Webinar: Coronavirus Food Assistance Program (CFAP) in Nebraska: What You Need To Know (June 4, 2020)
Department of Agricultural Economics
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06/04/2020
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168
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Description
With Cathy Anderson, Production and Compliance Programs Chief, USDA Farm, Service Agency Nebraska State Office, and Brad Lubben, Extension Associate Professor and Policy Specialist, Department of Agricultural Economics, University of Nebraska-Lincoln.
The program provides direct financial assistance to agricultural producers to offset market supply chain disruptions caused by COVID-19. It is being implemented by FSA, with county offices across Nebraska accepting applications through Aug. 28, 2020. The webinar will present information on commodities covered under the program, payment rates and details on navigating the application process.
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- [00:01:26.490]Brad Lubben: Alright, we're ready to begin.
- [00:01:30.090]Brad Lubben: Good afternoon. I'm Brad Lubin I'm an extension egg policy specialist at the Department of the Department of Agriculture economics at the University of Nebraska, Lincoln.
- [00:01:39.210]Brad Lubben: I want to welcome you today on behalf of the Department and on behalf of our farm and ranch management team to the webinar today.
- [00:01:47.070]Brad Lubben: This is a part of a series of webinars, our farm and ranch management team and prepared to focus on issues relating to coven 19 and the impact on Nebraska agriculture.
- [00:01:57.450]Brad Lubben: You can find recordings of these sessions as well as a schedule of upcoming sessions on our and other resources on our website at FARM, NOT YOU nl 92 you
- [00:02:08.160]Brad Lubben: One resource that we do want to highlight as in here is the rest of rural response hotline as we're doing with these issues related to coven 19 and other challenges.
- [00:02:18.660]Brad Lubben: In times of stress, knowing where to reach out and wind. Reach out as a central
- [00:02:23.550]Brad Lubben: The rest of our response hotline can provide mental health counseling information regarding legal assistance financial clinics. Many mediation and more
- [00:02:33.450]Brad Lubben: The hotlines toll free legal number is 1-800-464-0258. In addition, a wealth of resources related to stress and wellness can be found at rural wellness.us l.edu that you see there on the screen.
- [00:02:49.320]Brad Lubben: Today's webinar is set up in webinar format so you don't directly interact with the speaker today, but you have an opportunity to submit questions via the chat box.
- [00:03:00.600]Brad Lubben: Located in the bottom of your screen so you can scroll down to the bottom of screen. Find the link to chat and open up the chat window for a question if you wish.
- [00:03:11.430]Brad Lubben: We will ask our speaker to address those questions as the time and presentational out so
- [00:03:17.700]Brad Lubben: Today I'm pleased to welcome Kathy Anderson, the production and compliance programs chief from the USDA Farm Service Agency Nebraska office.
- [00:03:26.670]Brad Lubben: To our program. Kathy as an expert on the sea fat program and many other farm and commodity programs from FC
- [00:03:36.600]Brad Lubben: And I can also say she has a farm background herself. She and I both grew up in southeast Nebraska Kathy grew up on a farm in between talent agent Brock
- [00:03:45.270]Brad Lubben: For those of you that are now scrambling to the map to figure out where that Sam. So welcome, Kathy to the program Cathy's gonna cover USGS coronavirus Food Assistance Program.
- [00:03:55.860]Brad Lubben: Which provides direct financial assistance to egg producers to offset both market price losses and market supply chain disruptions caused by coven 19
- [00:04:06.180]Brad Lubben: Is being implemented now by FSA and through county offices across the state. At least distantly or you've got chronically and so we look forward to visit with Kathy, about this program currently runs through August 28 Kathy. Welcome to the program and look forward to your discussion.
- [00:04:27.000]Cathy Anderson: Thank you very much.
- [00:04:29.520]Cathy Anderson: We greatly appreciate the opportunity to meet with everybody today and just get some information out to you about this coronavirus Food Assistance Program, or C fat as we call it.
- [00:04:41.520]Cathy Anderson: We know how vitally important this is to our Nebraska growers and livestock producers and so having the opportunity to do this is really critical for us. So thank you again. Brad for that.
- [00:04:55.710]Cathy Anderson: I just want to mention that our offices understand how important this is to you, and they've made it a priority.
- [00:05:02.670]Cathy Anderson: Our state executive director Nancy, Gianna understands that as well. So they're really working to try to assist you and to process your applications for benefits just as quickly as they can.
- [00:05:15.060]Cathy Anderson: Certainly, we've had a lot of interest, a lot of phone calls and a lot of applications, quite honestly, coming in already in Nebraska and so
- [00:05:24.060]Cathy Anderson: Our offices have a lot to deal with kind of all at once, but they're doing a fantastic job. And we have some very good information out. Also on a national safe app website that I want to talk to you about that I think will be helpful.
- [00:05:37.260]Cathy Anderson: And I know there has been some concern that we've heard from producers. Is this a first come first serve program.
- [00:05:45.150]Cathy Anderson: And safe apps been structured by the department to ensure the availability of funding for all eligible producers to apply and. So, due to that producers will receive 80% of their maximum total payment upon approval of the application.
- [00:06:00.840]Cathy Anderson: That remaining portion will be paid later if funds are available. So I want to ensure
- [00:06:06.210]Cathy Anderson: First and foremost that everyone understands that so that they're not concerned that it is something that's a first come first serve basis.
- [00:06:14.220]Cathy Anderson: Brad mentioned the environment that we're currently operating in all of us have certainly had to make adjustments our offices are no different.
- [00:06:23.370]Cathy Anderson: Currently our offices are not taking in person appointments, but they are doing business by phone, by email by fax
- [00:06:32.100]Cathy Anderson: Electronically by a variety of ways. A lot of our offices even have dropped drop off boxes in front of them. So, contact your county office.
- [00:06:42.330]Cathy Anderson: Find out the best way that you can work with them to get your sea fat application filed
- [00:06:47.190]Cathy Anderson: We are also going to talk about the fact that our national website has a tool on it a payment calculator that you can use to load your information.
- [00:06:56.940]Cathy Anderson: And then print out your CIF app application sign it and submit it to your FSA office. So that's been an excellent tool. And I think, quite a few producers have already use that
- [00:07:08.760]Cathy Anderson: With that, let me go ahead and just share
- [00:07:13.980]Cathy Anderson: Share the presentation.
- [00:07:19.950]Cathy Anderson: That we have today. And this presentation will be posted. So it will be available to you. We will also have it available on our Nebraska FSA public website. And so you will have it as a resource after this
- [00:07:51.270]Cathy Anderson: There we go.
- [00:07:55.020]Cathy Anderson: Okay, so we'll just start out with some general information, the C fat program, of course, comes from was implemented by funding created through the the cares Act, which we've heard quite a bit about
- [00:08:09.000]Cathy Anderson: See fab does provide direct assistance to you as an egg producer.
- [00:08:13.500]Cathy Anderson: For the effects of this pandemic this outbreak that we've that we've had. And they're $16 billion available for assistance nationwide. So the goal of this program is to provide
- [00:08:24.360]Cathy Anderson: As much assistance as possible within the parameters of the program and the funding levels.
- [00:08:30.330]Cathy Anderson: And it is there to address the challenges of both market disruptions and price declines that we've seen as a result of the pandemic and it's also implemented to help absorb some of the last sales increase costs. So those are essentially the goals of the program.
- [00:08:48.510]Cathy Anderson: Now, it's important to note, and I would guess. You probably read about this or maybe heard about this, that there's actually two funding sources.
- [00:08:56.370]Cathy Anderson: For this $16 billion. One is the cares Act itself. And that's $9.5 billion. The other funding source comes from our commodity credit Corporation
- [00:09:06.360]Cathy Anderson: Charter act and that's six and a half billion dollars. So even though there are two funding sources you as a producer or grower are going to make one application and that application is going to be for your short share of all eligible commodities nationwide.
- [00:09:23.700]Cathy Anderson: Just to kind of help you understand a little bit between the care Zach funding and the CCC act funding.
- [00:09:29.490]Cathy Anderson: The Cures Act targets losses that are due to the actual price declines from the middle of January to the middle of April, the CCC charter act funding is really targeted more to provide assistance for the ongoing market disruptions again due to the pandemic.
- [00:09:50.610]Cathy Anderson: So important to note that sign up for safe app is currently open and you can sign up for see fat through August 28 2020 so roughly a three month period.
- [00:10:01.260]Cathy Anderson: Now, I do know that there are some additional eligibility forms over and above the CIF application. And it's important to know that you need to have those submitted within 60 days of filing application.
- [00:10:13.350]Cathy Anderson: If you're a producer that has typically done business with FSA. You likely have many of these forms already on file. So you'll want to check with your county office to see if there's anything additional that you need to do.
- [00:10:27.930]Cathy Anderson: Now you can apply it to your local office since this is processed is one application nationwide that local office is going to forward that on to what we call your recording County and your recording county will process the application for payment.
- [00:10:44.520]Cathy Anderson: As I noted earlier, to ensure the availability of funding producers will receive 80% of their maximum total payment upon approval of the application and that remaining portion will be paid later as funds are available.
- [00:11:00.420]Cathy Anderson: So let's talk about what the eligible commodities and livestock are so our categories are non specialty crops and wool.
- [00:11:09.270]Cathy Anderson: Livestock dairy and specialty crops and in Nebraska those non specialty crops and will we're generally thinking of corn and soybeans.
- [00:11:18.270]Cathy Anderson: Sorghum certain types of wheat out sunflowers canola and millet for livestock, we're talking about cattle hogs lambs and yearlings
- [00:11:27.930]Cathy Anderson: Dairy we're looking at the actual milk production that a producer had for the first quarter at 2020 and for specialty crops, there is a there is a broad List of specialty crops. So if you're a producer of a specialty crop.
- [00:11:43.110]Cathy Anderson: I'd encourage you to go to that national safe app website and and since I'm going to mention that many times, I'll tell you right now, what that is. It's farmers.gov forward slash CF AP and on that website you'll find information on all of these commodities.
- [00:12:01.650]Cathy Anderson: And as well as the tool that we talked about that. You could use for applying
- [00:12:08.490]Cathy Anderson: So we do want to talk about and take note of what's not eligible. There are some types of wheat.
- [00:12:14.610]Cathy Anderson: And alfalfa poultry and sheep over two years are just amongst some of the things that are not eligible
- [00:12:21.750]Cathy Anderson: But do know that USDA recognizes maybe some of these commodities, there could be additional information available that would show that they meet the eligibility criteria. If you're a producer of a commodity. That's not eligible
- [00:12:35.010]Cathy Anderson: Know that USDA is soliciting information to identify those additional commodity. So again, you can go to that farmers.gov see fab website.
- [00:12:44.310]Cathy Anderson: There is a place where you can access. I think it provides both and address. You can mail information to our way to access a website to provide information electronically.
- [00:12:54.960]Cathy Anderson: Now you should note that you should submit that information by June 22 so please ensure you take a look at that. If you feel you have information that would be helpful there.
- [00:13:07.440]Cathy Anderson: Okay, this slide is is really very important to note
- [00:13:11.880]Cathy Anderson: There is a an ownership and a price risk factor for CIF app eligibility and particularly with regard to price risk we are, we're looking at any production.
- [00:13:23.550]Cathy Anderson: Sales or inventory. That's not subject to an agreed upon price in the future through a forward contract or an agreement or some other similar type of document.
- [00:13:34.140]Cathy Anderson: So keep in mind as you're completing your application that you need to evaluate price risk as we go through each of the eligible types of commodities, we'll talk about what that price risk factor is I will make a comment here at this point also later.
- [00:13:50.370]Cathy Anderson: That there has been one clarification that we receive just in the last day or so. And that is when with regard to livestock.
- [00:13:59.070]Cathy Anderson: Will be talking about livestock. That's an inventory from mid April to mid May and there's no longer a price risk requirement for that inventory livestock. So again, we'll mention that later in the presentation. But I did want to comment on that at now as well.
- [00:14:19.140]Cathy Anderson: So we talked a little bit about some of the program eligibility requirements, over and above the see fat production eligibility itself conservation compliance for 2020 is it is a requirement. So that's being in compliance with those highly readable and and wetland conservation rules.
- [00:14:36.930]Cathy Anderson: Applicants as well as if the applicants and entity. This would apply to any entity members applicants must meet an adjusted gross income limitation of $900,000
- [00:14:48.030]Cathy Anderson: If that adjusted gross income limitation is exceeded, then you may still be eligible if at least 75% or more of your income is derived from farming and ranching
- [00:14:58.590]Cathy Anderson: We're always looking at this AGI limitation as an average of three years. So, for the purpose of eligibility, we're going to consider your average AGI from 2016 2017 and 2018
- [00:15:14.310]Cathy Anderson: Note that there is a payment limitation Percy fab of $250,000 per person for all commodities combined
- [00:15:24.120]Cathy Anderson: Now, under the sea fab program specifically, there's an optional payment limitation increase for applicants who are corporations LLC.
- [00:15:35.190]Cathy Anderson: Or limited partnerships so specific to those three types of entities and there's an opportunity to increase that payment limitation to either $500,000 or $750,000
- [00:15:48.180]Cathy Anderson: And and that could occur if you there are members, partners, our stockholders that contribute 400 hours or more
- [00:15:56.250]Cathy Anderson: Of active personal labor and active personal man management or combination of those two if you feel that you have members that qualify for that and you are one of these three types of entities. That's something you will certify to write on the CIF application itself.
- [00:16:18.900]Cathy Anderson: So we'll talk a little bit now about the CIF app application and the other forms that are needed. Again, there is just one application per producer and as you complete that application. Just remember, it's to represent your total share production nationwide. So just your share
- [00:16:38.490]Cathy Anderson: This really is a producer certification program so very much relying on you as a producer to provide us those numbers that we need on this application.
- [00:16:50.640]Cathy Anderson: And retain any documentation that you would have to substantiate where it where those quantities.
- [00:16:58.080]Cathy Anderson: Were derived from so please ensure that any type of records that you have you hold on to for at least three years.
- [00:17:05.820]Cathy Anderson: We do anticipate that we will be doing spot checks under this program and so will need to have those records. If you are selected for a spot check
- [00:17:15.180]Cathy Anderson: And I realized in some situations, if you're if you're maybe not selling that in an elevator, for instance, perhaps you're using it as feed for your own livestock keep good records of what you've had and what you've used
- [00:17:28.530]Cathy Anderson: Even if those are just your own records that you're keeping or if you have perhaps someone that could verify that as a third party any records you have will be useful.
- [00:17:40.620]Cathy Anderson: The completed safe application can be submitted to any USDA service center and that service center will forward it on to your recording county for for processing.
- [00:17:54.090]Cathy Anderson: So as we talked in addition to the CIF application. There's other forms we may need to determine your eligibility.
- [00:18:01.950]Cathy Anderson: You'll see there the average adjusted gross income forms the form to certify your income from farming and ranching, it seems that 75% conservation compliance forums as well.
- [00:18:18.090]Cathy Anderson: This gives you a view of what the CIF app application itself looks like. And it's the ad 3114 so you can see on page one.
- [00:18:28.710]Cathy Anderson: Part A is a producer agreement and that really outlines for you what your responsibilities and your obligations are as a producer and
- [00:18:37.710]Cathy Anderson: You'll note item three, that it says any production sales inventory eligible for payment must be subject to price risk. So again, we just want to raise that up to you and emphasize that so that you're aware of that.
- [00:18:52.350]Cathy Anderson: So there's essentially two sides to this form, and it breaks down into sections for each of the eligible commodities and then of course part H. As you see on this screen is is where you would request that increased payment limitation for corporations LLC or LPS
- [00:19:13.830]Cathy Anderson: So let's talk a little bit about what we refer to as non specialty crops and wool. What are the eligible commodities.
- [00:19:22.260]Cathy Anderson: So this gives you a list of the eligible commodities and you'll see again, you know, corn, soybean sorghum sunflowers millet
- [00:19:30.690]Cathy Anderson: Which you'll probably notice that you don't see on this list is hard red winter wheat. And so for our wheat producers in Nebraska, many of them raise hard red winter wheat. Currently, that's not eligible proceed fat.
- [00:19:47.130]Cathy Anderson: There is a whole list of eligible types and intended uses of crops that fall into these categories, but I would make a special note that crops that were intended for grazing.
- [00:19:57.270]Cathy Anderson: Are not eligible proceed fat benefits and Nebraska. Once we get a new program, one of our next questions normally is. What about seed corn. What about popcorn.
- [00:20:09.000]Cathy Anderson: What about corn for signage. So we made a special note here that seed corn popcorn forage sorghum and courtside college are all eligible. So if you have questions about a certain type of crop and intended use, contact your county office and they'll be able to assist you with that.
- [00:20:27.900]Cathy Anderson: With regard to the seed corn popcorn and corn for silent, we did want to give a little additional information there because we know it impacts a number of producers.
- [00:20:37.470]Cathy Anderson: So for instance, for corn that was taken for signage, you'll need to convert that back to bushels of commercial corn.
- [00:20:45.120]Cathy Anderson: How do you do that. Well, essentially, you take the tons of silence that you harvested times a factor of 7.9 for
- [00:20:52.890]Cathy Anderson: Your county office has conversion factors for several different types of crops. So if you have a different crop that perhaps was taken for siloed your hay.
- [00:21:01.380]Cathy Anderson: And you need to ensure its eligible and then find out how to convert that over to bushels. Please contact your local office and they'll help you with that.
- [00:21:10.980]Cathy Anderson: If you have popcorn.
- [00:21:14.700]Cathy Anderson: You can use the yield of the other commercial corn on the same farm and that is a required method if that's available.
- [00:21:22.500]Cathy Anderson: So you'd simply take that commercial corn yield and multiply by your popcorn acres to get your total production from those acres
- [00:21:29.610]Cathy Anderson: If you did not have other commercial corn on the same farm, then we have a factor that you can use and you would take that popcorn 11 pounds and divided by 29.7 to get a yield per acre of corn, then you would multiply that by the popcorn anchors.
- [00:21:48.540]Cathy Anderson: For hybrid seed corn. There's a couple of methods you can use it is your option to choose which of these methods to use, but whatever method you choose must be used for all the hybrid seed production, they have
- [00:22:02.160]Cathy Anderson: I should I should clarify that it must be used for all the hybrid seed corn production on on that farm that same method.
- [00:22:09.030]Cathy Anderson: So again, you could use the yield from the commercial corn grown on the same farm or you could use the commercial corn equivalent that's in your contract to determine payment.
- [00:22:19.650]Cathy Anderson: If that commercial corn equivalent is based on harvested commercial production.
- [00:22:24.570]Cathy Anderson: Now there is a cap to that that commercial corn equivalent can't exceed 120% of the county average yield.
- [00:22:31.890]Cathy Anderson: And again, if you have hybrid seed corn and you're using that calculation, contact your office and they'll, they'll assist you with what that county average yield should be for purposes of that cap.
- [00:22:46.500]Cathy Anderson: So let's talk a little bit about how these eligible commodities were actually determined by USDA for purposes of see fat. Well it apartment evaluated whether or not there was a 5% decline in futures prices between the weeks of mid January to mid April.
- [00:23:06.030]Cathy Anderson: As a producer. What do you need to furnish with the CIF app application.
- [00:23:12.000]Cathy Anderson: Or for purposes of the non specialty crops and will, you're going to be completing Part D on the at 3114
- [00:23:19.410]Cathy Anderson: And you can see on this slide, essentially, that you're entering the commodity. So there's, again, there was a whole list of commodities that are eligible
- [00:23:27.120]Cathy Anderson: So if you go to the tool that will will talk about. There's a drop down where you can choose which commodity you're entering on the application.
- [00:23:36.720]Cathy Anderson: You're going to enter the unit of measure. So for instance bushels. You're going to enter what your total production wise. This is just total production.
- [00:23:47.340]Cathy Anderson: But then an item 16 you're going to enter the production that was not sold as of January 15 2020
- [00:23:58.290]Cathy Anderson: So keep in mind that the number that you're entering and that item 16 must be subject to price risk.
- [00:24:08.100]Cathy Anderson: So let's talk just a little bit about what that means and and
- [00:24:12.420]Cathy Anderson: In the last couple of days. The National Office has provided some additional guidance out to producers and also to FSA offices.
- [00:24:22.050]Cathy Anderson: About how price risks should be considered under certain types of contracts. So this chart that you see on this slide is is something newly available this week.
- [00:24:32.040]Cathy Anderson: It is out on the national Seif app website. So it's there for your reference. So you can see here
- [00:24:38.460]Cathy Anderson: In the top portion of the chart that essentially the contracts that have been determined eligible for see fat are a basis of basis fixed
- [00:24:47.610]Cathy Anderson: Situation. There's where there's been no price established at all on the on the green a delayed price or a different price contract.
- [00:24:55.980]Cathy Anderson: And then there's several types of contracts referenced as ineligible for see fat and we recognize that there may be an unlikely are additional types of contracts that you may have.
- [00:25:08.850]Cathy Anderson: Hopefully this chart gives you an insight into what would be considered eligible and what would not be considered eligible with regard to losing price risk and keep in mind we're looking at that date of January 15 2020
- [00:25:23.190]Cathy Anderson: If you have a particular question with regard to a contract, it's probably best to contact your county office and then they can work with us here at the state office to get some additional clarification, if needed.
- [00:25:38.400]Cathy Anderson: So with regard to this, I do want to just give you an example. So hopefully it helps illustrate a little bit better how price risk comes into play.
- [00:25:47.640]Cathy Anderson: So if we have an example where we say, Joe farmer has 6500 bushels. And it's Ben's on January 15 2020
- [00:25:56.520]Cathy Anderson: And Mr. Farmer executed a forward price contract on 5000 bushels. On January 10 2020 so he was five days before this this critical January 15 date with the forward contract.
- [00:26:09.810]Cathy Anderson: So that locked in a specific price for the delivered quantity. So, Mr farmer would report 1500 bushels of 2019 production not sold in that item 16 that we referenced on the previous slide.
- [00:26:28.560]Cathy Anderson: So total production. This example item 15 would reflect the 6500 bushels. And item 16 would reflect the 1500 bushels that were still eligible
- [00:26:41.340]Cathy Anderson: Do you want to also note for purposes of the non specialty crops and wall that production. That is a praise from failed acres. It was never harvested is not eligible for seek out
- [00:27:01.740]Cathy Anderson: So,
- [00:27:03.630]Cathy Anderson: As far as the payment rates for the non specialty crops. You can see the chart with all the crops here on the next two slides.
- [00:27:12.210]Cathy Anderson: And you're going to note there's two columns you remember we talked about this to funding sources. So for instance, with regard to corn, you've got a 32 cent per bushel payment under the cares act.
- [00:27:23.670]Cathy Anderson: And you've got a 35 cent per bushel payment under the CCC act, you will receive one payment as a producer and you're only making one application. So your total payment for whatever production is eligible is going to be 67 cents per bushel.
- [00:27:41.460]Cathy Anderson: So this chart just shows the rest of the crops and the determined payment rates.
- [00:27:53.940]Cathy Anderson: So as far as non specialty crops. What's eligible production will, it's the 2019 total production not sold as of January 15
- [00:28:03.990]Cathy Anderson: But that can't exceed 50% of the total 2019 production so that comparison determines your eligible quantity and once that eligible quantity has been determined. It's then multiplied by 50% and then multiplied by the cares factory.
- [00:28:24.150]Cathy Anderson: Under the CCC charter ACH payment. We're going to use essentially the same quantity and then multiply it by the CCC rate.
- [00:28:35.610]Cathy Anderson: So your total payment will be the sum of those two
- [00:28:44.190]Cathy Anderson: So this, this goes back to our earlier example with Joe farmer and again you can see total production reflected in item 15 and just that eligible production that was was not priced but still owned as of January 15 2020
- [00:29:02.940]Cathy Anderson: So this chart just gives a little further explanation of the example we know the 2019 production not sold was 1500 bushels.
- [00:29:13.380]Cathy Anderson: Keep in mind, we're going to take that total production of 6500 bushels and multiply by 50% for that first comparison.
- [00:29:22.350]Cathy Anderson: Is the production not sold that we have as of January 15 exceed 50% of our total 2019 production. So to do that, we're going to compare it to the 3250 bushels.
- [00:29:34.770]Cathy Anderson: And of course the 1500 bushels is smaller. So that's what's going to be used for the payment calculations and you can see in this case that
- [00:29:44.280]Cathy Anderson: We have the care Zach payment and we have the CCC funds payment. This example is for soybeans. And so you see those two amounts there and the total payment for the producer after adding both of those together.
- [00:30:02.850]Cathy Anderson: Okay, so that was non specialty crops. Let's talk about livestock and what's eligible. So first we need to talk about an eligible producer. Well, essentially, that's a person or legal entity that shares in the risk of production and it is important to keep that in mind.
- [00:30:23.880]Cathy Anderson: I do want to note that a contract rower who does not own the livestock will still be considered a producer an eligible producer for see set purposes. If the contract allows the grower to have a risk in the livestock.
- [00:30:39.930]Cathy Anderson: And livestock owners and contract growers who are at risk and have a share of the livestock available for marketing.
- [00:30:46.950]Cathy Anderson: Or would have had a share of the livestock hadn't been marketed are eligible livestock producers. So a simple example with the contract grower. And again, I know real life examples are often more complicated.
- [00:30:58.320]Cathy Anderson: But here's a simple example, we could have a situation where producer. A owns 95 head of cows and five bowls producer be cares for producers as livestock throughout the calendar year for 75% of the calf crop so producer. A would complete his CIF application for all other cattle.
- [00:31:20.370]Cathy Anderson: With it with a number of 100 so that'd be the 95 head of cows and the five goals.
- [00:31:26.130]Cathy Anderson: And that would go under all other cattle category, we're going to talk about the livestock categories here in a minute.
- [00:31:32.610]Cathy Anderson: For his share of the Cavs he would list them under in the category of those cattle less than 600 pounds, so he has share would just be 24 calves.
- [00:31:43.530]Cathy Anderson: Producer be or the contract grower would simply complete an application for feeder cattle less than 600 pounds for his share of those calves and that would be 71
- [00:31:57.720]Cathy Anderson: Again, what's eligible livestock or why or why, why, why did we determine certain types of livestock eligible. What's the livestock that realized a 5% or greater national market price decline between the average for the week of mid January relative to the average for mid April.
- [00:32:19.230]Cathy Anderson: And the national payment rates have been determined based upon those price declines.
- [00:32:25.560]Cathy Anderson: So I want to take special note of this chart.
- [00:32:29.370]Cathy Anderson: I think one of the things that we want to be sure is very clear for all of our livestock producers who are applying proceed FAB is that we need you to list each of these categories on your application.
- [00:32:42.570]Cathy Anderson: If you complete the application using the tool on the website. It will take you through each of these categories and then print out your application with these listed
- [00:32:52.680]Cathy Anderson: Another option, you might take is to just print the application. The form off yourself and completed.
- [00:32:59.490]Cathy Anderson: So the form itself does not break down into each of these categories. So you need to be sure that you're looking at these categories. Again, the websites very helpful with that and list all of your numbers, according to those specific categories.
- [00:33:15.780]Cathy Anderson: That will help so that your county office doesn't have to have follow up with you and make additional contact to define what those categories were
- [00:33:27.210]Cathy Anderson: This is a chart of common livestock types that the national office has included on the farmers.gov see fat website and I would really encourage you to go out and take a look at this chart.
- [00:33:43.410]Cathy Anderson: I think it's really going to assist you with knowing what type of animals you have that you think are eligible for the CIF application and just where do they fit in those eligible classes.
- [00:33:55.470]Cathy Anderson: So this shows you part of that chart. The next slide shows a continuation. And I think that that's really going to assist you in in getting that application filled out correctly the first time.
- [00:34:09.630]Cathy Anderson: I do want to note as far as the category of slaughter cattle fed cattle another clarification that we recently have
- [00:34:18.660]Cathy Anderson: Is that that that category includes cattle with an average weight in excess of 1200 pounds. So previously, there was a reference, I believe, to 1400 pounds.
- [00:34:29.940]Cathy Anderson: And now it's been clarified that it's anything in excess of 1200 pounds which yields an average carcass weight in excess of 800 pounds and its intended for slaughter.
- [00:34:44.430]Cathy Anderson: So this chart shows you again, remember that we have the two sources of funding. So it's showing you the payment rate under the cares act.
- [00:34:54.360]Cathy Anderson: And the payment rate under the CCC funding and you're going to know that those are are different as they are for grains.
- [00:35:02.700]Cathy Anderson: One thing that is specifically different here, however, is for grain were essentially using the same quantity, the same eligible number and multiplying it by both of these rates.
- [00:35:14.370]Cathy Anderson: For livestock, there are differences in the livestock that are eligible for the care Zach payment which we refer to part one and the livestock that that is eligible for the CCC payment which we refer to as part two.
- [00:35:30.540]Cathy Anderson: And we'll talk a little more about that.
- [00:35:33.900]Cathy Anderson: We talked about cattle will just mention also the category of pigs means any swine weighing less than 120 pounds hogs means any swine 120 pounds or more and lambs and yearlings are all sheep that are less than two years old.
- [00:35:52.200]Cathy Anderson: So as far as eligible livestock, we are talking about livestock owned on January 15th and sold between January 15 in April 15 2020
- [00:36:04.920]Cathy Anderson: And in those sales. You can also include any offspring that was born from that January 15 inventory
- [00:36:13.350]Cathy Anderson: Now the second category we look at. Is any of that eligible livestock. That's actually an inventory from April 16 through May 14
- [00:36:24.120]Cathy Anderson: So the expectation would be that you've got sales livestock that's going to be eligible for part one payment and you've got inventory livestock ELIGIBLE FOR A PART two SO THE SAME livestock would essentially not be in those same two categories.
- [00:36:44.850]Cathy Anderson: We would also note as far as eligible livestock that if you have dairy livestock, that's no longer being used for dairy production and it's entered the beef cattle market that is considered to be eligible livestock under this program.
- [00:36:59.370]Cathy Anderson: So what is eligible livestock well as any livestock. That's actually being used for dairy production or intended for dairy production. And that's because we have a category for dairy and for the milk production that we issue see fat benefits on
- [00:37:15.120]Cathy Anderson: But I also want to be sure you take note of this livestock that you didn't actually own on January 15 you purchase purchase it sometime after January 15 2020 but you sold it honor before April 15th is not eligible under this program. So be sure to take note of that.
- [00:37:38.040]Cathy Anderson: So when we talk about the issue of price risk for livestock.
- [00:37:43.080]Cathy Anderson: A clarification again that we just received is that this term is only applicable to that livestock that was sold between January 15 and April 15 2020
- [00:37:55.830]Cathy Anderson: Livestock that subject to an agreed upon price and the future through a forward contract agreement or similar binding document as January 15 needs to be evaluated.
- [00:38:05.370]Cathy Anderson: There is more definition and guidance coming from our national office.
- [00:38:10.410]Cathy Anderson: Our state director was in contact with our national office just this morning and they've indicated that they are working on some additional guidance, similar to what was done with the non specialty crops so that producers know how to consider certain types of contracts.
- [00:38:27.480]Cathy Anderson: And again, please do know that livestock eligible for payment as part of that inventory that was held between April 16 and and may 14 does not fall under the price risk requirement.
- [00:38:46.410]Cathy Anderson: An additional note about dairy cattle dairy cattle that are no longer use for dairy production. That's the key.
- [00:38:53.790]Cathy Anderson: And they've entered the beef cattle market are eligible for see fat. So if they were, for example, dairy coal cows, they would go in the slap slaughter cattle mature cattle category.
- [00:39:05.580]Cathy Anderson: If their dairy cabs. Then they probably go in the feeder calves either less than or greater than 600 pounds is applicable.
- [00:39:14.100]Cathy Anderson: dairy cattle that are used for dairy production are intended for dairy production are not eligible for the CIF app livestock payment. Again, we also we have a milk production payment which we will talk about. And so the eligibility for see factors through that milk production.
- [00:39:34.260]Cathy Anderson: The following sales and inventory information is required from you as a livestock producer for this application.
- [00:39:41.850]Cathy Anderson: We will need the own inventory of eligible livestock as of January 15 and any offspring from that inventory that were subject to price risk.
- [00:39:52.560]Cathy Anderson: And sold sometime between January 15 and April 15 we have had the question, What if I owned the the livestock. On January 15 and sold them on January 15
- [00:40:04.380]Cathy Anderson: As long as you own them on January 15 you may have sold them yet that day that they're still considered to be eligible under the sales category.
- [00:40:14.160]Cathy Anderson: And you're going to be loading that on item 21 on that CIF application, which is the at 3114
- [00:40:25.050]Cathy Anderson: Now the second category, which we call the inventory or part to payment category is the highest own inventory of eligible livestock between AGAIN APRIL 16 and may 14
- [00:40:35.490]Cathy Anderson: It's up to you as a producer to pick a day in that timeframe and determine what your highest inventory number was. And that's going to be entered on item number 22 on the CIF app application.
- [00:40:49.110]Cathy Anderson: So this just gives you a view of that particular section of the CIF application, which is party.
- [00:40:55.560]Cathy Anderson: You're going to list an item 19. Remember we talked about those eligible categories of livestock. So it's important for you to list those out here is applicable for your operation.
- [00:41:05.430]Cathy Anderson: And enter the number of head and then an item 21 you're going to enter that that sales number from January to April and an item you're going to enter that number of had that you still had an inventory for mid April through mid May.
- [00:41:23.730]Cathy Anderson: Now, you'll know that with all of these categories. There's a CEO see use blocks EEOC referring to our FSA county committees and they will review these applications.
- [00:41:34.650]Cathy Anderson: And if they have questions, they could request you to provide some additional information. So it based on that information they determined that
- [00:41:43.830]Cathy Anderson: A sales number and inventory number needed to be adjusted. They would use this section for that adjustment and you would be notified as an applicant of any of that action that was taken and provided appeal rights as applicable.
- [00:42:01.440]Cathy Anderson: So keep in mind, again, the part one. Part two payment, two different sources of funding.
- [00:42:08.040]Cathy Anderson: You'll complete your application with your eligible livestock and which category, they fall into FSA will use that then to determine which of those receive the care Zach funding and which of those received the CCC funding.
- [00:42:21.210]Cathy Anderson: So for part one cares act the payments simply calculated by multiplying the number of livestock sold between those time frames by the payment rate per head.
- [00:42:32.850]Cathy Anderson: And just a reminder there that we are looking at ownership as January 15 and you can include offspring from that livestock that was owned at that time.
- [00:42:41.970]Cathy Anderson: The Part two is calculated simply again by multiplying that highest inventory number that you select in that time frame between mid April and mid May by the applicable payment rate per head.
- [00:42:56.250]Cathy Anderson: And so, this slide shows you what those payment rates are
- [00:43:02.430]Cathy Anderson: So I know that there's a noticeable difference between the part one payment rate and the part two payment rate for the different categories of livestock so
- [00:43:11.220]Cathy Anderson: Just as a reminder, the care Zack funding is trying to target the losses that were due to the price declines that USDA could determine actually happened between January 15 April 15 and the CCC funds are really targeting additional ongoing market disruption costs due to the pandemic.
- [00:43:34.980]Cathy Anderson: So this is just an example to try to help you understand how this works. In this example, DJ be Cattle Company had the following livestock and inventory on January 15 2020 so we had 500 bread cows 15 herbals and 50 replacement heifers
- [00:43:55.440]Cathy Anderson: So the first question is, what's the eligible livestock that I owned as of January 15 but sold by April 15
- [00:44:03.360]Cathy Anderson: So between that time DJ be certified that they sold 10 whole cows and also sold seven baby calves that were born after January 15 so there's a reference back to that offspring from the inventory that was owned as of January 15
- [00:44:22.980]Cathy Anderson: As far as their inventory number that's going to be eligible for the part two payment TJ be certified that is highest inventory between mid April and mid May was 480 cow calf pairs.
- [00:44:36.840]Cathy Anderson: 18 hurdles and 75 replacement heifers now you'll remember that there were not that many hurdles or heifers
- [00:44:46.410]Cathy Anderson: On January 15. So one thing I want you to take note of is when you're reporting this inventory number that you still have as mid April the mid May that can include livestock that you purchased after January 15
- [00:45:03.090]Cathy Anderson: So for purposes of this application.
- [00:45:06.660]Cathy Anderson: You see that the eligible lifestyle categories have been entered their feeder cattle less than 600 pounds slaughter cattle mature cattle and then an all other cattle category.
- [00:45:17.520]Cathy Anderson: And for purposes of the sales number. There's the seven baby calves and the 10 cold cows listed and for purposes of the inventory number
- [00:45:27.420]Cathy Anderson: We've got 480 calves that we had from as offspring from the cows that we still had and then in the all other category.
- [00:45:36.210]Cathy Anderson: Was the balance of the remaining animals that we had. So that was 573 so that's going to include the cows that we still own as well as the the cat, excuse me, the other animals that were in inventory. Again, I would, I would ask you to reference the
- [00:45:56.310]Cathy Anderson: The National website for each of these categories. So you can determine what that definition is and where each of the different types of animals that you have what category, they would fit into
- [00:46:09.510]Cathy Anderson: So there's our 573 480 cows 18 bowls and 75 heifers
- [00:46:18.990]Cathy Anderson: So in this example, if all eligibility requirements are met the estimated gross see fat payment out calculation. So this would be before we're multiplying it by 80%
- [00:46:30.750]Cathy Anderson: Would be as follows. And you can see on the chart here how we're breaking this down into the sales the head, the head that are
- [00:46:39.690]Cathy Anderson: Eligible for sales at those payment rates as well as the inventory at the $33 payment rate.
- [00:46:47.340]Cathy Anderson: We're going to calculate each of those under the two sources of funding and add those together. And so again, as a producer or livestock grower, you'll see one payment for a total in this example of $36,393
- [00:47:03.360]Cathy Anderson: As far as dairy.
- [00:47:05.820]Cathy Anderson: dairy operations, who produce milk for January, February, March of 2020 are eligible for C fat program benefits.
- [00:47:14.550]Cathy Anderson: If you are a dairy operation that dissolved. We've recently been advised by the national office that they're going to provide some additional clarification, so you can file your application.
- [00:47:26.760]Cathy Anderson: Indicate with your application that you dissolve some were in that first quarter of the year and just know that your FSA office is waiting on some additional guidance from the national office before they can approve that and issue payment for that.
- [00:47:43.080]Cathy Anderson: Eligible production is going to be milk produced for the month of January, February, March, and that can include any dumped milk during those months.
- [00:47:52.410]Cathy Anderson: And do note that dairy production covered under the dairy margin Coverage Program that dairy revenue protection program or other dairy revenue insurance.
- [00:48:03.210]Cathy Anderson: maintains his eligibility for seat that we've had some questions from producers about insurance programs or other FSA programs did those impact their see fat eligibility and they do not
- [00:48:17.310]Cathy Anderson: So again, dairy producers are going to self certify that milk production for that first quarter, they can use their milk marketing statements from January, February, March, or any records of dumped milk.
- [00:48:31.740]Cathy Anderson: You will not be required to provide those documents. And in fact, if I say will not keep those documents on file at the time you apply. You just need to retain those in your records so that if you're asked to provide them for Spacek
- [00:48:46.350]Cathy Anderson: They're available. And again, you should retain those for at least a period of three years.
- [00:48:52.560]Cathy Anderson: We do want to note that members of very operations operating as a joint venture without a tax ID number will just apply separately. So each of the members of that joint venture would complete their own application for their share of the milk production.
- [00:49:10.350]Cathy Anderson: And this just shows you that portion of the 3114 application where you would enter your dairy production information.
- [00:49:22.350]Cathy Anderson: So the see fat payments for eligible milk production again or the seller of results of to calculations, the part one payment is point 0471
- [00:49:33.600]Cathy Anderson: cents per pound and the part two is actually takes your production and multiplies it by a factor of 1.014 and then multiplies it by point 0147 cents per pound.
- [00:49:52.320]Cathy Anderson: Want to talk a minute about value loss and specialty crops.
- [00:49:57.270]Cathy Anderson: So if you see this section on the application of value loss some producers have wondered if they are applying on a non specialty crop, for instance, do I need to load something in there and reflect my actual value loss, you do not
- [00:50:11.340]Cathy Anderson: Have value last crop is a crop where we can't really measure a loss in production.
- [00:50:17.610]Cathy Anderson: With a unit, such as bushels. And so we actually look at a loss and value in dollars and currently there are no value last crops that
- [00:50:28.080]Cathy Anderson: USDA has determined to be eligible. However, they are looking at some additional information and data.
- [00:50:35.190]Cathy Anderson: Just for example a value last crop could be aqua culture or floor culture. So as as those crops are determined to be eligible, there will be additional information that will be coming out.
- [00:50:49.290]Cathy Anderson: specialty crops. If you're a producer of a crop that was not included on in the non specialty crop list.
- [00:50:56.850]Cathy Anderson: It may very well be included in the specialty crop list there is a broad List of crops. And so we would encourage you to contact your county office to see if the crop you produces eligible
- [00:51:09.900]Cathy Anderson: Now two crops, we know of in Nebraska that may be of interest. One is dry edible beings and the national office has advised us that they are still making a determination regarding the eligibility that dry edible beans for C fat.
- [00:51:25.680]Cathy Anderson: The second that we thought about is sugar beets and with regard to sugar beets. They're not currently included on the list of specialty crops eligible for safe and
- [00:51:38.520]Cathy Anderson: Keep in mind though again that if you feel as a producer that that sugar beet should be included. Then there is an opportunity for you to provide information or data, whatever you can to USDA to support that.
- [00:51:53.550]Cathy Anderson: You feel that crop should be eligible. So again, visit that national Seif app website farmers.gov slash see fat and there's an opportunity there to provide that information.
- [00:52:07.830]Cathy Anderson: This slide just shows you that section on the ad 3114 where you would report the specialty crops.
- [00:52:16.380]Cathy Anderson: We want to talk a little bit about this payment Calculator Tool. If you go to the national Seif app website.
- [00:52:22.440]Cathy Anderson: There is a link to the payment Calculator Tool, and when you open it you will have the opportunity to download an Excel workbook, essentially. And this is what it looks like.
- [00:52:33.270]Cathy Anderson: We've heard a couple of reports or producers trying to do this, and perhaps they get some type of an error message. Currently, what we're told is that you have to have a version of
- [00:52:45.600]Cathy Anderson: Excel 10 or later in order for this to work. But we've also been advised that I believe there's going to be an additional software update to allow older versions of Excel.
- [00:52:58.080]Cathy Anderson: So just know that if you run into that issue that that could be part of the problem. This is what the Calculator Tool will look like take special note of a couple of things.
- [00:53:09.930]Cathy Anderson: There is a reminder here of production and inventory that must be subject to price risk and then you see all of those buttons over on the left where it talks about an estimated payment report the
- [00:53:25.020]Cathy Anderson: Is the application itself. So you can complete this information through this Excel workbook go over and print the at 3114 sign it.
- [00:53:35.370]Cathy Anderson: And and send it to your FSA office or scan it and email it to your FSA office or drop it off in the Dropbox. I do want you to note that there are two buttons. There's a print
- [00:53:47.880]Cathy Anderson: And also a print at 3114 continuation. If you have more than a certain number of lines, you need to be sure that you print that continuation so that all of all of the entries show
- [00:54:00.630]Cathy Anderson: So this is what that Calculator Tool will look like. And the next couple of slides just again, simply show you those sections you would complete for non specialty crops or livestock as applicable.
- [00:54:15.720]Cathy Anderson: And this shows you, for instance, here's what I complete up in the top section and then where the blue arrow is it's just simply showing you what's that payment calculation behind the scenes that the system is going to take from the information I load.
- [00:54:31.320]Cathy Anderson: So this is the section on non specialty crops and will
- [00:54:36.180]Cathy Anderson: And again, the payment calculations behind the scenes. And then also the livestock portion of that payment calculator and the calculations behind the scenes.
- [00:54:47.610]Cathy Anderson: So keep in mind when you complete this online. It doesn't automatically just go to FSA. You have to print it off and sign it and submit it to FSA. And so that they can process it.
- [00:55:02.610]Cathy Anderson: As we talked about our FSA county offices are currently open only by phone appointment.
- [00:55:09.510]Cathy Anderson: Due to the coven 19 pandemic. We have no in person traffic right now for both your safety and ours.
- [00:55:16.890]Cathy Anderson: But there's a lot of tools we use to be able to continue to do business with you and that can be
- [00:55:22.560]Cathy Anderson: Phone email mail fax and even Microsoft team meetings we have done several of those with producers as well. So, just contact your county office and find out what the best method is for you to do that.
- [00:55:38.040]Cathy Anderson: This shows you, again, this is so important that farmers.gov slash see fat website.
- [00:55:44.010]Cathy Anderson: CAN'T ENCOURAGE YOU enough to go to that website. If you haven't already had an appointment with your county office or haven't started the application process.
- [00:55:52.800]Cathy Anderson: I think going to those website. It's really going to help you understand better the information you need to have pulled together before you start and probably answer some questions that you might have.
- [00:56:03.990]Cathy Anderson: Now, you can certainly contact our local county FSA office staff, they're ready and willing to help you with questions, but there is also a national see fat call center and the number is listed there. So if perhaps you call the county office and maybe
- [00:56:21.000]Cathy Anderson: You know, they're having another call or appointment and can't take your call. At that moment, you could call this call center and they will probably be able to help you.
- [00:56:33.060]Cathy Anderson: Okay, with that.
- [00:56:39.390]Brad Lubben: Kathy, let me thank you first for the presentation made, we do have several questions coming in.
- [00:56:45.570]Brad Lubben: Both in our chat box or or Q AMP a
- [00:56:48.330]Brad Lubben: Box there. So we'll get to those, but I would like to intervene briefly to present some slides that I have on a little bit of the economic impact or the questions for producers here.
- [00:57:00.450]Brad Lubben: So we'll do that for about five minutes and then we'll come back to Q AMP. A here and wrap up. Not long after
- [00:57:06.750]Brad Lubben: The one o'clock hour so
- [00:57:09.660]Brad Lubben: Time for me to share briefly.
- [00:57:17.490]Brad Lubben: So as Kathy has presented the discussion and Pam shared details on the coronavirus food assistance program being implemented by FSA. I wanted to provide a little bit of perspective on what the dollars might mean and how that fits into a broader farm income safety net.
- [00:57:35.790]Brad Lubben: It's worth remembering that while the focus right now is on see fat.
- [00:57:39.600]Brad Lubben: That's the acronym way down at the bottom because it's also important to remember that there is a broad safety net already in place.
- [00:57:46.710]Brad Lubben: With commodity programs crop insurance programs and various categories of emergency assistance, including the disaster assistance programs that are permanently authorized
- [00:57:58.110]Brad Lubben: As well as the ad hoc disaster assistance, the whip plus program that is still going through sign up at present for losses back in the
- [00:58:06.540]Brad Lubben: 2018 and 2019 crop years and now the ad hoc economic assistance, whether it was the MSP payments of the trade systems package, the last two years, or now the C fat payments as well.
- [00:58:21.690]Brad Lubben: To think, and specifically focus on the C fat payments recognize that how they were described. They were targeted at commodities that really did face a loss.
- [00:58:31.260]Brad Lubben: And that includes the commodities that 75% price decline as defined and measured by FSA eager by USDA as Kathy reported
- [00:58:40.830]Brad Lubben: So commodities that haven't suffered that price decline. We're not required eligible unless further analysis or condition might might bring a few commodities on
- [00:58:50.580]Brad Lubben: Other commodities those same commodities were also targeted for losses due to ongoing market supply chain disruptions. That's where the the CCC payments came in as opposed to the the charismatic movement.
- [00:59:06.390]Brad Lubben: Another important point that was referenced is that this is for inventory, generally speaking for sales and inventory that were at price risk for the non specialty crops, the grains and oil seeds.
- [00:59:19.500]Brad Lubben: It was it was crap that was an inventory, as of January 15 and it was underpriced as of January 15
- [00:59:27.180]Brad Lubben: And that long list of specific contracts by example that FSA has shared and has posted on their website fundamentally leaves basis contracts.
- [00:59:37.980]Brad Lubben: As eligible, because they don't establish a futures price component and do a pricing contracts or derivatives of because they don't establish the price component of the sale.
- [00:59:50.580]Brad Lubben: All of the others effectively establish a fixed or at least a minimum cash or futures price position. And that's, they don't technically qualify as inventory subject to price risk and this inventory eligible for see fab assistance.
- [01:00:09.630]Brad Lubben: Cathy as you described earlier in this presentation that addresses the non specialty crops like grains and I will see that addresses the livestock sales between January 15 and April 15 that does not apply to the livestock inventory between mid April and mid May.
- [01:00:32.160]Brad Lubben: So some distinction here by by category and by by payment type
- [01:00:38.430]Brad Lubben: As also described there are substantial payments do under this program for producers that enroll and sign up but 80% that payment will be paid here up front. I see it an email.
- [01:00:51.990]Brad Lubben: press release from USD that said some payments have already been processed today.
- [01:00:56.400]Brad Lubben: So, sign up started last Monday and payments or two weeks ago now and payments are already going out the door. So it is a quick turnaround here but 20% of that calculated payment will be held back for now and pay later subject to available budget.
- [01:01:14.910]Brad Lubben: It is possible that there may be more additional assistance coming Congress continues to debate the issue that house has passed legislation, the Senate has not initiate any any action yet.
- [01:01:27.450]Brad Lubben: But certainly there is discussion about potential further assistance that further assistance if it comes could add to the pool of funds for additional payments here if in fact
- [01:01:39.600]Brad Lubben: These payments end up prorated because of a shortage, or it could add two additional funds to cover additional commodities, if they're added or it might focus on further and continue to losses and I'm speculating here in particular that that probably is not about
- [01:01:57.240]Brad Lubben: Commodities that at that point is about 2020 commodities, the assistance on on non specialty commodities to date is really about 2019 production that was yet to be sold. Earlier this year, the assistance if there's any going forward is likely to be on the 2020 crop in my perspective.
- [01:02:18.300]Brad Lubben: If we remember that see FAB is a major component of the safety net present but don't forget that commodity programs are as well when we saw our can PLC sign up that we did.
- [01:02:30.780]Brad Lubben: A tremendous amount of education on here, not that long ago, just a few months ago, the result of that sign up was a dramatic shift in sign up toward the PLC program.
- [01:02:42.660]Brad Lubben: With lower commodity prices with lower prices that meant a decline in the arc guarantee levels, there was a general shift toward PLC because of the
- [01:02:54.810]Brad Lubben: Because of the expected difference in support, there was still a sizable enrollment in our county for soybeans, but certainly a shift toward PLC pretty much across the board.
- [01:03:07.200]Brad Lubben: Now I've done some calculations of what PLC payments might look like, because we do have updated price components.
- [01:03:14.220]Brad Lubben: If you remember that there's an effective price effective reference price and then it is payable on the PLC program if the higher of the marketing on rate or in the market your average price is below that reference price. Right now, the
- [01:03:31.320]Brad Lubben: Crops have a price projection for example for Quarter 360
- [01:03:36.660]Brad Lubben: Or soybeans have a 50 for grain sorghum 325 for wheat or 460 at those prices that was we would see PLC payments on
- [01:03:45.420]Brad Lubben: Three of the four soybeans would still be out of the money in this case. Well, we wouldn't begin to see potential PLC payments on the 19 crop that would be payable and October.
- [01:03:57.300]Brad Lubben: Even more so we have very early projections of what the 2020 crop prices might be. And these are early because this was published in the
- [01:04:06.300]Brad Lubben: May supply and demand reports released by USDA, but this is for a marketing year on corn and grain sorghum soybeans that doesn't even start until September.
- [01:04:16.260]Brad Lubben: So it's a very early estimate of what eventually will be a season average price for those commodities, but across the board, lower price levels.
- [01:04:26.460]Brad Lubben: substantially higher PLC payment rates and substantial potential PLC payments due on the 2020 crop that would be payable in October of 2021
- [01:04:38.970]Brad Lubben: So there is a safety net in place and there's, it's important to remember that with it there. There is some downside price protection already effectively in place.
- [01:04:48.390]Brad Lubben: Payable later but certainly protection available even with crop insurance. It's a recognition, there is some price protection already
- [01:04:57.180]Brad Lubben: At the money or or near the money we look at the RP policy which provides a revenue protection, based on the higher the base price or the harvest price.
- [01:05:09.390]Brad Lubben: Times the pH times the protection level of the producers choosing the base prices for corn grain sorghum soybeans were set back in February.
- [01:05:19.200]Brad Lubben: The base price for wheat was set back in last September, but compare the most recent new crop harvest futures price for those commodities against that base.
- [01:05:31.770]Brad Lubben: Most reason as in June 1 for my calculations here and for corn and grain sorghum soybeans. We're talking about price levels that are between
- [01:05:40.860]Brad Lubben: 86 and 93% of that base price. They've effectively already given up price relative to the base, which means they're already eating into whatever deductible, the producer signed up for.
- [01:05:56.160]Brad Lubben: They're still deductible there to be lost, so to speak, but depending on what level protection you buy if you if you bought 80 or 85% protection.
- [01:06:06.360]Brad Lubben: Effectively, we've already lost some of that deductible do price loss. Some of any further price sauce might quickly be covered by crop insurance.
- [01:06:16.770]Brad Lubben: Remember, this is a revenue policy map just a price policy but inherently there is some downside price protection here as well.
- [01:06:24.840]Brad Lubben: You will know wheat and the same reason that we was not included in the sea, fam eligible commodities. For now, but
- [01:06:31.740]Brad Lubben: hard red winter wheat is it in fact the current prices, a little bit higher than where it was back in the base and importantly it's higher than WHERE WAS ON JANUARY 15 relative to see fat.
- [01:06:46.050]Brad Lubben: Now, if I put all those numbers together. This is a slide that really sort of demonstrates the relevance and the size of the safety net in 2019
- [01:06:57.120]Brad Lubben: There is not much to be had on crop payments that were payable on the 2018 crop. But the most of the safety net in 2019 King from
- [01:07:07.500]Brad Lubben: What's shown us supplemental or disaster assistance payments which which would have been both some emergency disaster systems as well as predominantly
- [01:07:17.190]Brad Lubben: The NFC payments, the trading systems payments in 2020 that ratchets up even more. It's not explicitly trade assistance payments, although some of those were still paid in January.
- [01:07:29.460]Brad Lubben: It is an estimate of a billion dollars or more in CFL payments that would be payable this calendar year when you add those emergency payments.
- [01:07:42.420]Brad Lubben: To existing crop payments that are estimated in the $200 million range. You're talking about potential safety net payments of 1.32 $1.4 billion.
- [01:07:55.470]Brad Lubben: The green bar is concentration payments which don't fit the definition of safety net, but still count in this broader equation here.
- [01:08:02.940]Brad Lubben: We're talking about substantial safety net payments payable on the 2019 crop payable in the 2020 production year as well as early 2020 production now absent any additional announcement of assistance or any further development of potential
- [01:08:22.530]Brad Lubben: multiple rounds of payments of producers 2020 could be a very big year and then 2021 we would hope to see some price recovery.
- [01:08:31.050]Brad Lubben: Maybe some some farm income recovery, but we will also expect to see us falling back off of those HIGHS IN TERMS OF GOVERNMENT payments.
- [01:08:40.560]Brad Lubben: So this is a critical component today and a critical component of the outlook, but it is still at this point, a short run response to the ongoing economic challenges.
- [01:08:55.320]Brad Lubben: So I offer that up there, just as a guidance to say see FAB is a critical component of the current situation and the current outlook, but remember that it's part of that safety net. And there are other parts of safety net to pay attention to as well.
- [01:09:10.800]Brad Lubben: As always, visit the websites either are farmed out you and now that edu website or FSH website fsa.usda.gov slash any for Nebraska.
- [01:09:22.890]Brad Lubben: I want to stop that.
- [01:09:25.170]Brad Lubben: And return to
- [01:09:27.390]Brad Lubben: Kathy and I are sharing the screen here. So you get to some questions. We have questions coming in. As I said, via chat and via
- [01:09:35.250]Brad Lubben: Via the Q AMP a box.
- [01:09:38.100]Brad Lubben: Couple straightforward questions to start relative to and Kathy. I'm going to moderate these hand them off to you for an answer.
- [01:09:46.140]Brad Lubben: But relative to cattle inventory or really all I can target indoor but this specifically about relative to cattle inventory every class of cattle looks like it gets the same payment of $33 for him. Is there a explanation or a or a discussion about that number.
- [01:10:06.690]Cathy Anderson: That's a very well event and good question. Um, I can honestly tell you that I don't have the background information for how those payment rates were determine
- [01:10:18.090]Cathy Anderson: Again, that part to payment from my understanding is trying to target ongoing market disruptions and increase costs. I will say that
- [01:10:28.650]Cathy Anderson: I have looked, there are, there are a number of questions and answers on that national website.
- [01:10:33.690]Cathy Anderson: That address several types of things. I know one of the things also address there is why April 15 why January to April. Why, why not later. And there's some good explanation there offered
- [01:10:45.930]Cathy Anderson: By Our Leadership at the national level with how those decisions were made, so I can't speak to whether there's a particular question or answer on the $33 payment rate there could be, but I don't I don't have that information with me today.
- [01:11:02.340]Cathy Anderson: Okay.
- [01:11:03.120]Brad Lubben: But that is what they live with for now at least, is that
- [01:11:05.670]Cathy Anderson: Yes, yes.
- [01:11:08.490]Brad Lubben: Another lifestyle question while on the topic, and you did include a a slide specifically about dairy cattle. But explain again when dairy cattle are eligible and when they're not eligible for payment.
- [01:11:23.190]Cathy Anderson: Well, the way I am understanding and it's essentially when a producers made the decision that they're now going to no longer going to use that animal for dairy production.
- [01:11:31.380]Cathy Anderson: So they're they're basically removing them from the dairy herd for milk production.
- [01:11:36.330]Cathy Anderson: They've now become an animal that they're maintaining essentially for their beef, the beef cattle market. So anything that they have cold from the dairy production animals could enter that could enter that eligible livestock either under sales or inventory
- [01:11:52.650]Brad Lubben: So I would interpret a cold callous eligible
- [01:11:55.530]Brad Lubben: Yeah, a dry Cal. He was just sitting waiting the green or the milking part of her is not
- [01:12:03.840]Cathy Anderson: I would agree that if the intention is still that that animal is going to be used for dairy that it's really not an eligible eligible cow under the sea fat livestock eligibility program.
- [01:12:17.580]Brad Lubben: And the same way a steer bull calf is eligible, because it's heading to the beef market.
- [01:12:23.820]Brad Lubben: Right calf that's intended for
- [01:12:25.710]Brad Lubben: Replacement heard
- [01:12:27.480]Brad Lubben: Right really is not
- [01:12:29.160]Cathy Anderson: Or a bolt that perhaps is being used to breed the dairy cows.
- [01:12:33.720]Brad Lubben: Yes. Yeah, a replacement for a replacement bowl.
- [01:12:36.330]Brad Lubben: Yes, yes, yes. Right, okay.
- [01:12:39.810]Brad Lubben: One more lifestyle question on the topic.
- [01:12:43.980]Brad Lubben: The cattlemen Tori example you described. I think he had was important to add cow calf pairs. But then I think you distinguished in the next slide that counts as 480 calves and 480 cows when we're carrying inventory. Right.
- [01:13:00.000]Cathy Anderson: Right. And so we've got these we've got these different categories of livestock. So we break it down to those calves going probably in the feeder calves less than 600 pounds, for instance. And then we've got the cows that were in the trying to remember what they were in the another cat.
- [01:13:18.120]Cat.
- [01:13:19.380]Brad Lubben: At all other cattle, I believe it was yes. Thank you.
- [01:13:22.470]Cathy Anderson: And so we would take the, the payers and break them out, relative to essentially where they fit on that application, right.
- [01:13:31.410]Brad Lubben: Okay, great. Some, some green questions for you. One that actually came in. We appreciate it. Someone that submitted a question as soon as they register. They were, they were ready and on the ball here.
- [01:13:42.390]Brad Lubben: From a landlords perspective they receive bushels from their tenant. I don't know if this is specifically a crop share or might be a bushel rent, but then receive bushels. And then they are responsible for marketing. Does that make them eligible
- [01:13:57.690]Cathy Anderson: Right, so I'll dress that kind of from both perspectives and I'll just say if you, for instance, are contacting your county office. It's really important to
- [01:14:06.750]Cathy Anderson: Distinguish between these two situations. So if you're a landowner, that is getting a percent share maybe you're getting 30% of the production
- [01:14:15.300]Cathy Anderson: In return for the contribution of land that you give to that tenant, you would be considered to have a risk and production.
- [01:14:22.350]Cathy Anderson: And so you would be an eligible producer and if you still have green and inventory, as of January 15 it's not priced then that could be eligible grain. If you're a landowner, however, that your agreement with your tenant is that you get a flat 50 bushels per acre.
- [01:14:40.830]Cathy Anderson: And you're going to get that 50 bushels per acre, no matter what. So if the crop fails and and maybe doesn't produce that amount.
- [01:14:48.450]Cathy Anderson: The tenant still liable to go and purchase that and provide you that much green
- [01:14:53.130]Cathy Anderson: Then you would not be considered an eligible producer. Because essentially, you didn't have a risk and production, you are guaranteed that amount, no matter what. So again, it really depends upon your arrangement and whether we're talking about a percent share or a flat amount. Okay.
- [01:15:09.570]Brad Lubben: So yeah, very important distinction on his official rent a flat bushel that we sort of legally consider equivalent of a cash rent or is bushel rant a sheer a percentage that that would be comparable to a share right
- [01:15:26.160]Brad Lubben: All right.
- [01:15:27.750]Brad Lubben: And other green question from a producer that has little on farm storage. So they typically sell at harvest across the skills at the elevator and then they buy back futures to participate in the market.
- [01:15:43.050]Brad Lubben: They have price risk. Are they eligible
- [01:15:46.500]Cathy Anderson: If that green was actually sold prior to January 15 I recognize the price risk that might be in place due to the futures position.
- [01:15:55.980]Cathy Anderson: But you're no longer to consider to have ownership of that green as of January 15 so you couldn't include that in your in your item 16
- [01:16:04.860]Cathy Anderson: Production that you still owned as of January 15 it would only be part of that total 2019 production figure that we use to determine a cap on the eligible quantity
- [01:16:17.010]Brad Lubben: So and Kathy it relative to some other similar issues that also sounds like the, the implication that would arise if I had green that was that was sold under a contract.
- [01:16:30.930]Brad Lubben: And then I bought a call or something to reopen my exposure.
- [01:16:35.400]Cathy Anderson: I would agree to
- [01:16:36.570]Brad Lubben: Record the price and that likely means it's an eligible right
- [01:16:40.260]Cathy Anderson: Right. And certainly we understand, you know, the position of the marketer trying to capture that any kind of upward trend in the market and take that protection, but for purposes of see fat that grains considered to have been sold on that cash sale.
- [01:16:56.490]Okay.
- [01:16:58.890]Brad Lubben: Another question. What about corn has been fed after January 15 so I believe you address how to how to document that but
- [01:17:08.250]Cathy Anderson: Right, right. So corn that maybe was fed or even corn taken for silence that was fed, you would still be to consider to have on that as of January 15
- [01:17:19.200]Cathy Anderson: And so that could be included in that item number 16 as long as it was no longer or excuse me, as long as it was continued to be subject to a price risk.
- [01:17:29.040]Cathy Anderson: You hadn't contracted it if you'd contracted somehow. And it's different. But if you're just feeding it to your livestock. You had it as of January 15 and then you fed it to your livestock over the next two months.
- [01:17:41.640]Cathy Anderson: That would be considered to be eligible eligible quantity for the fat. Okay.
- [01:17:47.160]Brad Lubben: A similar question about feeding. But if. What about the producer that actually purchased corn.
- [01:17:53.070]Cathy Anderson: Right and purchase horn. Right.
- [01:17:57.300]Brad Lubben: We're just going in order to feed.
- [01:18:00.810]Brad Lubben: So,
- [01:18:01.650]Brad Lubben: We're in January 15
- [01:18:02.760]Brad Lubben: But it was purchased not produced
- [01:18:05.040]Cathy Anderson: Exactly. So corn that you did not actually produced is not eligible production.
- [01:18:11.160]Cathy Anderson: So you would need to ensure that anything that you had an inventory didn't include corn that you went out and purchased it, it has to first we have to first look at that corn that you had a production risk in and you weren't not only an owner of that, but had a production risk as well.
- [01:18:31.800]Brad Lubben: Another question from a, from a good friend of ours that lives in Texas now still has cattle in Nebraska, where do you apply
- [01:18:41.220]Cathy Anderson: Right. So if you are a, you know, I'm going to assume, maybe, maybe you are a new producer to FSA. You may not have this recording county that I referenced established it but that's okay.
- [01:18:53.400]Cathy Anderson: You could you couldn't really essentially apply it. Any FSA office. So you could go to your local FSA office in Texas, you could call them work with them, get an application to them and then
- [01:19:05.940]Cathy Anderson: My, my guess is that they're going to probably forward that on to the county in Nebraska, where your cattle are located and that would be the county that where we're going to process your application.
- [01:19:21.000]Brad Lubben: All right, I believe we have worked through our set of questions for the moment. I know we've kept participants on here after the one o'clock hour but we appreciate your
- [01:19:31.710]Brad Lubben: Your diligence to stay with us.
- [01:19:34.470]Brad Lubben: We do. Thank you for your time. I will watch here just a moment to see if we have any additional questions coming
- [01:19:42.090]Brad Lubben: But, but I also do want to send our gratitude and say thank you, Cathy, and thanks for your role and and FF sales role in helping to
- [01:19:51.720]Brad Lubben: Not only deliver the program at to deliver the information that you provided here today thanks to everyone who has participated and
- [01:20:00.600]Brad Lubben: We appreciate your involvement and continued interest in our webinar series are recording today's webinar will be posted
- [01:20:08.160]Brad Lubben: On the farm die you know.edu website where you can find recordings of all our previous webinars as well as the schedule of all of our upcoming webinars.
- [01:20:17.430]Brad Lubben: As a reminder, as I said, check that for for check that website for any of our additional information and resources.
- [01:20:25.350]Brad Lubben: The series does continue next week, again, at noon, where we'll have a session featuring green marketing titled farm survive on marketing strategies.
- [01:20:35.370]Brad Lubben: To give you an update and a perspective on on marketing at that time.
- [01:20:39.240]Brad Lubben: As you leave today. Again, we thank you for your time. But you'll as you leave, you're going to receive in a short 30 seconds or so survey.
- [01:20:46.380]Brad Lubben: In your email, and we would certainly appreciate your feedback and gives us feedback on today's webinar and your input to help us plan future sessions as well.
- [01:20:55.560]Brad Lubben: I believe we have
- [01:20:57.720]Brad Lubben: Fulfilled all the questions, Kathy from my continued watching the list here. So we thank you again for your time and participation and we appreciate it. We wish you and everyone else a good day.
- [01:21:09.450]Cathy Anderson: Thank you very much.
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