COVID Relief Package Information for Cattlemen

Yesterday the House released details of a $1.4 trillion FY21 omnibus and $900 billion COVID-relief package. It is TCFA's understanding that both chambers intend to clear the stimulus bill, which will be paired with the year-end spending measure, by midnight when the latest CR is set to expire.

Below are some high-level details on key provisions of relevance to cattle producers. Full text of the COVID agreement can be found here, and a summary of all agriculture provisions can be found here. Several of the provisions listed below have been priorities for NCBA since the start of the pandemic and were ultimately included as a direct result of our advocacy efforts on capitol hill. 
 
COVID provisions:
Includes $11 billion for USDA’s Office of the Secretary to prevent, prepare for and respond to coronavirus by providing support to agricultural producers, growers and processors. From this amount, the Secretary:

• Shall make supplemental CFAP payments to cattle producers;
• Shall use no less than $20 million to improve and maintain animal disease prevention and response capacity;
• May extend the term of a marketing assistance loan;
• May make loans and grants to small and midsized food processors or distributors, seafood processing facilities and vessels, farmers markets, and producers to respond to COVID-19, including measures to protect workers.

 
CFAP for Cattle Producers – As mentioned above, the bill provides additional assistance for cattle producers impacted during the height of the pandemic. The mathematical formula for determining the cattle payment is as follows:

Slaughter/Fed cattle, Feeder cattle +600, Feeder cattle -600:

• Cattle inventory for the period of April 16-May 14 X 50% (CARES ACT SALES RATE-CFAP1 CCC inventory rate-CFAP2 inventory rate)
• Slaughter/Fed cattle example: Inventory x 50% x (214-33-55)= $63/head

Slaughter/Mature cattle and All Other Cattle:

• Cattle inventory for the period of April 16-May 14 X 25% (CARES ACT SALES RATE-CFAP1 CCC inventory rate-CFAP2 inventory rate)
• All other cattle (breeding stock) example: inventory x 25% x (102-33)=$17.25

To ensure assistance more closely aligns with actual losses, USDA is required to make supplemental CFAP 1 and CFAP 2 payments, subject to available funds, not to exceed 80% of losses, notwithstanding payment limits, and broadening agriculture income for AGI purposes to include agricultural sales, including gains, agricultural services, sale of agricultural real estate and prior year net operating loss carry forward.
 
Grants for Improvements to Meat and Poultry Facilities to Allow for Interstate Shipment – The bill provides $60 million to make facility upgrade and planning grants to existing meat and poultry processors to help them move to federal inspection and be able to sell their products across state lines. The bill also requires USDA to work with states and report on ways to improve the existing Cooperative Interstate Shipment program. This is a modified version of the RAMP UP Act, spearheaded by NCBA earlier this Congress.
 
Meat and Poultry Processing Study and Report – The bill requires a report on the availability of financing for new and existing meat and poultry processing capacity.
 
PPP Tax Deductibility – The bill specifies that forgiven Paycheck Protection Program (PPP) loans will not be included in taxable income. Additionally it clarifies that deductions are allowed for expenses paid with proceeds of a forgiven PPP loan, effective as of the date of enactment of the CARES Act and applicable to subsequent PPP loans. The bill also includes $284 billion in a second round of PPP loans and simplifies the forgiveness process for loans under $150,000.
 
Statutory Dealer Trust – The bill establishes a Federal livestock dealer trust, similar to the Packer Trust. Note, this provision is identical to the Securing All Livestock Equitably (SALE) Act of 2020.
 
FY 21 Omnibus:

• Extends Livestock Mandatory Reporting (LMR) through September 30, 2021.
• Maintains the Electronic Logging Device (ELD) provision for livestock haulers, extending the waiver through the duration of FY21.
• Addresses the Agricultural Quarantine Inspection (AQI) shortfall by providing $32 million in funding for FY21.
• Renews protection for livestock producers from EPA greenhouse gas reporting requirements for FY21.
• Provides $115 million for the Bureau of Land Management to continue work in their multi-year proposal to decrease wild horse populations in FY21.

 
Please note that we are reviewing the 5,593 package but believe the above covers the bulk of relevant cattle industry provisions. As always, please do not hesitate to reach out with questions or additional information.