Government Aid Program Finalized

March 29, 2021

Last week, Secretary of Agriculture Tom Vilsack announced the Pandemic Assistance for Producers (PAP) package of government aid totaling over $12 billion. PAP is funded by the $900 billion stimulus package passed in December 2020. Plans to allocate the aid, which were under review by the Biden administration, were finalized last week.

“Our new USDA Pandemic Assistance for Producers initiative will help get financial assistance to a broader set of producers, including to socially disadvantaged communities, small and medium-sized producers, and farmers and producers of less traditional crops,” Vilsack said last week.

USDA outlined four parts to PAP. The first is $6 billion earmarked to create new programs and expand current initiatives to help groups specified by USDA, including assistance to dairy producers through the Dairy Donation Program, reimbursement of costs to euthanize livestock and poultry last spring, and support to the biofuel industry.

Part two contains $500 million of new funding to existing programs. The third part allocates $6 billion to expand Coronavirus Food Assistance Program (CFAP) payments, with $4.5 billion going to commodity and specialty farmers and $1.1 billion to cattle producers. Finally, the fourth part reopens CFAP Round 2 on April 5 and provides $2.5 million for outreach to socially disadvantaged farmers.

Based on USDA’s CFAP calculator, a dairy with 100 cows and a 25,000-lb. rolling herd average that farms 100 acres of soybeans and 100 acres of corn would have received over $70,000 in CFAP aid to date, while much larger farms likely ran into CFAP’s payment caps. Individuals were eligible for up to $250,000 in each round of CFAP, with increased payments for legal entities with multiple owners.

These programs provided much-needed capital to dairy producers in 2020. Dairies in states with predominantly Class III milk pools fared well and were able to pay down debt. However, dairies in regions with mainly Class IV use or high levels of depooling suffered greatly, and the payments helped these farms minimize losses.