CFAP Information for Cattle Producers
CFAP and PPP Info for Cattle Producers
While the recently passed omnibus and COVID relief bills include a lot of ag provisions, these details are most relevant to individual cattle producers impacted during the height of the pandemic. We will update this post as details evolve and additional information becomes available.
The mathematical formula for determining the cattle payment is as follows:
- Slaughter/Fed cattle, Feeder cattle +600, Feeder cattle -600: Cattle inventory for the period of April 16-May 14 X 50% (CARES ACT SALES RATE-CFAP1 CCC inventory rate-CFAP2 inventory rate)
Slaughter/Fed cattle example: Inventory x 50% x (214-33-55)= $63/head
- Slaughter/Mature cattle and All Other Cattle: Cattle inventory for the period of April 16-May 14 X 25% (CARES ACT SALES RATE-CFAP1 CCC inventory rate-CFAP2 inventory rate)
All other cattle (breeding stock) example: inventory x 25% x (102-33)=$17.25
To ensure assistance more closely aligns with actual losses, USDA is required to make supplemental CFAP 1 and CFAP 2 payments, subject to available funds, not to exceed 80% of losses, notwithstanding payment limits, and broadening agriculture income for AGI purposes to include agricultural sales, including gains, agricultural services, sale of agricultural real estate and prior year net operating loss carry forward.
PPP TAX DEDUCTIBILITY
The bill specifies that forgiven Paycheck Protection Program (PPP) loans will not be included in taxable income. Additionally it clarifies that deductions are allowed for expenses paid with proceeds of a forgiven PPP loan, effective as of the date of enactment of the CARES Act and applicable to subsequent PPP loans. The bill also includes $284 billion in a second round of PPP loans and simplifies the forgiveness process for loans under $150,000.
More information about applying for PPP loans and details: SBA.gov/PPP or Treasury.gov/CARES
Statutory Dealer Trust
The bill establishes a Federal livestock dealer trust, similar to the Packer Trust. Note, this provision is identical to the Securing All Livestock Equitably (SALE) Act of 2020.
Posted: January 14, 2021
February 18, 2020