We welcome the New Year with a new stimulus package that includes direct support for agriculture. President Trump signed the latest coronavirus relief bill on December 27, 2020, in which lawmakers combined stimulus legislation with funding USDA payments to both crop and livestock producers.
The bill provides $13 billion for agriculture, to be distributed through initiatives that include a $400 million provision to buy milk for processing into dairy products that would be donated to food banks and other charities.
USDA still needs to finalize the rules, but the following are highlights of the provisions for ag producers eligible to participate.
Crop Producers
- Price trigger crop producers are eligible for payments of $20 per acre based on lost 2020 acres, which would include crops such as soybeans, sunflowers, corn and wheat.
- Flat rate crop producers are eligible for payments of $20 per acre based on lost 2020 acres, which includes a wide variety of crops, but namely sugar beets, peanuts and rice.
Livestock and Poultry Producers
- Due to insufficient processing availability during the pandemic, eligible producers who had to depopulate their herds or flocks prior to 12/27/2020 may be compensated up to 80% of market value for said livestock or poultry, as well as the cost to depopulate, if they were not already compensated previously.
- Contract livestock growers will be able to take part in this program, unlike in the Coronavirus Food Assistance Program (CFAP)1 and CFAP2. This program will allow those contract growers to cover up to 80% of revenue loss between 1/1/2020 and 12/27/2020.
- For beef producers with owned cattle inventory between April 16, 2020 to May 14, 2020:
- Producers may receive payments for losses by multiplying the highest inventory count during the period mentioned above by the payment rate for the following categories
- Slaughter Cattle-Mature Cattle $14.75
- Slaughter cattle-Fed Cattle $63
- Feeder cattle less than 600 pounds $7
- Feeder Cattle more than 600 pounds $25.5
- All other cattle $17.25
- Dairy producers would be eligible for payments, estimated at up to $470 million, through a supplemental version of the Dairy Margin Coverage (DMC) program. Payments are based on 75% of milk production in 2019 that exceeded the volume already covered by the DMC.
- Producers may receive payments for losses by multiplying the highest inventory count during the period mentioned above by the payment rate for the following categories
In addition, there is funding set aside for timber harvesting and specialty transport businesses, as well as some support for aquaculture producers. The bill also sets aside an additional $1.5 billion for USDA to continue the purchase of food products that can be donated back to food banks.
The new stimulus package is a boost to farm businesses across the U.S., but it is complex to understand how to maximize those benefits. Please make sure to work with a qualified advisor to fully maximize the stimulus support for your specific business needs.
KCoe Isom advisors can provide a consultation for information related to farm programs and USDA program support. For more information, contact Austin Sterling.
