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First partial payments announced

November 01, 2005

Colleen Cashell, executive director for USDA's Farm Service Agency in Washington County, on Monday announced USDA's first partial 2005-crop year counter-cyclical payments for corn, sorghum and barley.

The 2002 Farm Bill requires counter-cyclical payments to be made in October, when possible.

Cashell said payments have already been issued to the Direct and Counter-cyclical participants who requested these payments during the 2005 year DCP sign up period.

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

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.

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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 the payments



To calculate the counter-cyclical payment rate, multiply 85 percent of the farm's base acreage by the farm's counter-cyclical payment yield.

The counter-cyclical 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:

  • The national average market price producers received during the marketing year; or

  • The national loan rate for the commodity.


Producers may receive partial installments of counter-cyclical 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 percent of the total counter-cyclical payment projection. The second payment cannot exceed 70 percent of the counter-cyclical payment projection less any payments already received.

USDA determines each crop's final counter-cyclical 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; and

  • Corn, grain sorghum and soybeans - Aug. 31.


More information on DCP is available at local FSA offices and on FSA's Web site at: www.fsa.usda.gov

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