Posted 09/21/2020

North Dakota Stockmen’s Association Member Update: Sept. 21, 2020

The North Dakota Stockmen’s Association (NDSA) is proud to be the voice of the state’s beef cattle producers. Here are a few things you should know:

More details available for Coronavirus Food Assistance Program 2.0

Last week, President Donald Trump and U.S. Secretary of Agriculture Sonny Perdue announced details of the Coronavirus Food Assistance Program 2.0 (CFAP 2.0), which will provide assistance to producers who continue to face market disruptions and additional costs due to COVID-19. Sign-up, which is being conducted by the U.S. Department of Agriculture’s (USDA) Farm Service Agency, begins today and continues through Dec. 11.

Payments for beef cattle will be based on the maximum owned inventory of eligible livestock, excluding breeding stock, on a date selected by the producer, between April 16 and Aug. 31, 2020, multiplied by $55 per head. In a meeting with USDA officials this afternoon, NDSA Executive Vice President Julie Ellingson asked for clarification on what is considered “breeding stock” under this program. The answer: cows and bulls. Cows are considered “cows” once they have a calf. Open replacement heifers and bred heifers at any stage of pregnancy, up until the time they have a calf, are not considered breeding stock and are eligible for CFAP 2.0. Bulls are considered “bulls” once they have serviced females. Bull calves and young bulls that have not yet serviced females are considered as non-breeding stock for the purposes of this program and are eligible for payments.

Here are some other Frequently Asked Questions about CFAP 2.0:

Livestock payments

Q: How will CFAP 2.0 cattle assistance payments be calculated?

A: CFAP 2.0 payments are structured similarly to the CFAP 1.0, Part 2, inventory payments, but at an increased rate of $55 per head. Payments can be calculated by multiplying the highest owned inventory of eligible livestock – on a date selected by the eligible producer from April 16 through Aug. 31, 2020 – by the $55-per-head rate.

Q: Should CFAP 1.0 payments be factored into CFAP 2.0’s payment calculation?

A: No. USDA has determined that CFAP 1.0 and CFAP 2.0 are separate programs. As such, CFAP 1.0 payments have no bearing on how CFAP 2.0 payments will be calculated, and two separate payment limits will be in effect.

Q: If a producer received a CFAP 1.0 inventory payment on an animal retained during the April 16 – Aug. 31 window, can that animal be included as part of the CFAP 2.0 calculation?

A: Yes.

Q: What animals are eligible for CFAP 2.0 cattle assistance payments?

A: All marketable animals are eligible for inclusion in inventory, including 2020-born calves and replacement stock intended for breeding, such as females that have not produced offspring and males that have not started breeding females.

Q: Are breeding stock eligible?

A: No. Breeding stock such as cows and bulls are not eligible for CFAP 2.0. Cull cows are also not eligible.

Payment limits

Q: The USDA website states CFAP 2.0 payments for livestock are equal to the highest inventory number “multiplied by the number of payment limitations for the producer, multiplied by the payment rate of $23 per head.” What does this mean?

A: The cattle assistance calculation is simple: number of eligible head x $55 = CFAP 2.0 payment. This is another way of saying CFAP 2.0 maintained CFAP 1.0’s payment limits, meaning if a producer’s eligible inventory number results in a calculation that exceeds the established limits, their payment will be capped.

Q: What are the payment limits for CFAP 2.0?

A: The total CFAP 2.0 payment that a person or legal entity may receive, directly through their application or indirectly through attribution of entity payments, is $250,000. This payment limitation is separate from the CFAP 1.0 payment limit. This limitation applies to the total amount of CFAP 2.0 payments made with respect to all eligible commodities. The total amount of CFAP 2.0 payments made to a legal entity – such as to a corporation, limited liability corporation (LLC), limited partnership (LP), trust or estate – is $250,000 except if: 1) Two different members of the legal entity each provide at least 400 hours of active personal labor, active personal management or a combination thereof with respect to the production of 2020 commodities, then an entity may receive up to $500,000; or 2) Three different members of the legal entity each provide at least 400 hours of active personal labor, active personal management or a combination thereof with respect to the production of 2020 commodities, then an entity may receive up to $750,000. Although the payment limitation is increased for the corporation, LLC, LP, trust or estate, each members’ payment limitation (received directly or indirectly) remains subject to the $250,000 individual-person payment limit.

General eligibility

Q: Who is eligible to participate in the Coronavirus Food Assistance Program 2.0?

A: Any individual or legal entity who shares in the risk of producing a commodity may apply for CFAP 2.0. Producers must be in the business of farming at the time of submitting their application to be eligible. Contract growers who do not share in the risk of production are ineligible. Producers can apply for assistance for only commercially produced commodities.

Q: Is there an Adjusted Gross Income (AGI) limit to participate in CFAP 2.0?

A: Yes. To be eligible to receive payment, a person’s or legal entity’s AGI cannot exceed $900,000 (using the average for the 2016, 2017 and 2018 tax years). However, producers with AGI exceeding the limit may be eligible to receive payment if 75 percent or more of their total AGI comes from farming, ranching or forestry-related activities.

Application process

Q: When does CFAP 2.0 sign-up start and end?

A: Producers may apply for CFAP 2.0 from Sept. 21 to Dec. 11, 2020, through their local Farm Service Agency office or online at www.farmers.gov/cfap/apply.

Q: How can producers apply for CFAP 2.0?

A: Farm Service Agency offers multiple ways to apply, including online or manually completing the application form or by filling out the application form with a payment calculator. More information can be found on www.farmers.gov/cfap/apply.

Q: If a producer applied for CFAP 1.0, do they still need to apply for CFAP 2.0? What about producers who did not apply for or receive CFAP 1.0 payments?

A: CFAP 2.0 is a separate program. Producers will not automatically be signed up because they applied or received a payment under CFAP 1.0 and will therefore still need to apply. There is no requirement to participate in CFAP 1.0 in order to participate in CFAP 2.0.

Q: What documents do cattle producers need to submit with their application?

A: To complete the CFAP 2.0 application, producers will need to reference their sales, inventory and other records. CFAP 2.0 is a self-certification program, and producers may be subject to review and spot check.

Pre-register for NDSA convention by Sept. 24 to save

The NDSA will be hosting its 91st Annual Convention & Trade Show, “Roaring into the ‘20s,” Oct. 8-10 at the Ramkota in Bismarck. A detailed convention preview is included in this month’s North Dakota Stockman magazine. A pre-registration form is also inserted in that issue or can be found online here. Pre-register by Sept. 24 to save on registration fees and meals. The room block at the Ramkota also closes Sept. 24. To make hotel reservations, call (701) 258-7700. Mention the North Dakota Stockmen’s Association Convention to take advantage of the discounted room rate of $109 plus tax.