over the past two weeks. Add in a couple of other minor adjustments and ending stock projections rose 200 million bushels, putting 2019/20 ending stocks at just shy of 2.1 billion bushels. USDA lowered its 2019/20 marketing year price estimate 20 cents, to $3.60 per bushel.

For soybeans, crush was raised 20 million bushels, but exports were lowered 50 million. The increased crush is to create more soybean meal (again, replacing distillers grains). Export pace, while improving, has been well below what was needed to reach USDA’s original export estimate. Factor in a 25 million bushel drop in seed and residual (mainly an adjustment to the planted acreage number), and 2019/20 ending stocks rose 55 million bushels to 480 million in total. The 2019/20 marketing year average price estimate was lowered 5 cents to $8.65 per bushel.

While the WASDE report did not reflect positive news from exports. The weekly Export Sales report did show higher than expected corn sales, along with soybean sales that were within expectations, but at the higher end. China has been a pleasant surprise in the corn market (up 88% for the year). The Asian markets, outside of China, have been improving for soybeans.

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COVID-19 Resources for Agriculture

While in-person events remain on hold, ISU Extension and Outreach, including Ag Decision Maker, remains committed to serving Iowans. A few resources are included below, and more will be added as needed

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Considerations for Adding SCO Crop Insurance

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Contributed by Steve Johnson, Extension Farm Management Field Specialist, sdjohns@iastate.edu

The decision to purchase Supplemental Coverage Option (SCO) crop insurance in 2020 must be confirmed with your crop insurance agent on or before March 15, 2020. This deadline for making crop insurance changes for spring planted crops now becomes the same deadline for electing and enrolling annually in the ARC/PLC program at your local USDA Farm Service Agency (FSA) office.

The SCO product is available to producers who elect and will enroll in the Price Loss Coverage (PLC) commodity crop program on a farm in 2020. With the ongoing election/enrollment in the ARC/PLC program this winter, the expectation of many experts is that most farmers will choose the PLC program on their corn base acres. However, the ARC-County (ARC-CO) program will be the choice for most soybean base acres.

The SCO band of coverage is based on the county revenue given that the underlying COMBO crop insurance product, likely Revenue Protection (RP) is also purchased. SCO provides a protection in a band at an 86% maximum level down to the coverage level selected for RP. An example would be a farmer who selects a 75% coverage level for RP and adds the SCO product. Thus, SCO could provide county-based revenue coverage from the 86% to the 75% level, or 11% total SCO.

To trigger an indemnity claim the actual county revenue must fall below 86% of the county revenue guarantee before SCO would trigger a payment. As a result, the RP-SCO combination provides mixed coverage: Farm-level coverage is provided from the RP product downward (65%, 70%, 75%, 80% and 85% levels) while county-level coverage provides between 86% and the coverage level of the RP product.

The primary disadvantage of the RP-SCO combination is that the county-level coverage may not match losses on a farm. Sometimes a farm may have a large revenue loss while SCO will not trigger a payment. It’s also possible that the farm does not have a loss while the county-based SCO product triggers a payment. Note that if an SCO indemnity payment is made, the farmer will not receive it until the June following harvest when USDA’s Risk Management Agency (RMA) releases the final county yields.

The primary advantage of purchasing an RP-SCO combination product is a lower overall farmer-paid premium. However, consider if your county yields are typically less variable than your farm’s yields. This could result in fewer indemnity claims for a county-based product than for that farm-level product at the same coverage level. SCO has a government subsidy rate of 65% which is higher than the rate for RP at the 85% coverage levels using enterprise units. This 65% subsidy rate is higher than all subsidy levels for basic and optional units when the coverage level is above 50%.

Farmers who typically purchase RP at high coverage levels (80% and 85%) will likely find a slightly lower farmer-paid premium by adding SCO. But consider a couple cautions before you add the SCO product in 2020. First, make sure your farm’s yields are reflecting your county’s yields. Second, if an SCO indemnity payment is triggered, don’t expect to receive those proceeds until the June following harvest.

Be aware of the time constraints that both FSA county office staff and crop insurance agents will have as this March 15, 2020 deadline approaches. Prepare now to elect and enroll in the ARC/PLC programs for your farms and perhaps update your PLC yields that will be effective for the 2020 crop. Then discuss with your agent the crop insurance changes you’ll be making in 2020 including the possibility of adding the SCO product if you will be enrolling in the PLC program for that crop.

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