USDA Announces First Partial Countercyclical Payments (11-1-05)

The U.S. Department of Agriculture (USDA) announced its first partial countercyclical payments for the 2005-2006 marketing year, the National Corn Growers Association (NCGA) notes.

Corn's total projected rate is 40 cents per bushel, and the first partial rate is 14 cents per bushel.

Growers began to receive the first partial rate in October, will receive the second in February and again at the end of the marketing year in August.

Growers may receive countercyclical payments when the effective prices for eligible commodities are less that their target prices set in the 2002 farm bill. The effective price equals the direct payment rate plus the higher of either the national average market price received by growers during the marketing year or the national average loan rate for the commodity. The countercyclical payment is calculate by multiplying the payment rate by 85 percent of the farm's base acreage and then multiplying that number by the farm's countercyclical payment yield for each crop.

In early October, USDA established the final payment rate for the 2004-2005 marketing year at 29 cents per bushel for corn.