NEWS
Farm Service Agency
Public Affairs Staff
1400 Independence Ave SW
Stop 0506, Room 3624-South
Washington, D.C. 20250-0506

 
Release No. 1418.07

 
Stevin Westcott (202) 720-4178

 
USDA ANNOUNCES SECOND 2006-CROP AND FINAL 2005-CROP COUNTER-CYCLICAL PAYMENTS

 
WASHINGTON, Feb. 12, 2007 - The U.S. Department of Agriculture today announced it will begin issuing $555 million in second partial counter-cyclical payments (CCPs) to producers with 2006-crop upland cotton or peanut base acreage enrolled in the Direct and Counter-cyclical Payment Program (DCP). USDA will also issue $55 million in final CCPs for eligible producers with 2005-crop rice base.

 
Producers with barley, corn, grain sorghum, oats, rice, soybeans, other oilseeds or wheat base acreage enrolled in DCP will not receive these payments because market prices are well above levels triggering them.

 
Producers are eligible for CCPs when effective prices fall below target prices as specified in the 2002 Farm Bill. 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. USDA calculates CCPs based on historical base acreage and payment yields, not current production.

 
Second Advance 2006-crop Counter-cyclical Payment Rates

 
The 2002 Farm Bill allows producers to receive CCPs in three installments:
  • The first in October (up to 35 percent of the total projected rate);
  • The second in February (up to 70 percent of the total projected rate, less any amount previously received); and
  • The final payment after the end of the marketing year (less any amount previously received), which varies by commodity.

 
USDA issued 2006-crop first partial payments based on projected CCP rates in October 2006 for producers with upland cotton or peanut base. USDA bases the second partial payment rates for 2006 on supply, demand and price forecasts from USDA's World Agriculture Supply and Demand Estimates, released on Feb. 9, 2007. The total projected and second partial payment rates for 2006 are:

 
Commodity
Unit
Total Projected Rate
Second Partial Rate
---dollars per unit---
Upland cotton
pound
0.1373
0.0961
Peanuts
short ton
104.00
72.80

 
2006 Final Counter-cyclical Payments

 
USDA determines final CCPs after the end of the marketing year for each commodity. The end of the 2006/07 marketing year for each commodity is:

 
  • Wheat, barley and oats - May 31, 2007
  • Rice, upland cotton and peanuts - July 31, 2007
  • Corn, grain sorghum and soybeans - Aug. 31, 2007

 
Rice 2005-crop Year Final Counter-cyclical Payment Rate

 
The final 2005-crop CCP rate for rice is $0.50 per cwt. The rate is based on the final market year average rice price of $7.65 per cwt set forth in USDA's National Agricultural Statistics Service (NASS) Agricultural Prices, published Jan. 31, 2007. The rate is the effective price of $10.00 subtracted from the target price of $10.50. The effective price adds the farm price of $7.65 to the direct payment rate of $2.35.

 
Overpayments

 
The 2002 Farm Bill requires that any overpayments to producers must be repaid. If not repaid, USDA will deduct overpayments from any DCP payments received after the final payments are determined.

 
More information on DCP is available at local USDA Farm Service Agency (FSA) offices and on FSA's Web site at: http://www.fsa.usda.gov.

 
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NOTE: Farm Service Agency (FSA) news releases are available on FSA's Web site: http://www.fsa.usda.gov.