Federal Relief Payments Help Farmers Hit by Commodity Price Drop

Confusing Application Process Concerns Some Applicants

Key Takeaways:

• Farmers confused by the new ECAP application process may benefit from waiting as FSA offices catch up on the latest guidance.
• CPAs cannot sign Form CCC-943, but a signed letter confirming income requirements is an acceptable alternative.
• ECAP payments are automatic for most farmers based on prior acreage reports, but full payment depends on remaining federal funding.

Hamstrung by foreign competition and a strong U.S. dollar, American farmers in 2024 struggled with low commodity prices and are still feeling the effects this year. But a bill enacted in December 2024 will provide some relief.

Nearly $10 billion in federal emergency crop assistance is available to help farmers who were hit with severe commodity price drops in 2024, under the American Relief Act of 2025. These economic relief payments are based on planted and prevented planted crop acres for eligible commodities for the 2024 crop year.

In addition to the emergency crop assistance, the legislation extended the Farm Bill through Sept. 30, 2025.

Confusion Over Application Process

While some farmers have already received their first of two potential payments under the Emergency Crop Assistance Program (ECAP), confusion over the application process has producers and even some Farm Services Administration (FSA) personnel in the dark about how to proceed.

It’s important to understand that the funds available through ECAP are being disbursed to eligible farmers in two phases in order to ensure there is enough federal money to cover all the claims.

• For the first phase, farmers do not need to submit form CCC-943, but instead are receiving automatic payments based on previous acreage reports to FSA for ECAP commodities.
• In the first phase, farmers do need to sign the form FSA 63 to receive 85% of the payment that shows on that form.
• If you are over your payment limits, farmers need to submit the new Form CCC-943. Because the form is new, it is unfamiliar and has caused some confusion. It may be better to wait a few weeks to allow the FSA time to also understand the process across their organization and avoid duplicated efforts. See below for further explanation and understanding that this is just not a simple signature from your CPA, EA or attorney.
• The second phase payments will constitute the remaining 15% of each farmer’s calculated payments, but only if the $10 billion of funding has not been exhausted.
• If your acreage is registered with FSA for previous programs you have participated in, the paperwork they already have in their system can be used to support your application for ECAP. Anything that was eligible for payments last year is eligible for this year’s ECAP payment.
• Your limitations are not contingent upon whether you had limits on the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs. If you are over your payment limits, your CPA may have to go to work for you and calculate your last three years’ average gross income.
• You do not need to prove economic damage to qualify for the 2025 ECAP payments. This is strictly a commodity price support program.

943 Application Sign-Off by CPA or EA

There is one important note about the Form CCC-943 — it must be signed off by your certified public accountant (CPA), attorney, or enrolled agent (EA). The problem is CPAs cannot sign that form due to the AICPA standards. As an alternative to submitting the form, you can instead submit a letter from your CPA or EA attesting that you meet the test that 75% or more of your average gross income is from farming (during 2022, 2021 and 2020), as long as certain required additional information is also included in this letter.  However, some FSA offices are not aware of this alternative at this early date, which is another reason that giving a little time for all FSA employees to catch up on the new process might make it easier for you.

To simplify the delivery of ECAP payments, the FSA has begun sending pre-filled applications to producers who submitted acreage reports to FSA for 2024 eligible ECAP commodities. Farmers do not have to wait for their pre-filled ECAP application to apply. They can visit fsa.usda.gov/ecap to apply using a login.gov account or contact their local FSA office to request an application.

Economic Impact

An analysis by the Food and Agricultural Policy Research Institute (FAPRI) indicates that the top 10 eligible states for the ECAP relief payments, based on estimated total payments for corn, soybeans, wheat, cotton, sorghum, rice, barley, oats and peanuts, are:

• Texas: $963 million
• Iowa: $846 million
• Illinois: $790 million
• Kansas: $787 million
• Nebraska: $625 million
• Minnesota: $616 million
• North Dakota: $597 million
• South Dakota: $497 million
• Indiana: $400 million
• Missouri: $391 million

Corn, soybeans and wheat are expected to make up 80% of the total estimated payments, or about $7.9 billion.

See below for a table of ECAP payments per crop per acre.

Why Commodity Prices Dropped

The reasons behind the drop in commodity prices in 2024 are varied, but primarily related to foreign trade and the strength of the U.S. dollar.

American farmers faced stiff competition from Brazil in the soybean market. China, which is a major consumer of soybeans, shifted a large portion of its purchases to Brazil. Moreover, due to its climate, Brazil is able to push the world supply of soybeans higher because the country produces two soybean crops per year, compared to the U.S.’s one.

Additionally, there were surpluses of other grain crops, particularly wheat and milo, at the same time that world demand for U.S. grain decreased because of the strong dollar. Other countries bought elsewhere where their currencies could go farther. A strong dollar may sound like a good thing, but when it comes to exporting, it isn’t.

Questions?

Federal relief payments will assist some farmers this year to meet the challenge of low commodity prices.

If you would like to discuss your eligibility for the ECAP payments and how to apply, contact an Adams Brown agriculture advisor.

Eligible Commodities and Payment Rates

The following table shows eligible commodities for ECAP payments and the amount per acre for which each crop is eligible.