Agriculture Secretary Ann Veneman announced Wednesday that first partial countercyclical program payment rates for 2004-crop wheat, feed grains, upland cotton, rice, soybeans, other oilseeds and peanuts will be announced soon after the October World Agriculture Supply and Demand Estimates (WASDE) scheduled for release Oct. 12, 2004. By statute, 2004-crop first partial countercyclical payments are to be made during October to the extent practicable.
"By using the October report, we can incorporate the most current supply and demand information into the projections," says Veneman. "This is also the same approach and timing used for last year's program."
Countercyclical payments are available to producers participating in the 2004 Direct and Countercyclical Program (DCP).
Calculating First Partial Countercyclical Payments
Producers are eligible for countercyclical payments if effective prices are less than the target prices set in the 2002 Farm Bill. For each DCP commodity, the payment equals the countercyclical payment rate times 85% of the farm's base acreage times the farm's countercyclical payment yield.
The countercyclical payment rate is the amount by which the target price of each DCP commodity exceeds its effective price. The effective price equals the direct payment rate plus the higher of: (1) the national average market price received by producers during the marketing year for the commodity, or (2) the national average loan rate for the commodity.
The first partial payment may be up to 35% of the total projected countercyclical payment, at the discretion of the Secretary. First partial rates will be equal to 35% of the total projected rates, according to USDA's announcement. A second partial payment may be issued in February. Final countercyclical payments will be determined based on USDA's final-season average market price at the end of the marketing year for each commodity.
More information on DCP is available at local USDA Farm Service Agency (FSA) offices and on FSA's Web site.