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USDA to make counter-cyclical payment

Commodity Unit Total Projected Rate
-dollars per unit-
First Partial Rate
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 cwt 0.55 0.1925
Peanuts short ton 104.00 36.40

USDA announced it would make a first partial 2005-crop-year, counter-cyclical payment for corn, sorghum, barley, upland cotton, rice and peanuts. It did not say how soon the payment would be issued.

Producers of wheat, oats, soybeans and other oilseeds will not receive the first installment payment because the projected prices for those commodities equal or exceed the target prices for those commodities in the 2002 farm bill.

USDA determines counter-cyclical payments using the October World Agriculture Supply and Demand Estimates, effective Oct. 12. The WASDE provides the most current supply and demand information available, according to a press release issued by the Agriculture Department.

Producers enrolled in USDA's Direct and Counter-cyclical Payment Program may receive counter-cyclical payments when effective prices for eligible commodities are less than target prices set in the 2002 farm bill. The 2005-crop year projected annual payment rates and first partial payment rates, equal to 35 percent of the total amount, are shown in the accompanying table.

The Farm Security and Rural Investment Act of 2002 (farm bill) requires those payments be made in October when possible, but USDA did not say if it would meet that October timeline.

To calculate the counter-cyclical payment rate for individual farms, the Farm Service Agency multiplies 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: (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 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, 2006.

  • Rice, upland cotton and peanuts - July 31, 2006.

  • Corn, grain sorghum and soybeans - August 31, 2006.

More information on USDA's Direct and Counter-Cyclical Payment Program is available at local FSA offices and on FSA's Web site at:


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