USDA Releases Details of Coronavirus Relief Package

USDA Releases Details of Coronavirus Relief Package
USDA Releases Details of Coronavirus Relief Package

This weekend, the USDA released an overview of the relief package it has put together to assist farmers and ranchers in the midst of the economic meltdown caused by COVID-19. Though we don't have specifics as to sign-up, applications, or timelines, we do know some details about the package's breakdown. 

Direct Payments

Details. The package provides $16 billion in direct support based on actual losses. Recipients of the payments will include:

  • Cattle: $5.1 billion
  • Dairy: $2.9 billion
  • Hogs: $1.6 billion
  • Row Crops: $3.9 billion
  • Specialty Crops: $2.1 billion
  • Other: $500 million

Producers will receive a single payment, determined using two calculations:

  • 85 percent of price losses that occurred January 1 through April 15
  • 30 percent of expected losses from April 15 through the next two quarters

Eligibility. Commodities eligible for direct payments are those that have seen a 5 percent or greater decrease in price between January and April. There will be a $125,000 payment limit per commodity, with an overall cap of $250,000 per farm or individual. Because payments are based on actual loss, producers should also be prepared to provide evidence to self-certify demonstrated losses.

Timing. We should know more about the program's deadlines by Wednesday, April 22. In the meantime we expect, but cannot confirm, that sign up will occur through County FSA offices and will begin in early May. Payments should be distributed beginning the end of May. Our expectation is that we will have more details over the next 3-5 business days.

Sign Up. Specifics detailing sign up and timing have not yet been released. Please check our COVID-19 USDA Relief page for more details as we receive them. Go to https://www.azfb.org/Public-Policy/Resources-and-Links/USDA-COVID19-Food-Assistance-Program-Resources

Commodity Purchase and Distribution

Details. In addition to direct relief payments, USDA will also partner with regional and local food distributors (501(c)(3) non-profits) to purchase fresh produce, dairy, and meat. USDA is expected to spend about $100 million per month in each of the three categories, for a total of $3 billion in total purchases. This program is meant to take advantage of existing relationships between producers, processors, distributors, and non-profits to help get excess product into the hands of those who need it. In contrast to traditional USDA buy-up programs, where the Department purchases entire truck loads of product, this is meant to be a "truck to trunk" program that creates ready-to-use combination boxes of fresh produce, dairy, and meat that consumers can use immediately. 

Eligibility. The food distribution program is a federal procurement program, meaning it is open to anyone who completes the Request for Proposal (RFP) and meets the contract standards to USDA's satisfaction. All products distributed through the program must be 100 percent US grown, processed, and distributed. It is also open only to fresh produce, dairy including fluid milk, natural and processed cheeses, fresh and some processed meats. 

Timing & Sign Up. The RFP is expected to open in the next few weeks, and USDA anticipates approving the first contracts within weeks of the first proposal submissions. Payment for the products will occur only after they've been delivered to the approved non-profit food distributor.