Here are the key takeaways from the announcement:
- For the non-specialty crops such as corn, wheat, soybeans, etc. there will be a "county average" price paid based upon the number of acres that a producer planted for the 2019 crop. The crop must be planted by August 1, 2019 to qualify for any payment on those acres.
- The 2019 payment cannot be higher than the 2018 planted acres (other than changes in acreage).
- Here is a listing of the non-specialty crops: alfalfa hay, barley, canola, corn, crambe, dried beans, dry peas, extra-long staple cotton, flaxseed, lentils, long grain and medium grain rice, millet, mustard seed, oats, peanuts, rapeseed, rye, safflower, sesame seed, small and large chickpeas, sorghum, soybeans, sunflower seed, temperate japonica rice, triticale, upland cotton, and wheat.
- The first payment will be made in mid-to-late August. Sign-up starts on Monday July 29 and ends December 6, 2019.
- The first payment for non-specialty crops will be equal to the greater of:
- $15, or
- 50% of the country rate
- The remaining payments (if any will) be made later in 2019 or 2020. However, if your county rate is $15, then the first payment is likely the only payment you will receive since the greater of $15 or 50% of $15 is $15. For all other counties, it is likely that the second and third payment will be much lower than the first. For example, the county payment rate for my home county of Walla Walla, Washington county rate is $28. A farmer in that county will get $15 in August and the remaining $13 will be spread among the second or third tranches.
- Other commodities will qualify for a payment (assumption that this is the August payment) as follows:
- Milk - 20 cents per hundredweight based on production history,
- Hogs - $11 per head based upon a date selected by the producer for hogs on hand between April 1 and May 15, 2019 (producer should select the date with the highest number),
- Nuts - $146 per acre,
- Cranberries - 3 cents per pound based on 21,371 pounds per acre ($641.13 per acre),
- Ginseng - $2.85 per pound at 2,000 pounds per acre ($5,700 per acre),
- Sweet cherries - 17 cents per pound based on 9,148 pounds per acre ($1,555.16 per acre),
- Table grapes - 3 cents per pound based on 20,820 pounds per acre ($624.60 per acre).
- It appears that cranberries, ginseng, sweet cherries and table grapes will be paid the per acre amount based on the amounts shown not the amount of production each producer has.
- Prevent plant acres that are then planted to a qualified cover crop by August 1 will receive a $15 payment per acre planted.
- The maximum total payment(s) are as follows:
- Non-specialty crops - $250,000 per entity/person,
- Milk and hogs - $250,000 per entity/person,
- Specialty crop producers - $250,000 per entity/person.
- However, no entity/person can receive more than $500,000 related to MFP payments
- Adjusted Gross Income (AGI) limits remain the same at $900,000 based on the average of 2014-2016 income. However, if at least 75% of your AGI is from farming, there is no AGI limit in that situation. However, if you have an entity that is the farmer, this 75% of AGI provision will apply at both the entity and person level. For example, the entity may qualify for $250,000 and is owned by 2 owners. One owner AGI is more than 75% from farming and the other does not. In this case, only $125,000 of payments may be allowed.
The bottom line is that close to $10 billion of payments will go out beginning sometime in mid-August.
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