USDA Assistance Helps Producers Recover From COVID-19 Impact

Posted by Creigh Rourke on

Now is the Time to Investigate a Cost-Effective Manure Injection System.

With the earthquake-like impact of COVID-19 on the United States agricultural sector, Congress responded with a plan to help farmers, ranchers, and agricultural businesses get back on their feet. Two weeks after the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law, the USDA announced the details surrounding direct agricultural assistance granted to the USDA through the act. $16 billion was made available to help producers recuperate their economic losses in specialty crops, livestock, and other commodities as a result of COVID-19. The Coronavirus Food Assistance Program (CFAP), established by the U.S. Secretary of Agriculture, is giving financial assistance to agricultural producers whose commodities have suffered a five percent or greater price decline.


Farmers and ranchers who are eligible for assistance will receive one payment, which is pooled from two possible funding sources. The first source of funding is the CARES Act, which consists of $9.5 billion to compensate producers for their losses as a result of price decline from mid-January to mid-April. $6.5 billion in funding for the second quarter will come from the Commodity Credit Corporation (CCC) Charter Act to compensate for losses due to market disruptions.

CFAP_chart-2

Among those eligible for direct payments are dairy producers. $2.9 billion of CFAP funding is going toward aiding dairy producers. With the stimulus, dairy farmers will receive $4.71 per hundredweight of milk, 80% of the calculated first quarter price decline, for the first quarter of the year. Producers will also receive $1.47 per hundredweight of milk, 25% of the calculated first quarter price decline, for anything after the first quarter. Milk that had to be dumped is also considered in the assistance amount calculation. To account for production level changes during the second quarter, the production level of the first quarter multiplied by 1.014 will be used to calculate the payment for the second quarter.

Any cattle sold from Jan. 15, 2020, to April 15, 2020, are eligible for additional compensation through CARES Act funding. CCC funding is also available for the highest inventory level from April 16, 2020 to May 14, 2020. For the first quarter, producers will receive $102 for feeder cattle less than 600 pounds, $139 for feeder cattle 600 pounds or more, $214 for fed slaughter cattle, $92 for mature slaughter cattle, and $102 for all other cattle. The CCC funding rate is $33 per head. Producers can also receive compensation for non-specialty crops such as corn and soybeans.

Initial payments will be 80% of a producer's CFAP payment to ensure payments will be distributed quickly and do not go past the predetermined $16 billion limit. The remaining 20% will be distributed after the initial payments if funds remain available.

Originally, producers who were eligible for the direct payments could receive up to $125,000 for a single commodity with a total limit of $250,000. The per commodity limit has since been waved, and now producers can receive up to $250,000 in total. Corporate entities may be eligible for $250,000 per owner with a maximum of $750,000 if the corporation has three owners who contribute at least 400 hours per year of labor and/or operation management.

 

DAIRY CALCULATION FORMULA (MILK PRODUCTION ONLY):

The USDA has created an application generator and payment calculator to help producers understand how much direct payment they qualify for. If a producer is interested in applying for financial assistance, they should apply through their local Farm Service Agency Service Center. The application can now be done online also. Applying is free and applications will be accepted until Aug. 28, 2020.

((Q1 production in cwt x $4.71) + (Q1 production in cwt x 1.014 x $1.47)) x 0.8 = Initial Payment

         Example

         >A dairy with 800 cows and 5,000,000 pounds of production in Q1:

         ((50,000 cwt x $4.71) + (50,000 cwt x 1.014 x $1.47)) x 0.8 = $248,023

       

FINDING A COST-EFFECTIVE MANURE INJECTION SYSTEM:

Much like the USDA, Bazooka Farmstar has created a calculator that helps producers and custom applicators alike, determine the return on investment of a manure injection system, and how long it will take to see a return on that investment. With added assistance and milk prices improving, now may be the right time to investigate a manure injection system that fits within operational means.  

 

CALCULATE MY ROI

 

The two systems below are set-up to meet the needs of dairies with 750 to 1,000 cows who have crop ground near their lagoon. With both examples, liquid manure can be transferred one mile away from the source. One mile of hose is capable of pumping out 84,000 gallons of liquid manure per hour. Need to cover more ground? The dragline systems outlined below can meet the needs of many dairies, as well as, be modified to fit different operation's budgets and goals.

      SYSTEM EXAMPLE 1:

        >Standard Pull-Type Toolbar | 28' wide with 18" spacing

        >8 sections of supply hose

        >2 sections of drag hose

        >8, 6" couplers

        >8, 5" couplers

        >1000 Hose Reel

        >4517 MP Booster Pump

        >6" & 8" start-up package

 

        SYSTEM EXAMPLE 2:

        >Standard Pull-Type Toolbar | 28' wide with 18" spacing

        >8, 6" sections of supply hose

        >2, 5.5" sections of Elite Drag Hose

        >5.5" coupler set

        >6" coupler set

        >1000 Hose Reel

        >250 Gallon Full Throttle Trailer

IMG_0400

 

WHY CHOOSE A DRAGLINE MANURE INJECTION SYSTEM?

That's the million dollar question, right? It's no secret, whether you're completely new to the manure injection world or if you're looking to make the switch from a tank operation to dragline, the upfront costs associated can be scary. The simplicity of the systems we've crafted above work well for those who are just getting started with dragline. Among several additional factors, at the end of the day if you know how many gallons of manure you have available to pump and where you will be relocating the manure available, you can use our ROI calculator to tailor the numbers to your specific operation and become more confident in your decision to purchase (or not).  

If you haven't already heard, there are countless benefits that go hand-in-hand with injecting liquid manure. Like helping reduce odor, nutrient loss, and phosphorus runoff, improving both crop yields and soil health, while (possibly most importantly) reducing environmental concerns. Manure injection with a Dragline set-up specifically, reduces soil compaction that occurs in fields versus when heavy tankers are used for application. In addition, a dragline system takes less time to inject the same amount of manure than tank application and fewer workers are needed to lay down hose than to haul the equivalent amount of manure using trucks. Not to mention, you won't have to wait on out-of-service trucks.

In summary, owning a manure injection system within your current means will help your bottom line. There is no better time than now.

 

CALCULATE MY ROI

 

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