President Donald Trump and USDA released the long-awaited rules for direct payments under the Coronavirus Food Aid Program (CFAP) at the White House Tuesday, saying enrollment will start next week with initial payments to follow the week after.
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Dairy cows at an afternoon milking session. (Gili Yaari/Flash90)

CFAP and Commodity Credit Corporation payments combined will total $6.20 per cwt for eligible producers.

USDA will only pay out 80% of the maximum direct payment initially, reserving the remaining 20% in case funding for the program runs out.

According to USDA, payments using funding from the CARES Act will be determined by multiplying a producer’s milk production for the first quarter of calendar year 2020 by $4.71 per cwt. Payments under the CCC Charter Act will be determined by multiplying a producer’s milk production for the first quarter of calendar year 2020 by a factor of 1.014 —in order to account for increased production in the second quarter of calendar year 2020—by $1.47.

Payments under the CARES Act and CCC Charter Act will be issued as one payment to the producer if they are eligible to receive both parts. The funds will be disbursed in a combination of initial and final payments as previously described.

The rule announced Tuesday eliminates the $125,000 per commodity limit but keeps the $250,000 per recipient limit on payments. Corporations with more than one eligible producer stakeholder are eligible to receive up to $750,000 in payments, $250,000 per individual. For example, if an incorporated farm has two eligible stakeholders, they could receive up to $500,000 in payments. But if they have four eligible stakeholders, they would only receive $750,000.

“We welcome this federal dairy assistance, which is critically needed as the nation’s dairy farmers face an unprecedented market collapse,” said Jim Mulhern, president and CEO of NMPF, the largest U.S. dairy-farmer organization in a statement. “USDA’s plan will provide relief to many farmers, and we appreciate the department’s adjustments to payment limits, an issue which we raised prior to the department finalizing this package.

Still, Mulhern says more flexibility in payment limits and payment calculations in future rounds will be necessary to meet the challenges facing producers of all sizes.

“We look forward to working with federal officials and lawmakers on additional assistance,” he said.

Program sign-ups will begin May 26. USDA plans to begin issuing payments the first week of June.

Aurora Dairies, one of the largest milk producers in the country, has added Gray Wigg Gault’s Clydebank Aggregation in Victoria’s Gippsland region to its expanding portfolio for around $20 million.

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