Department of Agriculture issues zero counter-cyclical payment rate

Determinations by the U.S. Department of Agriculture on the status of final 2008 crop counter-cyclical type payments for wheat, barley and oats under the Direct & Counter-cyclical Program (DCP) have been reached and shall not be made since national average effective prices for specified market periods are above the triggering target levels.

Producers are eligible for counter-cyclical payments only when a crop?s effective price goes below its respective target price as authorized in the 2008 Farm Bill.

The effective price equals the DCP direct payment rate plus the higher of either: (1) the national average market price received by producers during the marketing year; or (2) the national average loan rate for the commodity.

The national average prices received by producers for commodities can be tracked at the FSA Internet site: fsa.usda.gov.

For wheat, a $6.78 per bushel national average price for the approved marketing period of June 1, 2008, through May 31, 2009, is compared to a $2.75 loan rate. The use of the $6.78 price plus a $0.52 per bushel direct payment rate equals a $7.30 rate, which is well above the $3.92 target price creating a zero counter-cyclical payment rate.

Whenever a counter-cyclical payment is authorized, USDA calculates these payments based on historical program base acreage and payment yields, not current actual production.

The counter-cyclical payment earning status of corn, sorghum and soybean crops will be assessed later in the fall.

Bill Harmon is executive director of the Farm Service Agency in Marion County.

More from Hillsboro Free Press
Tabor falls to two conference rivals
It was a rough week for the Tabor College volleyball team, taking...
Read More