Dairy Cash Flow Assistance UPDATED: CFAP 2 Program Application Open Through December 11, 2020, EIDL Still Available

Dianne Shoemaker, Farm Management Specialist, Ohio State University Extension

2020 has certainly been an interesting year. So many things have not turned out as expected, and as a result, cash flow is still an issue on many dairy farms. Two programs are currently available that may be of assistance.

CFAP 2 – Coronavirus Food Assistance Program (CFAP) – Part 2

The original CFAP program administered through the USDA Farm Service Agency provided direct assistance to farms with qualifying crops or livestock through funding from the CFAP and the CCC (Commodity Credit Corporation). That program closed on September 11th, but the market challenges did not end. In response, the CFAP 2 Program was announced and is accepting applications from September 21 through December 11, 2020.  CFAP 2 funding for dairy is provided through the CCC.

What does this mean for dairy farmers? There are some differences from CFAP 1. The dairy (milk) component is very straight-forward: 

Cows milk is considered a “price-trigger commodity” for this program, meaning it suffered at least a five percent national price decline when comparing the average price from July 27 – 31, 2020 to the average price from January 13-17, 2020. CFAP 2 provides a $1.20/cwt payment for documented pounds of milk produced (sold) between April 1 and August 31, 2020, as well as predicted production from September through December 2020. Predicted production will be equal to the daily average milk sold from April through August times 122; the total number of days in September, October, November and December. Those pounds will also be multiplied by $1.20/cwt.

Farmers will need to provide records of milk produced and sold (the final milk check as documentation) from April 1, 2020 to August 31, 2020.

Sample Dairy Calculation:

While the milk portion is very strait forward, there are some differences from CFAP 1 for animals:

  • Cull cows are not eligible for payments (whether cull dairy cows or cull beef cows).
  • Payments for bull calves, beef feeders, dairy steers or cull heifers (animals have never calved) is $55 per head based on the highest one-day inventory between April 16 and August 31.
  • For most dairy farms that do not raise feeders or finish cattle, that will likely be the day they sold the most bull calves or cull heifers during that time period.
  • Animals that have calved or are intended for milk production are not eligible.

Work with your local FSA office for guidance as details continue to be addressed for CFAP 2. Eligibility requirements continue from CFAP 1, while payment limitations have been re-set. Detailed information on these subjects can be found at https://www.farmers.gov/cfap

EIDL – Economic Injury Disaster Loan

This is a CARES-authorized Small Business Association (SBA) program which is currently open for farm and other small-business applications at the sba.gov website. Farm businesses and agricultural cooperatives with no more than 500 employees may apply for EIDL, which gives loans up to $2 million for businesses that suffer economic injuries due to COVID-19.  Approved loans will incur 3.75% interest for terms up to 30 years. Collateral will be required for larger loans. Applications are taken on-line only.  Find more information at http://sba.gov