Please note the purpose of this publication was for timely education in response to the COVID-19 pandemic (in June of 2020). It is up to the reader to seek current education on the topical content included in the publication.
If you have questions about the content of this publication, please contact the authors.
The Coronavirus Food Assistance Program (CFAP) for non-specialty crops provides help for producers of commodities that suffered significant price declines from the COVID-19 pandemic. In addition to non-specialty crops, CFAP payments are also available for wool, livestock, dairy and specifically mentioned eligible specialty crops.1,2
Producers of non-specialty crops (see table 2 for eligible crops) who suffered a five percent or greater price decrease are eligible to apply through August 28, 2020. The five percent price decrease uses the January 13-17 average price relative to April 6-9 average price. The payment will be paid based on inventory subject to price risk on January 15, 2020. Table 1 shows the USDA’s explanation of inventory subject to price risk.3,4
Table 1. CFAP Contract Eligibility.
|Type of Contract in Existence on January 15, 2020||Explanation|
|Contracts Eligible for CFAP|
|Basis Contract||Producer locks in a basis, leaving the future price to be set later.|
|Basis Fixed Contract|
|No Price Established||Producer delivers commodity without setting a sales price.|
|Deferred Price Contract|
|Contracts Ineligible for CFAP|
|Cash Contract||Producer receives a cash price for a commodity when sold.|
|Fixed Price Contract|
|Forward Price Contract||Producer receives a cash price for a commodity based on a future delivery date.|
|Cash Forward Contract|
|Minimum Price Contract||Producer locks in the cash price and buys a call option to establish a minimum price. The net cash price will never be less than the original cash value minus the cost of the call option.|
|Option Contract (Buy Calls)|
|Hedge to Arrive Contract||Producer locks in a futures price, leaving the basis to be set later.|
|Futures Fixed Contract|
Source: US Department of Agriculture, Farmers.gov.2
To apply for a payment, the producer must provide the following for each commodity eligible for payment:
- Total 2019 production for the commodity
- Total 2019 production that was not sold and was still open to price risk as of January 15, 2020.
This information is recorded in part D of Form AD-3114 Coronavirus Food Assistance Program (CFAP) Application.
Each commodity’s quantity to count for payment is the lesser of
- 50% of 2019 production, or
- the unpriced inventory as of January 15, 2020.
Each commodity’s payment = (Quantity X 50% X CARES Rate) + (Quantity X 50% X CCC Rate). The CARES and CCC Payment rates are shown in table 2. The USDA will make an initial payment of 80% of an eligible participant’s calculated CFAP payment. USDA will disburse the remainder of a producer’s payment if funding (not to exceed $16 billion) is available. 2,4
Table 2. CFAP Payment Rates.
|Commodity||Unit of Measure||CARES Act Part 1 Payment Rate||CCC Part 2 Payment Rate|
|Barley (malting barley only)||Bushel||$0.34||$0.37|
|Wheat, Hard Red Spring||Bushel||$0.18||$0.20|
Source: US Department of Agriculture, Farmers.gov.2
Non-Specialty Crop Example
Producer “John Smith” intends to apply for a CFAP payment on his 2019 corn production. He completed Part D of USDA Form AD-3114, as shown below:
John had of his corn all (101,903 bushels) in storage January 31, 2020. However, he had the following contracts in existence on January 15, 2020.
- 10,000 bushels Futures Contract (2-CH20 contracts, sold on 12/18/19 for $3.87.)
- 15,000 bushels Forward Contract. (Local elevator for delivery in February 2020 for $4.52)
- 25,000 bushels Hedge to Arrive Contract. (5-CH20 contracts sold at an average price of $4.07).
John is considered to have 50,000 bushels of corn priced, leaving 51,903 bushels unpriced. 50% of his 2019 production is 50,952 bushels. He is eligible for a CFAP payment on 50,952 bushels of corn as his January 15 inventory is greater than 50% of the total 2019 production. His payment would be
- 50,592 bushels X 50% X CARES Act Payment rate ($0.34) = $8,600.64
- 50,592 bushels X 50% X CCC Payment rate ($0.37) = $9,347.87
- Total Maximum Payment = $17,948.51
- Initial Payment @ 80% = $14,358.81
CFAP payments for non-specialty crops can also be made under the following circumstances:
- Producers who deliver eligible commodities to a cooperative are eligible for CFAP payments if they maintain and share in the risk of the eligible commodity as required by the applicable dates specified in CFAP policies. Cotton is an example of a commodity often delivered to member-owned cooperatives.3
- While CFAP excludes “forages,” USDA is allowing producers to convert applicable silage to bushels of grain equivalent. The payment will be based on the lessor of 50% of the total 2019 production or inventory as of January 15, 2020. The expected conversion rates are:
Other silage or forages may be eligible. Confirm the conversion rates and eligibility with your local Farm Service Agency office.
Producers will be allowed to amend a previously submitted CFAP application. This may occur when a currently ineligible commodity becomes eligible after the producer has submitted their application.3
CFAP payments are limited to a per person limitation of $250,000 and include all eligible commodities. Unlike other Farm Service Agency (FSA) programs, special rules apply to farms that are corporations, limited liability companies (LLCs), and limited partnerships. The program entitles these three entities as “corporate entities.” Corporate entities may receive up to $750,000 based upon the number of shareholders, up to three at $250,000 per shareholder. To qualify, a shareholder must be contributing at least 400 hours of active management and or active labor.
All payments will be reduced by 20 percent to allow the USDA-FSA to help ensure the availability of funds for as many producers as possible. If funds are still available later, the remaining 20 percent or a portion of the remaining 20 percent may be paid.
Farmers are encouraged to contact their local FSA office to discuss signup as soon as possible. FSA staff will work with producers to file applications. Applications may be submitted via mail, fax, hand delivery, or via electronic means. USDA asks that you please call your local FSA office prior to sending applications electronically.
The CFAP application and associated forms are available online at farmers.gov/cfap.
There are several forms to fill out to participate in the CFAP program. If you have enrolled in FSA programs in the past, any forms you have already completed will be on file with the FSA. The CFAP application period will end on August 28, 2020.
As with other Federal/State Coronavirus response programs, some details of this program are yet to be defined, and interpretations/determinations may change. Please look for the most current information at www.farmers.gov/cfap
Additional resources and information on assistance programs related to COVID-19 can be found at
- Clemson Cooperative Extension, Agribusiness Program Team Resources for COVID-19 website
- Michigan State University Extension, Farm Management Agribusiness Resources for Novel Coronavirus website
- Notice of Funding Availability; Request for Comments. Department of Agriculture, Office of the Secretary. Docket ID: FSA-2020-0004. https://www.farmers.gov/sites/default/files/documents/CFAP%20NOFA.pdf.
- Coronavirus Food Assistance Program Final Rule. Federal Register Rules and Regulations Vol. 85, No. 99 Thursday, May 21, 2020; Department of Agriculture, Office of the Secretary. 7 CFR Part 9, Docket ID: FSA-2020-0004, RIN 0503-AA65. https://www.farmers.gov/sites/default/files/documents/cfapfrm-05212020.pdf.
- Coronavirus Food Assistance Program (CFAP). Washington (DC): US Department of Agriculture. https://www.farmers.gov/cfap.
- Coronavirus food assistance program: cost-benefit analysis. Washington (DC): US Department of Agriculture; 2020 May 14. https://www.farmers.gov/sites/default/files/documents/CFAP%20CBA%205%2015%202020.pdf.