USDA has announced that corn farmers will receive a final 2004-crop counter-cyclical payment of 29 cents per bushel and grain sorghum producers a CCP payment of 27 cents per bushel on 85 percent of their acreage base.

The Agriculture Department also said it has begun sign-up for the 2006 direct and counter-cyclical payments for all program crops. Farmers have until June 1 to complete sign-up for the payments authorized by the 2002 farm bill without having to pay an additional fee.

USDA makes final counter-cyclical payments at the end of an applicable crop's 12-month marketing year based on the difference between the target price, the national average selling price and the Commodity Credit Corp. loan rate for each program crop.

The 2002 farm bill provides for two partial 2004-crop counter-cyclical payments. The first was in October 2004 and the other in February 2005. USDA said the final marketing year price for 2004-crop corn is $2.06 per bushel and the final price for grain sorghum is $1.79 per bushel.

Producers who took first and second partial counter-cyclical payments on 2004-crop corn received 28 cents per bushel and will be due an additional 1 cent per bushel. Producers who took first and second partial payments on grain sorghum received 18.9 cents per bushel and are due an additional 8.1 cents per bushel.

USDA said producers will not receive final 2004-crop counter-cyclical payments for soybeans since effective prices exceed target prices. Producers who took first and second partial counter-cyclical payments for soybeans were over-paid.

In accordance with the 2002 farm bill, over-payments will automatically be deducted from future crop year direct and counter-cyclical payments, unless producers made other repayment arrangements with their local Farm Service Agency office before June 15, 2005. The 2004-crop year over-payment rate is 18.2 cents per bushel for soybeans.

USDA said it will accept late applications for the 2006 DCP sign-up from June 1 through Sept. 30, 2006 if farmers pay a $100 late fee. Producers sign DCP contracts annually and can choose not to participate in the program in any given year.

Producers can visit any USDA Service Center, or their administratively assigned center, to complete their 2006 DCP contract. Farmers can also sign up online, choosing payment options, assigning crop shares and signing and submitting their contracts from any computer with Internet access. DCP participants can view and print out submitted contract options at any time.

The electronic service is available to all producers who are eligible to participate in DCP and who obtain eAuthentication accounts. The service has strict security measures to protect participants' private information. Only federal employees with authorization have access to information submitted electronically.

The electronic service is available at http://www.fsa.usda.gov/egov/edcp_default.htm. To access the service, producers must have an active USDA eAuthentication Level 2 account, which requires filling out an online registration form at http://www.eauth.egov.usda.gov followed by a visit to the local USDA Service Center for identity verification.

DCP payment computations use base acres and payment yields established for each farm. Producers receive direct payments at rates established by statute regardless of market prices. Counter-cyclical payment rates vary depending on market prices.

Counter-cyclical payments are issued only when the effective price (which takes into account the direct payment rate, market price and loan rate) for a commodity is below the target price for the commodity.

In the three years since this program was authorized by the 2002 farm bill, USDA has issued approximately $20 billion in DCP payments to America's agricultural producers.

The FY 2006 crop year direct payment rates and maximum potential counter-cyclical rates:

  • Wheat: 52 cents, 65 cents per bushel.

  • Corn: 28 cents, 40 cents per bushel.

  • Grain sorghum: 35 cents, 27 cents per bushel.

  • Upland cotton: 6.67 cents and 13.73 cents per pound.

  • Rice: $2.35 and $1.65 per hundredweight.

  • Soybeans: 44 cents, 36 cents per bushel.

  • Peanuts: $36.00, $104.00.

More information on direct and counter-cyclical payments is available at USDA Service Centers and on FSA's Web site at: http://www.fsa.usda.gov.

e-mail: flaws@primediabusiness.com