Source:  USDA, 6/9/11

Agriculture Secretary Tom Vilsack announced today that USDA will issue approximately $10 million in partial 2010-crop counter-cyclical payments to producers with peanut base acres enrolled in USDA's Direct and Counter-Cyclical Payment (DCP) Program.

“The Counter-Cyclical Payment Program is another important tool that USDA’s Farm Service Agency provides for farmers who produce various crops, including peanuts,” said Vilsack. “It is an integral part of the safety net vital to America’s farmers.”

The 2008 Farm Bill provides one partial counter-cyclical payment in an amount up to 40 percent of the projected counter-cyclical rate. The payment may be issued after 180 days of the marketing year but not later than 30 days prior to the end of the marketing year. The projected counter-cyclical payment rate is the amount by which the target price, specified by the 2008 Farm Bill, exceeds the 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 2010-crop peanut counter-cyclical payment rate is $5.20 per ton, equal to 40 percent of the difference between the target price of $495.00 per ton and an effective price of $482.00 per ton. The effective price is equal to the projected average market price of $446.00 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.

For more information on DCP, including a table displaying the target price, projected average market price, loan rate, direct payment rate, effective price and projected counter-cyclical rates, visit a local FSA office or the FSA DCP website at www.fsa.usda.gov/dcp.