USDA announced that upland cotton and peanut producers have begun receiving the final counter-cyclical payments for their 2006 crops. The department will not issue CCP payments to producers of other crops for 2006.
Strong markets for corn, grain sorghum, soybean and rice have resulted in the effective prices of those crops exceeding their respective target prices in 2006, according to USDA's Farm Service Agency.
Under the 2002 farm bill, the CCP rate is the amount by which a commodity's target price exceeds its effective price. The latter 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 average loan rate for the commodity.
The counter-cyclical payment amount equals the CCP payment rate times 85 percent of the farm's base acreage times the farm's Counter-cyclical payment yield for upland cotton or peanuts.
The final 2006-crop upland cotton counter-cyclical rate is 13.73 cents per pound, the maximum upland cotton payment rate because market prices have averaged well below the 52-cent-per-pound loan rate for the marketing year.
Because of these low market prices, USDA is able to calculate the final counter-cyclical payment rate for upland cotton at this time. If market prices were higher, USDA would calculate the payment rate after USDA's National Agricultural Statistics Service announces the national average market price in October.
The 2002 farm bill allows farmers and landowners to receive partial 2006-crop CCP payments in October 2006 and in February 2007. Producers who accepted the two partial payments received 9.61 cents per pound. They are now due an additional 4.12 cents per pound.
USDA announced that producers with enrolled peanut base acres will receive 2006-crop counter-cyclical payments of $104 per short ton, the maximum payment rate permitted. The final weighted average marketing year price for 2006-crop peanuts, which NASS announced on Aug. 31, is $354 per short ton, $1 lower than the $355 per ton national average loan rate.
Peanut farmers who accepted the first and second partial payments in October 2006 and February 2007 received $72.80 per ton and are now due an additional $31.20 per ton.
For more information on the direct and counter-cyclical payment program, contact your local USDA Service center or access the following Internet site: www.fsa.usda.gov. Click on I Want To. Find FSA Fact Sheets. Under Topic, select Income Support. Under Year, select 2006. Click GO, and look for Direct and Counter-cyclical Payment Program (March 1, 2006).