USDA to Issue Partial 2009-Crop CCPs for Upland Cotton, Peanuts

March 4, 2010 06:00 PM
 

Roger Bernard, Farm Journal Policy & Washington Editor

 

USDA announced it will issue partial 2009-crop upland cotton and peanut counter-cyclical payments (CCPs) but no partial CCPs will be issued to wheat, barley, oats, long grain rice, short and medium grain rice, pulse crops, corn, grain sorghum, soybeans, and the other oilseeds.

The 2008 Farm Bill provides that one partial CCP, in an amount up to 40% of the projected CCP, may be issued after 180 days of the marketing year. The projected CCP rate is the amount by which the target price of each commodity exceeds its effective price. The effective price equals the direct payment rate plus the higher of either the projected national average market price received by producers during the marketing year or the national average loan rate for the commodity.

The partial 2009-crop upland cotton CCP rate is 1.03 cents per lb., equal to 40% percent of the difference between the target price of 71.25 cents per lb. and an effective price of 68.67 cents per pound. The effective price is equal to the projected average market price of 62 cents per lb. plus the direct payment rate of 6.67 cents per pound.

The partial 2009-crop peanuts CCP rate is $9.20 per ton, equal to 40 percent of the difference between the target price of $495.00 per ton and an effective price of $472.00 per ton. The effective price is equal to the projected average market price of $436.00 per ton plus the direct payment rate of $36.00 per ton.

Under the 2008 Farm Bill, producers are required to repay any amount by which the partial payment exceeds the actual counter-cyclical payments determined after the end of the marketing year.

USDA also announced it will not issue final 2008-crop CCPs for long grain rice and short and medium grain rice because their average market prices exceed levels that would trigger these payments.

The final market year average price published by USDA's National Agricultural Statistics Service on Jan. 29, 2010, is $14.90 per hundredweight for long grain rice and $24.80 per hundredweight for short and medium grain rice. The direct payment rate of $2.35 per hundredweight is the same for long grain rice and short and medium grain rice. Thus, the respective effective prices of $17.25 per hundredweight for long grain rice and $27.15 hundredweight for short and medium grain rice far exceed the target price of $10.50 per hundredweight for both long grain rice and short and medium grain rice.


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