Agriculture Secretary Ann M. Veneman announced the availability of first partial 2004 crop year counter-cyclical program payments for wheat, corn, sorghum, barley, oats, soybeans, upland cotton, rice and peanuts and the final counter-cyclical payments for the 2003 crop year.
“This begins the third year of the 2002 farm bill programs,” said Veneman. “Timely implementation of these programs continues to be a priority for the U.S. Department of Agriculture.”
Counter-cyclical payments are available to producers participating in the Direct and Counter-cyclical Program if “effective” prices for each eligible commodity are less than the respective “target” prices set in the 2002 farm bill.
USDA is projecting the following 2004 crop year projected annual payment rates and the first partial payment rates, equal to 35 percent of the total amount:
- Cotton, 0.1373 cents per pound; 0.0481 cents per pound.
- Rice, 90 cents per hundredweight; 31.5 cents per bushel.
- Soybeans, 26 cents; 0.091.
- Corn, 40 cents; 14 cents.
- Grain sorghum, 27 cents; 9.45 cents.
- Wheat, 10 cents; 3.5 cents.
- Peanuts, $73 per short ton; $25.55 per short ton.
Veneman said a first installment payment is not available for other oilseeds because the projected effective price equals the target price.
The 2003 crop year final counter-cyclical payment rates are 3.93 cents per pound for upland cotton and $73.00 per short ton for peanuts. Wheat, corn, sorghum, barley, oats, soybeans and other oilseeds will not receive a payment because average selling prices were above the target price.
Rice payment rates
The final payment rates for rice will be based on the market year average price reported by USDA's National Agriculture Statistics Service, scheduled for release on Jan. 31, 2005.
For each commodity eligible for direct and counter-cyclical payments, the CCP equals the payment rate times 85 percent of the farm's base acreage times the farm's counter-cyclical payment yield.
The counter-cyclical payment rate is the amount by which the target price of each DCP commodity exceeds its effective price. The effective price equals the direct payment rate plus the higher of: (1) the national average market price received by producers during the marketing year, or (2) the national loan rate for the commodity.
Producers may elect to receive the counter-cyclical payments in three installments: the first was available in October, a second in February and the final at the end of the marketing year for each crop.
The first partial payment may be up to 35 percent of the total projected counter-cyclical payment. A second partial counter-cyclical payment may be issued to producers in February in an amount not to exceed 70 percent of the projected counter-cyclical payment, less any payments already received.
Final counter-cyclical payments will be determined at the end of the marketing year for each crop. The end of the 2004/05 marketing year for each commodity is:
- Wheat, barley and oats, May 31, 2005
- Rice, upland cotton and peanuts, July 31, 2005
- Corn, grain sorghum and soybeans, Aug. 31, 2005
Base for cotton
For upland cotton and peanuts, the final counter-cyclical payments are based on the final counter-cyclical payment rate, less any first and second partial payments producers elected to receive.
For wheat, corn and sorghum, final counter-cyclical payment rates are less than the projected rates used for first partial payments issued in October 2003 because market prices increased. The 2002 farm bill requires that any overpayments to producers must be repaid. Overpayments will be deducted from producers' 2004 and subsequent crop year DCP payments, unless producers otherwise notified their local Farm Service Agency (FSA) office by June 15, 2004.
The 2003 crop year overpayment rates are $0.0315 per bushel for wheat, $0.077 per bushel for corn and $0.014 per bushel for grain sorghum.
The final counter-cyclical payment rate calculations and the first and second partial payment rates for each commodity can be found on FSA's Web site at http://www.fsa.usda.gov/pas/farmbill/mya_entry.htm. More information on DCP is available at local FSA offices and on FSA's Web site at: www.fsa.usda.gov.