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NEWS Farm Service Agency Public Affairs Staff 1400 Independence Ave SW Stop 0506, Room 3624-South Washington, D.C. 20250-0506
Release No. 1480.07
Stevin Westcott (202) 720-4178
WASHINGTON, July 12, 2007 - The U.S. Department of Agriculture today announced that it will not issue final 2006-crop counter-cyclical payments to farmers enrolled in the Direct and Counter-cyclical Payment Program (DCP) with respect to wheat, barley and oats because prices for these commodities have averaged well above levels that trigger counter-cyclical payments.
USDA makes final counter-cyclical payments at the end of an eligible crop's 12-month marketing year. The 2002 Farm Bill provides for the availability of two partial counter-cyclical payments. USDA did not issue a first or second partial payment for the 2006 crop of wheat, barley or oats due to strong markets.
The counter-cyclical payment rate is the amount by which the "target price" of each commodity, specified by the 2002 Farm Bill, exceeds its effective price. The effective price equals the direct payment rate plus the higher of either: (1) the national average market price received by producers during the marketing year; or (2) the national average loan rate for the commodity.
The final marketing year prices per bushel are $4.26 for wheat, $2.59 for barley, and $1.87 for oats. The final counter-cyclical payment rates for wheat, barley or oats are zero because their effective prices exceed target prices.
Item | Wheat $ per bushel | Barley $ per bushel | Oats $ per bushel |
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(1) Target price | 3.92 | 2.24 | 1.44 |
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(2) Average market price | 4.26 | 2.59 | 1.87 |
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(3) Loan Rate | 2.75 | 1.85 | 1.33 |
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(4) Higher of (1) or (2) | 4.26 | 2.59 | 1.87 |
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(5) Direct payment rate | 0.52 | 0.24 | 0.024 |
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(6) Effective price (4) +(5) | 4.78 | 2.83 | 1.894 |
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Final CCP rate (1) - (6), but not less than zero | 0.00 | 0.00 | 0.00 |
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For each commodity, the counter-cyclical payment for each crop year equals 85 percent of the farm's base acreage times the farm's counter-cyclical payment yield times the counter-cyclical payment rate.
For more information on direct and counter-cyclical payments, visit your local USDA Service Center or the Farm Service Agency Web site at: http://www.fsa.usda.gov.
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