COVID Relief

USDA is Making Additional CFAP 2 Payments

Fri, 13 Jan 2023 18:11:34 GMT

USDA has begun issuing additional payments under the Coronavirus Food Assistance Program 2 (CFAP 2) effort to underserved farmers and ranchers using Commodity Credit Corporation (CCC) funds except for those to tobacco farmers where payments will be funded by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

Read more: Vilsack Lists USDA’s 4 Policy Objectives for 2023

The additional payments will be equal to 15% of the producer’s previous CFAP 2 payments. The payments were to be processed and made available to county FSA offices to certify around Jan. 11. USDA said the payments would be issued within 30 days.

Read more: We Have ERP Phase II

Contract growers are not eligible for these additional payments.

The payments were part of a final rule on CFAP and other aid efforts released Jan. 11 and are expected to total $325 million.

Read more: Secure 2.0 Finally Arrives

Vilsack Lists USDA's 4 Policy Objectives for 2023

Wed, 11 Jan 2023 14:16:20 GMT

USDA Secretary Tom Vilsack has a history of making key announcements during visits, and that was the case during his appearance at the American Farm Bureau Federation’s annual meeting in Puerto Rico.

Some of them include:

1. ERP Phase 2

Vilsack announced Phase 2 of the ERP, which will provide help to producers for production and quality losses of eligible crops, utilizing calculations of a producer’s decrease in gross revenue.

Those were about to be released months ago but were pulled back at the last minute due to lawmaker and farmer complaints. USDA eventually announced anyway.

USDA said in documentation on file at the Federal Register that using that approach will reflect the losses “without requiring the more extensive calculations and documentation required under previous programs” for disaster-related crop losses. USDA said this streamlines the aid to minimize the burden on producers and processing of applications by county FSA offices. Using that process also means it will address losses for a qualifying disaster event whether it happened before or after harvest.

ERP Phase 2 will be available for a decrease in gross revenue in 2020 or 2021, primarily to those with losses not covered by Federal Crop Insurance or the Noninsured Assistance Program (NAP).

The application period is Jan. 23-June 2. USDA has already paid out $7.31 billion under ERP Phase 1 as of Jan. 8, up from $7.28 billion the prior week, including $6.23 billion for non-specialty crops ($6.21 billion prior) and $1.09 billion for specialty crops ($1.08 billion prior). A total of $10 billion was earmarked for ERP.

USDA projects outlays for ERP Phase 2 payments will be $1.2 billion and will likely be pro-rated as USDA projects total gross outlays at $1.5 billion.

Phase 2 Reflection

Phase I was highly successful and it worked well. Phase 2 has tons of problems. Comparing schedule F in relevant years to past years doesn’t reflect losses. A farmer may have had to sell land or livestock when they didn’t want to. They may have sold a previous year’s crop in the year in question. These and other things skew the schedule F. There is also the issue of forcing farmers to share schedule F info with local FSA offices.

2. Pandemic Assistance Revenue Program (PARP)

Vilsack announced PARP payments for producers that suffered a 15% or greater decrease in allowable gross revenue for the 2020 calendar year compared with either 2018 or 2019. This effort, Vilsack said, aims to “fill in gaps” for losses covered by either Phase 1 or Phase 2 of ERP.

The payments will have a factor of 80% (90% for underserved farmers and ranchers) and will be reduced by 2020 ERP payments, and pandemic assistance under either the Coronavirus Food Assistance Program (CFAP) 1 or 2 and other pandemic aid.

Payments will be limited to $125,000 per person or entity and USDA may set a lower maximum payment amount per person if total payments exceed available funding and USDA expects that to be the case — PARP outlays are projected at $250 million with gross outlays pegged at $2.66 billion.

USDA also will expand payments under prior efforts such as CFAP 2 and others. The total payments USDA projects under the ERP Phase 2, PARP and expanded other programs is $1.82 billion with gross amounts at $4.54 billion.

3. U.S.-Made Fertilizer

USDA will seek public comment on 21 potentially viable projects totaling up to $88 million to boost U.S. fertilizer production via the first round of USDA’s Federal Production Expansion Program, a $500 million effort announced earlier this year.

The projects are in Alabama, Arizona, Colorado, Florida, Iowa, Louisiana, Massachusetts, Minnesota, Missouri, Montana, Ohio, Oregon, Texas, Washington, and Wisconsin. USDA is seeking comments through Feb. 8 on the environmental impacts of the projects.

4. Meat and Poultry Processing

Vilsack announced three projects in Ohio, Michigan and Minnesota which will expand independent meat and poultry processing capacity via the Meat and Poultry Processing Expansion Program.

The projects total $12 million and are in addition to other recently announced efforts in the sector.

More on policy:

We Have ERP Phase II
Policy and Payments: What Producers Can Expect in 2023

USDA Announces Phase 2 of ERP Along With New Aid Opportunities

Thu, 17 Nov 2022 15:05:21 GMT

USDA announced the launch of Phase 2 of its Emergency Relief Program (ERP) with Phase 1 paying out $7.15 billion to eligible producers.

Who Qualifies for ERP Phase 2?

Phase 2 is targeted to those who suffered losses in 2020 and 2021 but may not have received any payments under Phase 1 for losses in allowable gross revenue for traditionally insurable crops and specialty crops intended to be commercially marketed.

The payments will be based on the difference in farm revenue between a typical year and the disaster year and are to avoid windfall or duplicate payments.

USDA said that the signup deadline for Phase 1 ERP, which was previously extended indefinitely, will now be set to Dec. 16.

Can You Defer ERP Payments?

As you’ll recall from Paul Neiffer’s article , only certain ERP payments can be deferred.

According to Neiffer, if the payment relates directly to damage occurred in 2021, then the payment can’t be deferred until 2023. But if the damage if really for the crop that was harvested in 2022 and damage was for drought during the growing period, then it should be able to be deferred.

As a reminder, here are the three requirements to defer crop insurance proceeds:

• Farmer is on the cash method of accounting (almost all are),
• Farmer normally reports more than 50% of total sales in the year after harvest (most do), and
• The farmer can only defer to the year after the damage was incurred

The last item is what blows up any ability to defer Phase 1 payments. These payments are for damage that occurred in 2020 and 2021. 2022 is the latest you could defer 2021 payments and since you collected them this year, you are stuck with reporting these payments in 2022.

More Payment Opportunities

USDA also mentioned the new Pandemic Assistance Revenue Program (PARP) will be available to help those with ag commodities that saw revenue declines in calendar 2020 compared with 2018 or 2019 due to the COVID-19 pandemic.

The agency said PARP is aimed at addressing “gaps in previous pandemic assistance which was targeted at price loss or lack of market access, rather than overall revenue.”

Under PARP, USDA says producers will use revenue information available from “most tax records,” and urged producers to have those documents available for the past few years along with supporting materials.

According to USDA, the documentation is similar to what producers had to provide for the Coronavirus Food Assistance Program 2 (CFAP 2) effort which allowed for 2018 or 2019 to be used as the benchmark year.

More on ag business:

Can You Defer 2022 ERP?
Paul Neiffer: When Can Inflation Help You?

$670 Million Awarded by USDA to Farm, Meatpacking and Grocery Workers for their 'Essential Role' in U.S. Food Systems During Pandemic

Wed, 05 Oct 2022 19:37:10 GMT

USDA announced 15 groups will get $670 million in funds to farm and meatpacking workers that were negatively impacted during the pandemic, incurring expenses via the outbreak as they were deemed essential workers.

The funds would amount to $600 per person and start in the fall, USDA said. $20 million was also earmarked for a pilot program that would recognize the efforts of grocery workers.

The aim is to defray some of the costs incurred by workers relative to personal protective equipment, child care, and expenses for testing and quarantining.

Farm/meatpacking and grocery worker pilot program grant recipients:

(Farm Journal)

“Please note that payments are not yet available and each organization may have application periods that begin at different times,” said USDA’s Agricultural Marketing Service.

However, according to the announcement, these workers should be given the money from their organizations this fall.

September shaping up as a key month for COVID-19 relief

Fri, 23 Sep 2022 18:06:50 GMT

September will be a pivotal month to determine if industry pleas for more COVID-19 relief will be answered, Robert Guenther said.

“I think when you talk about what transpired over the last several weeks before the political conventions started, and the fact that a COVID-19 package was not agreed to, it really brings into highlight that September is a truly crucial month,” Guenther, senior vice president of public policy for the United Fresh Produce Association , said Aug. 19.

With the fourth COVID-19 stimulus package expected to be up for debate in September, Guenther said the United Fresh Washington Conference, set for Sept. 21-25, is timely.

The stakes for election year battles could not be bigger. Beyond the drama of the presidential race between President Trump and Joe Biden, Guenther said the fight for control of the Senate is what everybody is watching, Guenther said.

“There are a lot of very hotly contested (Senate) seats, very close races could go either way that may impact to kind of decisions that are made post-election,” he said.

The government is facing the prospect of a shutdown Sept. 30 unless Congress and the administration agree on a spending package.

The online Washington Conference — and a virtual march on Capitol Hill — will include participation by elected leaders, administration officials and industry experts on nutrition, trade, food safety and more, he said.

Unprecedented federal support

Guenther said the effect COVID-19 had on the produce supply chain beginning in March, is devastating. The good news is that federal government support since the COVID-19 pandemic began has been unprecedented. Since March, about $4.5 billion has been distributed to the industry through various relief programs. In comparison, the farm bill supplies $3 billion to the industry over five years.

He said the Farmers to Families Food Box Program, the Coronavirus Food Assistance Program and the Paycheck Protection Program have all been helpful but are not enough.

“All of these three important tools have been very critical, helping stabilize the industry; this next phase is more trying to help not just stabilize, but also to bring (the industry) out of a stabilization phase to more of a recovery phase,” he said.

Urgent needs

One current need of the industry is recouping costs related to containing the spread of COVID-19.

“Now we’re looking at more requests, more discussions about how we can help the companies offset costs related to COVID (safety) enhancements that they’ve done to protect their businesses and most importantly, their employees,” Guenther said.

Jason Resnick, vice president and general counsel for Western Growers , said the COVID-19 pandemic safety measures have hit the bottom lines of growers hard. Western Growers is looking for federal support to help growers defray the costs.

“We’ve encouraged Congress to provide additional funding for these farm worker safety measures,” he said, noting the relief could be in the form of tax credits for those who purchase personal protective equipment.

Resnick said that another issue for Western Growers is seeking funds for workers to cover the cost of child care.

“Childcare is an important priority so that they can continue to work and not have to worry about staying home if they choose to work,” he said.

Western Growers would also like liability protection for growers in the next stimulus package. Although the issue doesn’t have much traction so far, Resnick said Western Growers is collaborating with other associations inside and outside of agriculture to try to influence the debate in Washington on employer liability.

The Packer COVID-19 Coverage

The Packer’s United Fresh Coverage

The changes coming and still needed for COVID-19 relief

Fri, 23 Sep 2022 18:06:54 GMT

The Packer’s Tom Karst visited Aug 13 with Richard Owen, vice president of membership and engagement at the Produce Marketing Association .

Karst asked Owen about recent changes to the U.S. Department of Agriculture’s Farmers to Families Food Box Program and the Coronavirus Food Assistance Program.

Owen said the Farmers to Families Food Box Program has recently allowed for somewhat greater flexibility for contractors in the third round of the program.

“Initially, we were told that you were going to need to partner with meat and dairy providers and offer combination boxes,” he said. “I think with the work of the industry, (the) USDA did come out say, yes, they will be receiving proposals again for produce only boxes. And I think that’s great news for our industry because our expertise is really in putting together and handling fruits and vegetables.”

Owen also talks about tweaks to the CFAP program, what the industry is seeking in the next coronavirus relief legislation and the work toward the 2020 virtual Fresh Summit for PMA.

The Packer’s USDA Coverage

The Packer’s Video Updates

The Packer’s PMA Coverage

UPDATED: Trump adds $1 billion to food box program

Fri, 23 Sep 2022 18:06:45 GMT

(UPDATED Aug. 27) President Trump has added $1 billion to the U.S. Department of Agriculture’s Farmers to Families Food Box Program and extended it beyond the end of October.

The White House announced the development Aug. 24 when Trump, Agriculture Secretary Sonny Perdue and presidential advisor Ivanka Trump toured Flavor 1st Growers and Packers, River Mills, N.C. The company has been packing and distributing food boxes through the program.

“From day one, my administration has been determined to protect our nation’s incredible farmers,” Trump said in a news release about the $1 billion addition.

The program originally authorized $3 billion for the boxes and is expected to spend a total of $2.67 billion from mid-May through the end of August, covering the first two rounds of the program. The application process for a third round for $500 million to $700 million was announced July 24, and those contracts go through Oct. 31.

As of Aug. 27, 74.5 million boxes had been distributed, according to the USDA.

The boxes of fresh produce, dairy and meat have gone to more than 10,000 food banks and nonprofit organizations. In addition, the White House said thousands of jobs have been saved or created, according to the release, including more than 5,000 in the food distribution industry.

On Aug. 25, the USDA published a list of companies whose Basic Ordering Agreements (BOAs) have been approved for the third round of awards. All of the 47 companies plan to pack combination boxes of produce, milk/dairy products and cooked meat; the USDA said it would allow produce-only boxes but would place a priority on the combination boxes.

The BOAs are part of a two-step process for USDA approval in the program, and are designed to ensure the distributors and intended food bank/nonprofit recipients have agreements about how the distribution will take place. It will also ensure that regions of the country that didn’t receive adequate food boxes will be prioritized.

“PMA applauds the commitment from the administration to extend funding to the program and will share more details about the program as they become available,” Richard Owen, vice president of global membership and engagement at the Produce Marketing Association, said in a news release.

In a LinkedIn update to members, United Fresh Produce Association president and CEO Tom Stenzel praised the move.
“We commend the administration for taking this important step to continue this win-win-win program for farmers, distributors and families in need,” Stenzel said in the statement.

Related stories:

USDA accepting proposal for third round of food box program

Food box readies for sudden start

Packer Insight - Food Box Program plus creativity at retail

USDA Rolls Out Updates to CFAP2, Changes for Contract Livestock and Specialty Crop Producers

Wed, 25 Aug 2021 16:40:28 GMT

USDA announced updates and additions to the Coronavirus Food Assistance Program 2 (CFAP 2), with the biggest revisions occurring for contract producers of pork, poultry and other eligible livestock, as well as specialty crop producers who grow on a contract basis. Grass seed growers were also added as eligible for the CFAP2 program.

The agency set a deadline of October 12 for producers to sign up or make modifications to existing applications.

Below are highlights from Pro Farmer Washington Correspondent Jim Wiesemeyer.

Contract grower aid: CFAP 2 payments for eligible contract producers of broilers, pullets, layers, chicken eggs, turkeys, and hogs and pigs, with ducks, geese, pheasants and quail produced under contract also eligible commodities, along with breeding stock of eligible livestock and eggs of all eligible poultry types raised by contract producers.

Contract grower payments were originally to be based on a comparison of eligible revenue for the periods of Jan. 1-Dec. 27, 2019, and Jan. 1-Dec. 27, 2020. With the changes, contract producers can now use eligible revenue from the period of Jan. 1-Dec. 27, 2018, instead of the 2019 date range “if it is more representative,” USDA said.

USDA said the shift is aimed at making the program more flexible and equitable for contract growers who had reduced revenue in 2019 versus a normal production year. The revenue difference will be multiplied by 80% to figure a final payment. “Payments to contract producers may be factored if total calculated payments exceed the available funding and will be made after the application period closes,” USDA said. The COVID aid plan approved included $1 billion for payments to contract growers.

USDA also announced additional flexibilities for those that increased the size of their operation in 2020 and did not have a full period of revenue for the Jan. 1-Dec. 27 period in either 2018 or 2019. USDA said that assistance is also now available to new contract producers who began their farming operation in 2020.

Changes for sales-based commodities: USDA is amending the CFAP 2 payment calculation for sales-based commodities — primarily specialty crops — to allow producers to substitute 2018 sales for 2019 sales. Previously, payments for sales-based commodities were based only on 2019 sales, with 2019 used as an approximation of the amount the producer would have expected to market in 2020. Producers can now use 2018 sales for this approximation, including 2018 crop insurance indemnities and 2018 crop year Noninsured Disaster Assistance Program (NAP) and Wildfire and Hurricane Indemnity Program Plus (WHIP+) payments.

Vilsack Announces $2B in Funding to Transform U.S. Food System

Thu, 02 Jun 2022 00:38:43 GMT

Transforming the U.S. food system by improving supply chains and addressing issues exposed by the Covid-19 pandemic will be detailed today by USDA Secretary Tom Vilsack during a speech at Georgetown University.

The over $2 billion package includes previously announced funding to expand meat and poultry processing and to finance new infrastructure such as cold storage facilities, but there $600 million in new aid to support food supply chain infrastructure outside meat processing. The plan also includes $400 million for regional food business centers, up to $300 million for a new organic transition initiative and $75 million to support urban agriculture.

The initiatives are funded through the American Rescue Plan that was enacted in March 2021 and other relief legislation. On Thursday, Vilsack will be in Ohio with Democratic Rep. Marcy Kaptur to visit a full-service grocery store in central Toledo called Market on the Green.

The package includes $650 million in funding and loan assistance for meat and poultry processing projects, including $275 million to help entrepreneurs who have had trouble getting credit. Another $100 million would go toward training workers in meat processing. Another $600 million is earmarked for improving food supply chain infrastructure, including cold storage and refrigerated trucks, outside of meat and processing.

Other funding in the plan includes:

$200 million to help fruit and vegetable growers comply with food safety regulations.
$400 million to create regional food business centers that will provide coordination and technical assistance and other support to small and mid-size businesses involved in processing, distribution and aggregation.
$155 million to expand USDA’s Healthy Food Financing Initiative, which is aimed at reducing food deserts.
$90 million to prevent and reduce food loss and waste.
$60 million farm-to-school programs that increase markets for smaller-scale farmers through child nutrition programs.

The announcement comes as supermarkets and distributors are pushing back on higher prices from food makers, as escalating inflation drives more consumers to rethink their spending. The Wall Street Journal reports ( link ) that Kroger Co. and other grocery chains said they are asking brands to prove why higher prices are necessary before accepting them, and warning manufacturers that they will stop carrying products if food companies won’t negotiate prices. Some companies said they are switching to new meat suppliers with cheaper products and are delaying price changes for items like canned goods.

Retailers generally have been passing price increases along to consumers, and executives have said that for months shopper demand has remained strong. Industry executives said that is starting to change, as consumers increasingly look for ways to stretch their dollars.