 NEWS
Farm Service Agency
Public Affairs Staff
1400 Independence Ave SW
Stop 0506, Room 3624-South
Washington, D.C. 20250-0506
Release No. 1401.03
Program Announcement
Stevin Westcott (202) 720-4178
stevin_westcott@wdc.usda.gov
USDA ANNOUNCES PREVAILING WORLD MARKET PRICE, LOAN
DEFICIENCY PAYMENT RATE, AND USER MARKETING CERTIFICATE
PAYMENT RATE FOR UPLAND COTTON
WASHINGTON, Jan. 2, 2003 -- The Department of
Agriculture's Commodity Credit Corporation (CCC) today
announced the prevailing world market price, adjusted to
U.S. quality and location (adjusted world price or AWP), for
Strict Low Middling (SLM) 1-1/16 inch (leaf grade 4,
micronaire 3.5-3.6 and 4.3-4.9, strength 25.5-29.4 grams per
tex, length uniformity of 80-82 percent) upland cotton (base
quality), the coarse count adjustment (CCA), the loan
deficiency payment rate, and the user marketing certificate
(Step 2) payment rate that will be in effect from 12:01
a.m., E.S.T., Friday, Jan. 3, 2003, through midnight,
E.S.T., Thursday, Jan. 9, 2003.
Cents/lb.
Adjusted World Price (AWP) ................ 43.31
Coarse Count Adjustment (CCA) ............. 0.32
Loan Deficiency Payment Rate .............. 8.69
User Marketing Cert. Rate (Step 2)......... 5.88
This week's AWP and CCA are determined as follows:
NE Price ................................ 56.50
Adjustments:
Avg. U.S. spot market location ... -10.38
SLM 1-1/16 inch cotton ............ -2.80
Avg. U.S. location ................ -0.01
Sum of Adjustments ....................... - 13.19
ADJUSTED WORLD PRICE ..................... 43.31
NE Price ................................ 56.50
NE Coarse Count Price ................... -50.63
Adjustment to SLM 1-1/32 inch cotton .... -5.55
COARSE COUNT ADJUSTMENT (Cannot be less than zero) 0.32
The Farm Security and Rural Investment Act of 2002
provides that the AWP may be further adjusted if: 1) the
AWP is less than 115 percent of the current crop year loan
rate for base quality upland cotton, and 2) the USNE price
exceeds the NE price. This week, both conditions for this
adjustment have been met, and it has been determined that
this further adjustment to the AWP shall be 0.00 cents per
pound.
Because the AWP for the period is less than 52.00
cents per pound, which is the base quality loan rate, the
loan repayment rate during this period is equal to the AWP,
adjusted for the specific quality and location. The loan
repayment amount will be further adjusted by the application
of a storage credit, and interest will be waived.
Because the AWP is less than the 2002-crop loan rate,
cash loan deficiency payments (LDPs) will be paid to
eligible producers who agree to forego obtaining price
support loans with respect to the 2002 crop. The payment
rate of 8.69 cents per pound, is the difference between the
base loan rate of 52.00 cents and today's AWP.
Step 2 payments are provided this week because, for
four consecutive weeks, the USNE has exceeded the NE price
and the AWP has not exceeded 134 percent of the loan rate
for upland cotton. Relevant data for the Step 2 program
follow:
AWP as %
Fri/Thur of 2002 USNE
Period Base Loan USNE NE Less Step 2 Dates
Week Ending Rate Price Price NE Price Rate Applicable
.......... cents/lb ...........
1 12/12/02 79.4 59.10 54.48 4.62 4.62 (12/13-12/19)
2 12/19/02 81.5 60.65 55.60 5.05 5.05 (12/20-12/26)
3 12/26/02 82.8 61.67 56.27 5.40 5.40 (12/27-01/02)
4 01/02/03 83.3 62.38 56.50 5.88 5.88 (01/03-01/09)
NOTE: The next announcement of the AWP, CCA, and LDP
rate for upland cotton will be on Thursday, Jan. 9, 2003, at
5 p.m., E.S.T.
Further program information is available from Scott
Sanford, (202) 720-3392, e-mail scott_sanford@wdc.usda.gov.
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NOTE: Farm Service Agency (FSA) news releases and media
advisories are available on the World Wide Web at FSA's home
page: http://www.fsa.usda.gov.
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