COVID-19 Working Paper: Unpriced Commodity Inventory and COVID-19 Pandemic Assistance

The first round of the Coronavirus Food Assistance Program (CFAP 1) provided payments to agricultural producers adversely affected by marketing losses caused by the Coronavirus (COVID-19) pandemic. Since the only producers eligible to receive a CFAP 1 payment were those who held unpriced inventory, ERS researchers examined the level of unpriced inventory held post-harvest 2019. Administrative USDA, Farm Service Agency (FSA) data on CFAP 1 applications and payments, and farm-level data on unpriced inventory were drawn from the 2019 Phase 3 Agricultural Resource Management Survey (ARMS) to understand unpriced inventory held and CFAP 1 payments distributed to agricultural producers. For the majority of producers, significant levels of inventory existed post-harvest 2019. Since payments were made on the lower of 50 percent of production or the level of unpriced inventory, the majority of payments were made on production levels, from 58 percent of upland cotton payments to 81 percent of spring wheat payments. ERS researchers also analyzed the degree to which commodity-specific CFAP 1 rates reflected changes in county-average cash prices between January and April 2020 for corn, soybeans, and spring wheat. The share of counties in which the CFAP 1 rate exceeded 52.5 percent of the decline in cash prices ranged between 49.0 percent for corn and 99.9 percent for spring wheat.