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USDA issues final 2006 direct payments, final 2005-crop corn CCPs

Agriculture.com Staff 10/12/2006 @ 10:07am

Deputy U.S. Secretary of Agriculture Chuck Conner today announced that the U.S. Department of Agriculture's Commodity Credit Corporation (CCC) has begun issuing $3 billion in final 2006 direct payments to producers with base acres enrolled in the Direct and Countercyclical Program (DCP) and $1.6 billion in final 2005-crop corn counter-cyclical payments to producers on farms with corn crop acreage bases enrolled in this program.

"These direct and countercyclical payments are being issued on schedule," said Conner. "It's part of USDA's successful implementation of the 2002 farm bill and the Bush administration's commitment to helping America's farmers and ranchers."

The final 2005-crop corn counter-cyclical payment (CCP) rate is $0.35 cents per bushel. The 2002 farm bill authorizes partial CCP allotments in October and February, with final payment made at the end of the marketing year. Producers with corn base who accepted partial payments in October 2005 and February 2006 received $0.28 per bushel. They are due an additional $0.07 per bushel. The final marketing year price for 2005-crop corn is $2.00 per bushel.

Since the effective price for soybeans exceeds its target price, CCC will not issue any 2005-crop soybean CCPs. The final marketing year price for 2005-crop soybeans is $5.66 per bushel.

To receive direct or counter-cyclical payments, producers with base acres must be enrolled in DCP for the respective program year for an eligible commodity. Producers with base acres of the following commodities are eligible for DCP payments: barley; corn; grain sorghum, including dual purpose varieties that can be harvested as grain; oats; oil and non-oil varieties of canola, crambe, flaxseed, mustard, rapeseed, safflower, sesame and sunflower; peanuts; rice, excluding wild rice; soybeans; upland cotton; and wheat.

Direct payments are not based on producers' current production choices, but instead are tied to historical acreage bases and yields. For each commodity, the direct payment for each crop year equals 85% of the farm's commodity base acreage times the farm's direct payment yield times the direct payment rate.

The CCP rate is the amount by which a commodity's target price exceeds its effective price. The effective price equals the direct payment rate plus the higher of: the national average market price received by producers during the marketing year, or the national average loan rate for the commodity. These payments also are not based on producers' current production choices, but instead are tied to historical acreage bases and yields. The CCP amount equals the CCP rate, times 85% of the farm's commodity base acreage, times the farm's CCP yield for that commodity. The USDA Farm Service Agency distributes direct payments and CCPs on behalf of CCC.

For more information on the Direct and Counter-cyclical Payment (DCP) program, visit your local USDA Service Center or click here.

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