COVID Relief

3 Topics Producers Should be Tracking in the Farm Bill

Wed, 31 May 2023 15:23:48 GMT

It’s no secret that conservation and insurance will be heavy topics of discussion in ongoing farm bill debates this year. But it’s difficult to understand the exact role each title will play in legislation.

There might be some insight from House Ag Committee Chairman Glenn Thompson (R-Pa.).

“We don’t need to rewrite the entire farm bill,” Thompson says. “We’re comfortable with many parts of the 2018 bill and there aren’t many tweaks or changes, instead things we need to protect and invest in more.”

With Thompson’s words in tow, Kala Jenkins, Pinion ag consultant, and her colleague Bill Penn, Director of Farm Program Services, have carved out their own theories on what to expect in farm bill 2023.

Here’s a highlight of what they’re tracking as we move through the year.

1. Program Limitations with FSA

USDA defines a small farm as one that sees gross cash farm income under $250,000. According to the agency’s 2021 data, large farms—operations that gross more than $250,000—account for 85% of ag’s market value.

But these income brackets often leave small producers emptyhanded when it comes to disaster programs, according to Senator Chuck Grassley (R-IA).

“The 2018 Farm Bill was intentionally written to help the largest farmers receive sometimes millions of dollars of subsidies from the federal government each year,” Grassley said to USDA Secretary Tom Vilsack in a Senate Ag Committee hearing. “I’m asking that you would now work with me to stop this needless abuse of taxpayer dollars.”

Related story: Crop Insurance, Production Costs, ERP Among Key Topics at Senate Ag Farm Bill Hearing

Penn, who formerly served as USDA’s Assistant Deputy Administrator from 1985 to 1993, doesn’t see the aid differences as abuse and wants aid to go to the producers who make the biggest difference.

“Congressmen always like to talk about how 10% of the producers are getting 70% of the payments, but those 10% of growers are producing 85% of our supply,” Penn says. “If the goal of aid is to ensure America’s needs are met, we have to offer protections to those that put in the work.”

2. AGI Calculations

Adjusted gross income (AGI) is used to determine eligibility for disaster programs, through means testing.

Penn formerly served as USDA’s assistant deputy administrator from 1985 to 1993. He says in the 1980’s, disaster programs means testing was determined through gross receipts rather than AGI. Penn believes AGI is a better test for means testing than gross receipts because it is a “net income” number rather than a gross revenue number.

Related story: Paul Neiffer: PARP – Will You Get Anything?

However, in the recent WHIP+ and ERP Programs, USDA used AGI as a test to determine if someone was a farmer. In Penn’s view, gross receipts is a better measure of who is a farmer when compared to AGI.

“If a farmer has a bad disaster year, he might have a negative net income or AGI. But his wife, a schoolteacher who has a $70,000 positive, non-farm income would push them out of WHIP+ eligibility for increased limitations due to their AGI,” he says.

Penn says when the government is carving-out a disaster aid plan, it must be careful what question it is trying to answer with balance sheet numbers, or aid won’t be inclusive.

But, Penn is concerned if AGI limitations are applied to crop insurance.

3. Crop Insurance Coverage

In the past 20 years, the Federal Crop Insurance Program has covered an average of 87% of all U.S. croplands that were eligible for the program.

So, is a climate angle how crop insurance should be viewed? Jenkins isn’t convinced. She says the bottom line is in making programs voluntary.

“If we focus solely on climate and conservation in all our farm bill initiatives, could we miss something in the literature that could make certain practices mandatory instead of voluntary? That’s the concern we’re hearing from growers now.”

Related story: Commodity Programs Might See a 12% Cut in the Proposed $1 Trillion Farm Bill

Beyond conservation, Jenkins hears whispers of Title XI programs taking an entirely different direction in 2023.

“I’ve heard chatter about whether we need to change the way some of these programs work today, like whole farm crop insurance programs versus the noninsured crop disaster assistance program.” she says. “Then there are also some stakeholders questioning whether we need to link insurance to conservation, while others don’t want it to be the main focus. The needle is all over the board.”

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

Employers Qualify for Tax Credit to Offset COVID-19 Paid Time Off

Thu, 22 Sep 2022 00:57:07 GMT

At this point in the pandemic, most employers have received a phone call that goes something like this. “Hi Boss, I was exposed to COVID-19. Do you want me to come in?” And in that moment, you run through 14,000 questions in your mind. Can we cover his or her schedule? Who had this person worked with before they knew they had been exposed? Can we afford to pay them for time spent at home? While those thoughts are going through your mind, your employee is worried about getting paid for required time off.

The Families First Coronavirus Response Act (FFCRA) signed into law on March 18, 2020 provides that eligible employees are entitled to paid sick time because of COVID-19, and employers are eligible for a tax credit to offset the expense.

Who qualifies as an eligible employee, how much time do they get and at what rate? Under the FFCRA, employees are entitled to:

a. Up to 80 hours of paid sick leave at the employee’s regular rate of pay (up to a maximum of $511 per day) where the employee is unable to work because the employee is quarantined pursuant to government order, is advised by a health care provider to self-quarantine and/or experiencing COVID-19 symptoms and seeking a medical diagnosis; or

b. Up to 80 hours of paid sick leave at two-thirds the employee’s regular rate of pay (up to a maximum of $200 per day) because the employee must care for an individual subject to quarantine (pursuant to government order or advice of a health care provider), or to care for a child (under 18 years of age) whose school or child care provider is closed or unavailable for reasons related to COVID-19.

What is the tax credit for employers? The FFCRA provides eligible employers with payroll tax credits to cover 100% of the qualified sick leave wages and qualified family leave wages paid from April 1, 2020, through December 31, 2020.

The FFCRA payroll tax credit includes:

1) Qualified sick leave wages;

2) Qualified family wages;

3) Qualified health plan expenses; and

4) Medicare tax credit.

According to an advisory from tax accountancy CliftonLarsonAllen (CLA), qualified sick leave wages are wages an eligible employer is required to pay under FFCRA for paid sick leave. Qualified family leave wages are wages an eligible employer is required to pay under FFCRA for expanded family and medical leave.

The tax credits can be claimed three ways:

1. On the Form 941, Employer’s QUARTERLY Federal Tax Return;

2. Offsetting Federal employment tax deposits for the quarter (the employer must account for the reduction in deposits on the Form 941 for the quarter); or

3. Filing Form 7200, Advance Payment of Employer Credits Due to COVID-19.

CLA shares this example of how the claims process works.

Employer pays $15,000 in qualified sick leave wages and qualified family leave wages during the 3rd quarter of 2020. The employer is required to deposit $18,000 in Federal employment taxes (including taxes withheld from its employees) for the 3rd quarter of 2020. The employer may keep up to $15,000 of the $18,000 of taxes the employer was going to deposit but is required to deposit the remaining $3,000 on its required deposit date. The employer will account for the $15,000 when it files its Form 941 for the 3rd quarter of 2020.

For more information, including extended family and medical leave details included in the FFCRA contact your accountant.

4 Bright Spots in the Post-Pandemic World

Thu, 04 Nov 2021 20:51:02 GMT

COVID-19 has disrupted and impacted every type of agriculture in every corner of the globe. The future will definitely look different from the past. In the long run, what opportunities could farmers harvest? Consider these emerging trends.

1. Home Cooking creates Demand

2019 was the first year Americans spent more money on food away from home versus money spent on food consumed in the home. But that trend is shifting due to COVID-19, says Dan Basse, president of AgResource.

“We will consume more meals in the home now than pre-COVID-19 days,” he says. “The food consumption skew favors an ‘American renaissance’ with home meal preparation.”

As consumers prioritize safety and food availability, expect this cooking-at-home trend to continue and increase demand.

2. Farmland Shines in Uncertain Times

Ahead of the COVID-19 outbreak in the U.S., R.D. Schrader, president of Schrader Real Estate and Auction Company, says farmland values were showing strength.

“It is very location dependent,” he says. “But we had some examples of the strongest competition we have seen at auction in the last five years.”

Tight land supplies, favorable interest rates, relatively high farmer incomes and strong interest for 1031 exchanges have kept farmland prices stable to higher. Combine those trends with COVID-19, and you have farmland poised to be a highly sought-after, safe haven investment option.

Case in point: In Nebraska, the statewide all-land average value for the year ending Feb. 1, 2020, averaged $2,725 per acre. That’s a 3% increase to 2019’s value and the first year-over-year increase since farmland values in the state peaked in 2014.
Over the years, farmland has been a strong diversification tool for investing. Schrader says in the past two recessions, farmland steadily outperformed the stock market:

During the dot-com bubble of 2000 to 2002, the S&P 500 dropped 44%. Meanwhile, row crop farmland returns increased by 18%.
During the financial crisis of 2007 to 2009, the S&P 500 dropped 46%. Meanwhile, row crop farmland returns increased by 26%.

“While there are times the S&P 500 runs ahead, it’s times like this when farmland will look really attractive,” Schrader says.

3. Farmers Create Resilient Business Models

For direct-to-consumer Tennessee producers Jennie Schutte and Walt Patrick, COVID-19 created angst — and opportunity. When the family couldn’t sell their beef, pork and lamb cuts at their local farmers markets earlier this year, Schutte knew it was time to be resourceful and creative.

“Social media, specifically Facebook and Instagram, have been our bread and butter,” Schutte says. “We have a newsletter, too. All of our advertising is on social media. We push information constantly.”

When supermarket shelves were stripped of essentials, including meat, earlier this year, Schutte started doing porch deliveries of their Pilaroc Farms (pronounced pile-a-rock) products. Since farmers markets have opened back up, the door-to-door deliveries are on hold, but the Pilaroc team is considering deliveries, and shipping, as part of the future business model.

“Jeff Bezos has totally spoiled us into thinking we’re supposed to have something on our porch within 24-to-48 hours,” Schutte says. ”Consumers are looking for more convenient options.”

To learn more from the owners of Pilaroc Farms about how to pivot your business model, visit AgWeb.com/Pilaroc

4. Agriculture Will Receive Respect

A great upside to COVID-19 is consumers are starting to understand how agricultural supply chains work, Basse says.

“Consumers have not had a relationship back to the farm gate,” adds Luke Chandler, chief economist for John Deere. “This crisis gives us an opportunity to tackle that challenge and look for the opportunities to connect with consumers so they can value the entire supply chain.”

Conflicted on Showing Livestock

Are we putting our kids in danger? Is this the right decision? I’ve never had those thoughts before as we headed off to show our pigs at a national show — but 2020 is different.

Everything feels like a battle in my mind these days, as coronavirus is a difficult enemy to battle.

Working with our showpigs allows us to focus on something other than COVID-19. When the opportunity presented itself to get the pigs to a national live show in July, we wanted to give it our best shot to get there.

Was the risk worth it? I hope so. The one thing I know about this virus is that it’s hard to know what’s right. No one agrees — not even the experts.

At the end of the day, we had to weigh out what was best for our family. Because really, that’s all any of us can do. ~Jennifer Shike, Farm Journal’s PORK Editor

USDA Leader Says Farmers Can Expect CFAP Round Two Next Month

Wed, 03 Nov 2021 19:08:08 GMT

When farmers applied for relief payments through the Coronavirus Food Assistance Program (CFAP), farmers were only guaranteed 80% of the payment they were eligible for. According to Bill Northey, USDA’s undersecretary for farm production and conservation, farmers can expect to receive the remaining 20% by the end of August.

According to Agri-Pulse , Northey said there should be enough money on hand to give farmers the remaining 20% of what they are due under the $16 billion CFAP, by the time signup for the program ends Aug. 28.

“We’d like to be able to do it earlier than that,” he said. “If we can look and see that we’re going to have plenty of dollars yet, of course we haven’t even announced the third group of commodities yet and we’re still partway through signup.”

Pro Farmer’s Jim Wiesemeyer said that as of July 6, $5.36 billion dollars in CFAP payments had been disbursed. The total includes $2.7 billion for livestock producers, $1.41 billion for non-specialty crops, $1.11 billion for dairy and $134.7 million for specialty crops.

CFAP 2.0

Northey says the USDA is awaiting direction from Congress on a new aid package. Analysts expect the next round of payments through the program to compensate farmers for losses that have occurred since mid-April. It seems that Northey expects Congress to allocate more aid for farmers.
“Congress has said very clearly that they recognize the losses are well beyond that $16 billion” being provided through CFAP, Northey said.

RELATED CONTENT:

CFAP Dairy Payments Now Top $1 Billion

Agriculture is Not Immune to Pandemic

USDA Clarifies Cattle Categories in CFAP Program

Thu, 28 Oct 2021 19:18:55 GMT

There have been a lot of questions about where specific groups of cattle fit into the categories outlined in the Coronavirus Food Assistance Program. USDA released some clarification as to where cattle fit in each category.

Check out this helpful chart from USDA:

Common Name	Description	CFAP Category
Newborn Calf	Calves from birth to days old	Feeder Cattle: < 600 lbs
Calf	Calves still nursing the cow, animals that generally weigh less than 500 pounds	Feeder Cattle: < 600 lbs
Bucket Calf	Orphan or newborn calf normally purchased when they are 1 to 10 days old	Feeder Cattle: < 600 lbs
Heiferette	A female bovine animal that has not calved and weighs more than 500 pounds; OR a heifer placed on feed following the loss of a calf or an open heifer placed on feed following the breeding season	Feeder Cattle: < or > 600 lbs, as applicable
Steer	A castrated male bovine animal that generally weighs more than 500 pounds	Feeder Cattle: < or > 600 lbs, as applicable
Weaner or Weaned Calf	Animal between 105 and 355 days coming from cow-calf	Feeder Cattle: < or > 600 lbs, as applicable
Backgrounded Cattle	Steers and heifers that are fed a warm up or conditioning ration are normally fed to approximately 700 pounds, and then sold as feeders or shipped to another feedlot to be finished for the slaughter market	Feeder Cattle: < or > 600 lbs, as applicable
Stockers/Feeders/Feeder Calves	Young weaned steers or heifers, weighing approximately 400-800 pounds usually grazing on pasture and/or feed ration to prepare for shipment to feeders intended for slaughter or selected for replacement stock	Feeder Cattle: < or > 600 lbs, as applicable
Yearlings	Calves between 1 and 2 years of age	Feeder Cattle > 600 lbs
Open Heifer	Non-pregnant female bovine	Feeder Cattle: < or > 600 lbs, as applicable
Replacement Heifers	A heifer that has been selected to be bred and placed in the beef herd	All Other Cattle
Bred Heifers	A female bovine that is pregnant with her first calf	All Other Cattle
First Calf Heifers	A young female that has had only one calf	All Other Cattle
Bred Cows	A female bovine animal that has borne at least one calf	All Other Cattle
Open Cows - Retained in Herd	(Non-pregnant) cows at the end of the breeding season	All Other Cattle
Open Cows - Slaughter	(Non-pregnant) cows at the end of the breeding season	Slaughter Cattle: Mature
Cows-Culled (Beef and Dairy)	A cow that is removed from the main breeding herd or dairy production for one or more reasons (i.e., age, poor production, physical ailment, poor disposition, genetic selection, etc.) and is generally sold for slaughter and not destined to be a replacement	Slaughter Cattle: Mature
Herd Bulls-Culled (Beef and Dairy)	A mature (approximately 24 months of age or older) uncastrated, male bovine removed from the main breeding herd sold for slaughter and not destined to be replacement	Slaughter Cattle: Mature
Herd Bulls (Breeding-Beef only)	A mature (approximately 24 months of age or older) uncastrated, male bovine used for breeding purposes	All Other Cattle
Finished Cattle (1200 lbs or more)	Cattle that have reached the optimal weight and conditions ready for slaughter	Slaughter Cattle: Fed
Fat Steer/Heifer (1200 lbs or more)	Cattle that have reached the optimal weight and conditions ready for slaughter	Slaughter Cattle: Fed

To see answers to frequently asked questions about CFAP related to the dairy industry, visit: www.milkbusiness.com/CFAP .

Last Chance to Apply for COVID-19 Aid

Fri, 20 Nov 2020 03:07:26 GMT

Dairy farmers have just two weeks left to apply for Coronavirus Financial Assistance Program (CFAP) payments. USDA will accept applications until September 11.

To date, dairy farmers across the country have received just under $1.7 billion in CFAP payments , with Wisconsin farmers pulling in $333 million and California producers receiving $251 million.

Overall, U.S. farmers have received more than $9.2 billion in CFAP payments, with USDA approving 557,592 applications.

The National Milk Producers Federation offers several ways to apply for aid.

USDA’s Farm Service Agency (FSA) offers multiple ways for you to apply for CFAP to meet your business needs. These include:

Apply Online: Producers with an eAuthentication account can now apply for CFAP via USDA’s CFAP Application Portal . Step-by-step instructions are available in the CFAP Application Portal User Guide . Applications are completed, electronically signed, and submitted directly to a local Service Center through this online system. Producers interested in creating an eAuthentication account should visit farmers.gov/sign-in to learn more.
Manually Complete Applications: Producers who are interested in filling out the CFAP application manually can download the application form, AD-3114 , to fill out and return to the FSA office at their local USDA Service Center. If you need more space, you should use the AD-3114A continuation form . Instructions for form AD-3114 and AD-3114 continuation are available for producers to reference when filling out both forms.
Fill Application with Payment Calculator: USDA’s CFAP Application Generator and Payment Calculator is an Excel workbook that allows producers to input information specific to their operation to determine estimated payments and populate the application form, which you can then print, sign, and submit to the FSA office at your local USDA Service Center. Microsoft Excel is required to use this workbook. A video preview with more information is available here .

One Month Left to Apply for Coronavirus Payments

Fri, 20 Nov 2020 03:07:17 GMT

Farmers have until Friday, August 28, to apply for Coronavirus Food Assistance (CFAP) aid payments at their local USDA Farm Service Agency office.

USDA reports this week that it has paid out $6.552 billion to 473,124 applicants. Of that, $1.286 billion has gone to dairy farmers for losses to milk checks brought on the COVID-19 pandemic.

The amount paid out to individuals to date represents 80% of their claimed COVID-19 losses. USDA is holding the other 20% in reserve to ensure that it has sufficient funds to cover at least 80% of applicants’ claims. Since $16 billion was allocated to CFAP, it’s very likely funds will not be exhausted.

Bill Northey, USDA’s undersecretary for farm production and conservation, says farmers can expect to receive the remaining 20% by the end of August .

For more information on the CFAP program, how to apply and where, click here .

One-Fourth of Dairy Farms Have Received CFAP Payments

Fri, 20 Nov 2020 03:07:00 GMT

USDA last week noted 7,700 dairy producers have applied for and have received $337 million in Coronavirus Food Assistance Program (CFAP) payments.

Unsurprisingly, Wisconsin had the most farmers apply (1,741 farms) and also received the most funds at $79,913,261.40. In California, 339 farms applied and received $44,318,353.44 in funds. Interestingly, the average payment made to farms in Wisconsin was roughly $45,900, whereas the average payment made to California producers was $130,732. Obviously, this discrepancy is directly tied to a larger average herd size in California. (It’s important to note that these figures are solely for milk production.)

Dairy fared as well as any commodity in the benefits offered through CFAP.

“This is a very generous program,” says Marin Bozic, a dairy economist with the University of Minnesota. “Dairy farmers can be thankful to USDA for the way CFAP was designed and implemented. And they should be thankful to the National Milk Producers Federation and the Minnesota Milk Producers Association for raising payments caps.

“Of all the sectors, dairy did the very best or near the top of all commodities,” he says.

Bozic notes that dairy farmers will be eligible for $6.20/cwt for milk produced in January, February and March. They will receive additional benefits for dairy cattle sold and corn silage and high moisture corn they held in feed inventory January 15.

Bozic notes that the $6.20/benefit paid for each of three month’s production, totaling $18.60/cwt, is either more than or equal to what trade association groups had requested.

Farmers can now sign up for benefits through their Farm Service Agency offices. Once they do, they should receive a check in about 10 days for 80% of the benefit they are due. For milk, that benefit is $4.96/cwt. The remaining 20% of benefits is being held back to see how many total benefits are applied for. USDA had strict budget limits. If money is left over, remaining benefits will be paid out as a proportion of the amount of money left. Dairy farmers could get the full $1.24 benefit remaining, some or none of it, says Bozic.