Many corn and soybean growers were disappointed with the COVID-19 CFAP Payments. Well, maybe not disappointed, but rather surprised because they were not as large as many expected. That is likely because they did not understand the complicated formula the USDA used to calculate the payments. There is no question that farmers saw extreem losses because of COVID-19. The payments were justified but there were limited dollars in the COVID-19 bill passed by Congress and in the USDA's CCC budget.

I was talking with Ag analyst Kent Thiesse about the payments and he said he has had many calls from farmers asking why the payments were not as large as expected. Kent said many farmers did not understand that the payment on "eligible bushels were factored lower 3 times in the formula. First, remember only 50 or your production is eligible or what you had in storage unpriced whichever is less. Then 50 percent of that is used for the payment. Finally you get 80 percent of that total. Depending on the budget or fund available you may get the final 20 percent at a later date.

The reality is your corn and beans produced last year are factored lower 3 times! Click on the link and listen to Kent explain the process the USDA is using to determine what your COVID-19 CFAP payment was, or will be.



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