CFAP 2 and The Stop Gap Funding Measure
Update for September 23rd, 2020
Last Thursday evening during a campaign rally in Wisconsin President Trump announced that his administration will be providing an additional $13 billion in aid to producers. “I’m proud to announce that I’m doing even more to support Wisconsin Farmers. Starting next week my administration is committing an additional-you’ve been asking for this for a long time- $13 billion in relief to help farmers recover from the China virus, including Wisconsin’s incredible dairy, cranberry and ginseng farmers who got hurt badly. Been after that money for a long time.” The USDA released additional details Friday including the signup period which began on September 21st at local FSA offices or online and will run through December 11th.
From what I understand these funds were allocated last spring as part of the original coronavirus CARES act and the balance will come from the CCC. CFAP 2 will cover a broader set of agriculture products than the first round of aid, CFAP 1. The USDA stated, “This program provides financial assistance that gives producers the ability to absorb increased marketing costs associated with the COVID-19 pandemic. Producers will be compensated for ongoing market disruptions and assisted with the associated marketing costs.” Ag Secretary Sonny Perdue explained that farmers are still dealing with challenges related to the pandemic and gave credit to President Trump for the additional financial aid for U.S. farmers. Perdue stated, “President Trump is once again demonstrating his commitment to ensure America’s farmers and ranchers remain in business to produce the food, fuel and fiber America needs to thrive. We listened to the feedback received from farmers, ranchers and agricultural organizations about the impact of the pandemic on our nations’ farms and ranches and we developed a grogram to better meet the needs of those impacted.” The USDA added, “This program provides financial assistance that gives producers the ability to absorb increased marketing costs associated with the COVID 19 pandemic. Producers will be compensated for ongoing market disruptions and assisted with the associated marketing costs.”
The payment structure specifically for corn and soybeans in the CFAP 2 was explained as:
Eligible acres multiplied by $15/acre OR
Eligible acres multiplied by a nationwide crop marketing percentage (Corn 40% and Soybeans 54%), which is multiplied by a crop-specific payment rate (Corn and Soybeans @ $0.58) that amount is then multiplied by the producer’s weighted 2020 APH approved yield.
If no APH is available then 85% of the 2019 ARC-CO benchmark yield will be used.
CORN APH 210 BUSHELS/ACRE X 40% = 84
84 X $0.58 = $48.72 TOTAL PER ACRE
SOYBEANS APH 60 BUSHELS/ACRE X 54% = 32.40
32.4 X $0.58 = $18.79 TOTAL PER ACRE
News this morning says a “deal” was reached between Speaker of the House Pelosi and Treasury Secretary Steven Mnuchin regarding a stop gap funding measure that is expected to receive bi-partisan support. The previous measure that had been crafted by House Democrats last week would have faced stiff opposition in the Senate, especially from farm state members. Representative Mike Conaway (R-TX) a ranking member on the House Ag Committee told reporters that last Friday there was bipartisan agreement to fund all of the U.S. government, including the USDA, “so they could help rural America and our farmers, ranchers and dairy producers through some very, very difficult times. But, that deal was rescinded by Democratic leaders in Congress. Under yesterday’s House Democratic plan, rural America, farmers, ranchers and dairy producers were excluded from help under Covid-19 relief and even from basic farm bill support. As the Ranking Member of the House Agriculture Committee, I strongly opposed this deliberate, unconscionable snubbing of rural America. Thanks to President Trump and Republican Leaders in Congress who also strongly opposed this reckless stunt, the Democrats finally modified their funding bill to include the Department of Agriculture. Had Congressional Republican leadership not stepped in, USDA would have been forced to shut down critical Farm Bill programs supported by wide, bipartisan margins in both the House and Senate. This would have hurt millions and helped nobody. I’m pleased that cooler heads prevailed.”
This measure, if passed and signed by President Trump, will keep the government funded through December 11th. This newly altered agreement now includes $21 billion in funding for the Commodity Credit Corporation (CCC) and close to $8 billion for nutrition spending. The House of Representatives passed the bill last night by a vote of 359-57, the Senate is expected to vote on the bill yet this week.
The Wall Street Journal has reported that global trade has recovered much faster than it did following the 2008 financial crisis which has surprised economists that had warned of rising protectionism, and significant supply chain disruptions. Early pandemic predictions were that globalization would face permanent losses and at the start of the world-wide pandemic international trade in goods did take an enormous year-over-year hit, the biggest since the Great Depression. While trade has not fully recovered to pre-pandemic levels the speed has been remarkable, recovering nearly half of this year’s historic losses by June.
NASA satellite imagery of the U.S. is shown in the photo below. This image, which was taken during the peak of the growing season measures the photosynthetic activity of plant life. Within plant cell organs a small amount of light is emitted as a florescent glow and while this glow is invisible to the naked eye it can be detected by sophisticated satellite imagery. Researchers from the Goddard Space Flight Center have studied and measured the level of florescent glow emitted from regions all around the world. So it’s really not surprising to learn that the tropics top the charts most of the year. “But then there was the raging plant party known as Iowa in July” and “In the height of the growing season, the Corn Belt lit up NASA’s map at levels 40 times greater than those observed in the Amazon rain forest.”
As harvest begins across the U.S. our counterparts in South America are preparing to plant. Dr. Cordonnier of Soybean & Corn Advisor reports, “Farmers in many areas of Brazil are now allowed to start planting their 2020-21 soybeans, but the weather has not yet cooperated. Most areas are still too dry to plant and only the few farmers with irrigation have started to plant. The weather forecasts are calling for increased chances of rainfall this week and especially next week, but it remains to be seen if the rains will be heavy enough to encourage farmers to start planting.” He added, “I would not get too concerned about delayed soybean planting unless the dry conditions persist until early or mid-October. Even then, soybeans planted mid-October could still have normal yields if the weather cooperated for the rest of the growing season.” Shown in the maps below are the current forecast through Thursday and also the 2 week rainfall relative to normal outlooks for both Argentina and Brazil.
Argentina is forecast to remain dry through Thursday.
The two week outlook below indicates Argentina should receive rainfall during the two week period that will produce seasonal to above normal precipitation.
The forecast through Thursday shows some much needed rainfall across northern growing regions. This precipitation will be the first in weeks for this area.
As you can see in the two week relative to normal precipitation map below, Brazil is expected to remain below normal through at least the first week of October.
NOAA is expected to announce to the public today a new advancement in their Global Ensemble Forecast System. The latest enhancement will improve The National Weather Service’s forecasting capabilities for hurricanes, blizzards as well as other weather events.
Below is the forecast map of total rainfall for the next five days (through Monday). This newest map shows the possibility for moderate rainfall across a large portion of Minnesota, very light showers across eastern Iowa, Illinois, Indiana and Ohio through the weekend while areas to the west remaining dry.
The 6 to 10 day outlook that brings us to October 3rd shows a rather drastic shift in temps across the Midwest. Rainfall is expected to be light in the Northeastern U.S. and remain dry in the remainder of the country.
Below is the map of expected U.S. precipitation relative to normal for the next 15 days. Harvest should progress quickly in areas where the crop is mature.