USDA announced it will begin issuing $555 million in second partial counter- cyclical payments to producers with 2006-crop upland cotton or peanut base acreage enrolled in the Direct and Counter-Cyclical Payment Program. It will also issue $55 million in final CCPs for eligible producers with 2005-crop rice base.

Producers with barley, corn, grain sorghum, oats, rice, soybeans, other oilseeds or wheat base acreage enrolled in DCP will not receive these payments for the 2006 marketing year because market prices are well above levels triggering them.

Producers are eligible for CCPs when effective prices fall below target prices as specified in the 2002 farm bill. The effective price equals the direct payment rate plus the higher of: (1) the national average market price received by producers during the marketing year; or (2) the national average loan rate for the commodity.

USDA calculates CCPs based on historical base acreage and payment yields, not current production.

In announcing the second advance 2006-crop counter-cyclical payment rates, USDA said the 2002 farm bill allows producers to receive CCPs in three installments:

  • The first in October (up to 35 percent of the total projected rate);

  • The second in February (up to 70 percent of the total projected rate, less any amount previously received); and

  • The final payment after the end of the marketing year (less any amount previously received), which varies by commodity.

USDA issued 2006-crop first partial payments based on projected CCP rates in October 2006 for producers with upland cotton or peanut base.

USDA bases the second partial payment rates for 2006 on supply, demand and price forecasts from USDA's World Agriculture Supply and Demand Estimates, released on Feb. 9, 2007.

The total projected and second partial payment rates for 2006 are:

Commodity Unit Total projected rate Second partial rate
dollars per unit
Upland cotton pound 0.1373 0.0961
Peanuts short ton 104.00 72.80

USDA determines final CCPs after the end of the marketing year for each commodity. The end of the 2006-07 marketing year for each commodity is:

  • Wheat, barley and oats — May 31, 2007

  • Rice, upland cotton and peanuts — July 31, 2007

  • Corn, grain sorghum and soybeans — Aug. 31, 2007

USDA said the final 2005-crop CCP rate for rice is 50 cents per hundredweight. The rate is based on the final market year average rice price of $7.65 per hundredweight set forth in USDA's National Agricultural Statistics Service Agricultural Prices, published Jan. 31, 2007.

The rate is the effective price of $10.00 subtracted from the target price of $10.50. The effective price adds the farm price of $7.65 to the direct payment rate of $2.35.

The 2002 farm bill requires that any overpayments to producers must be repaid. If not repaid, USDA will deduct overpayments from any DCP payments received after the final payments are determined.

More information on DCP is available at local USDA Farm Service Agency offices and on FSA's Web site at: http://www.fsa.usda.gov.