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Showing posts from April, 2020

Farmers Qualify for Paycheck Protection Program (PPP) loans and Economic Injury Disaster Loans (EIDL)

By Rob Holcomb, EA, Extension Educator, Agricultural Business Management
Last Friday, April 24, 2020, the President signed the Paycheck Protection Program and Health Care Enhancement Act.For the most part, this law provides additional funding for the Payroll Protection Program (PPP) and Economic Injury Disaster Loans (EIDL).
Both of these relief loan programs were set up by the CARES Act.However, the funding for the PPP loan program was exhausted in less than two weeks.The new legislation allocates an additional $310 billion to the PPP program, setting aside $60 billion for loans made to smaller lenders, including Community Development Financial Institutions.The new law also adds $50 billion to the general EIDL loan fund.
Additionally, the new law removed a restriction that had prohibited agricultural enterprises from applying for EIDL loans.Agricultural enterprises now qualify for EIDL loans.
Finally, in the first round of PPP loans, some farmers were being told that agricultural enterpr…

COVID-19 Response: Initial details on Coronavirus Food Assistance Program (CFAP)

by Megan Roberts, Extension educator

The United States Department of Agriculture (USDA) announced initial details of the Coronavirus Food Assistance Program (CFAP). This program is funded through dollars already appropriated through last month’s CARES Act. As previously described in an earlier post, the CARES Act appropriated $9.5 billion in agricultural economic relief, $14 billion in replenishment to the Commodity Credit Corp, and billions to food and nutrition programs.

According to the USDA, the $19 billion in the first round of CFAP includes $16 billion in direct payments to producers and $3 billion in indirect commodity purchases. CFAP uses all of the $9.5 billion of discretionary USDA emergency funding from CARES, $6.5 billion in existing CCC funding and Section 32 authority, and $3 billion in CARES bulk agricultural product purchases (which will then be distributed to food banks and other hunger relief programs).

Limited details are available from the USDA; however, the Senate…

COVID-19 response: What’s next for farm financial relief?

By Megan Roberts, Extension educator

For farm businesses waiting for economic relief packages related to COVID-19 market disruptions, the last two weeks have not brought significant additional news. From the Minnesota government, the Rural Finance Authority (RFA) was amended to include human contagious diseases as a qualifying disaster. This opens up low interest loans through RFA for economic losses from COVID-19. Additionally, Minnesota added $50 million to restock RFA's budget. This occurred in late March. From the federal government, the last two weeks have brought additional clarification related to the CARES Act Paycheck Protection Program (PPP) and a better understanding of how Families First Act provisions affect farmers with employees. For more information on these programs, visit our previous blog post on the topic. Note: As of April 15, the SBA has allocated all PPP funds. New legislation is being discussed for more funds but until that is passed no new PPP loans may be…

Farmers can sign up for WHIP+ program now

WORTHINGTON, Minn (4-6-20) — The Wildfires and Hurricanes Indemnity Program Plus (WHIP+) program has expanded to include producers impacted by drought and excess moisture, as well as sugar beet growers to help producers recover from losses related to 2018 and 2019 natural disasters. This additional signup began on March 23 for producers to apply for eligible losses of drought and excess moisture. USDA is also entering into agreements with six sugar beet processing cooperatives to distribute $285 million to grower members of those cooperatives who experienced loss. The bill added excessive moisture and D3 and D4 drought as qualifying losses for WHIP+ assistance.
WHIP+ Sugar Beet Loss Assistance  The USDA will provide $285 million through sugar beet processing cooperatives to compensate grower members for sugar beet crop losses in 2018 and 2019. Details will be finalized in agreements between USDA and participating sugar beet processing cooperatives. Sugar beet producers who are membe…

Minnesota farm income ticks upward in 2019; uncertainty ahead

MINNEAPOLIS/ST. PAUL (04/02/20) — Minnesota farmers continued to struggle with low profitability in 2019. Median net farm income was up slightly from the previous year at $36,211, but was still historically low.

Each of the past five years has fallen in the bottom third of historical records tracked by University of Minnesota Extension and the Agricultural Centers of Excellence within Minnesota State when adjusted for inflation. 

“Farming as a business is far from profitable,” said Keith Olander of the Minnesota State Northern Agricultural Center of Excellence. “Minnesota farmers are in need of a good year.”  

Last year, 28 percent of farms lost money; 45 percent lost working capital; and 46 percent did not earn enough to cover scheduled debt payments.

“The average producer did a little better, but inside the numbers there was a lot of diversity,” said Dale Nordquist of the University of Minnesota’s Center for Farm Financial Management. “More than in most years, earnings depended on where…

COVID-19 response: How the Families First and CARES Acts affect farm businesses

by Megan Roberts, Extension educator, Ag Business Management
This post was updated on April 23, 2020 to reflect new legislation and funding. Funding may lapse quickly, so farm businesses should work quickly with their lending professional to access federal loans, as applicable.

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The Minnesota and federal government have recently passed several major economic stimulus acts related to the COVID-19 response. The laws have major financial implications for individuals and businesses, including farmers. The blog post briefly overviews major provisions of the recent federal laws. These laws are especially important to understand if your farm or agribusiness employs workers. If you are a self-employed farmer that does not employ other individuals, funding may still be available to you by using your Schedule C or F earnings to calculate loan amounts. Throughout this blog post links are provided to governmental websites that offer more detailed, up-to-date FAQs related to the quickly …