First Partial 2005-Crop Year Countercyclical Payments Announced

The 2005-crop year projected annual payment rates and first partial payment rates equal to 35% of the total amount announced by USDA. Compiled by staff

Published on: Oct 26, 2005

Today USDA announced first partial 2005-crop year counter-cyclical payments for wheat, corn, sorghum, barley, oats, soybeans, upland cotton, rice and peanuts. The 2002 Farm Bill requires countercyclical payments to be made in October when possible.

USDA determines countercyclical payments using the October World Agriculture Supply and Demand Estimates WASDE, effective Oct. 12, 2005. WASDE provides the most current supply and demand information available.

Producers in USDA's Direct and Counter-cyclical Payment Program may receive counter-cyclical payments when effective prices for eligible commodities are less than respective target prices set in the 2002 Farm Bill. The 2005-crop year projected annual payment rates and first partial payment rates, equal to 35% of the total amount, are:

 

 

Total

First Partial

Commodity

Unit

Projected Rate

Rate

 

 

─ dollars per unit ─

 

Corn

bushel

0.40

0.1400

Sorghum

bushel

0.27

0.0945

Barley

bushel

0.15

0.0525

Upland cotton

pound

0.1373

0.0481

Rice

hundredweight

0.55

0.1925

Peanuts

short ton

104.00

36.40

Producers of wheat, oats, soybeans, and other oilseeds are ineligible for a first installment payment as effective prices equal or exceed respective target prices.

Calculating countercyclical payments

To calculate the countercyclical payment rate multiply 85% of the farm's base acreage by the farm's countercyclical payment yield.

The countercyclical payment rate is the amount by which the target price of each commodity exceeds the effective price. The effective price equals the direct payment rate plus the higher of either: (1) the national average market price producers received during the marketing year; or (2) the national loan rate for the commodity. Producers may receive partial installments of countercyclical payments in October, a second in February and then at the end of the marketing year for each crop.

The first partial payment may be up to 35% of the total countercyclical payment projection. The second payment cannot exceed 70% of the countercyclical payment projection less any payments already received. USDA determines each crop's final countercyclical payments at the end of the marketing year. The end of the 2005/06 marketing year for each commodity is:

  • Wheat, barley and oats - May 31, 2006
  • Rice, upland cotton and peanuts - July 31, 2006
  • Corn, grain sorghum and soybeans - August 31, 2006