USDA Update

By Rod Johnson

October 29, 2004

Very strong southwest winds blew across the county Friday, October 22, causing some corn and grain sorghum to blow down. Winter wheat land is in mostly good shape and was not affected except in a few isolated areas. Corn harvest is progressing rapidly and grain sorghum and sunflower harvests are just getting under way.

The President has signed legislation that includes disaster funding for agriculture for drought and other natural disasters. I don’t anticipate we will be taking signup in this program until after the first of the year for two main reasons. Initially it will take USDA some time to get the regulations written and computer software developed and FSA Employees trained. Secondly FSA Offices have a considerable of amount of other workload to complete. We will be busy taking signup applications for the 2005 Direct and Counter-cyclical Program (DCP) and we will have a lot of Loan Deficiency Payment (LDP) applications for corn and grain sorghum due to low crop prices.

Agriculture Secretary Ann M. Veneman has announced the availability of first partial (35%) 2004 crop year Counter-cyclical (CC) program payments for wheat, corn, sorghum, barley, oats, soybeans, upland cotton, rice and peanuts and final counter-cyclical payments for the 2003 crop year. CC payments are available to producers participating in the Direct and Counter-cyclical Program (DCP) if "effective" prices for each eligible commodity are less than the respective "target" prices set in the 2002 Farm Bill. The important thing to remember is that CC payments are NOT GUARANTEED and the final counter-cyclical payment rate will not be determined until October 2005. Any advance payments received that exceed the final payment level MUST BE REFUNDED. This was the case for the 2003 CC payments of which 100% of the advance payment had to be refunded in October 2004. Additional advance CC payments up to 65% of the projected payment will be available in February, 2005. Most producers marked "NOT TO RECEIVE" advance counter-cyclical payments on their 2004 DCP contracts. Producers may change their contracts and request the advance payment at this time, in February, or do nothing and the payment if earned will automatically be paid when the final Counter-cyclical rate is determined in October 2005.

The 2004 crop year projected annual payment rates and the first partial payment rates, equal to 35 percent of the total amount, are:

Commodity Unit Rate Rate

Wheat bushel 0.10 0.0350

Corn bushel 0.40 0.1400

Sorghum bushel 0.27 0.0945

Barley bushel 0.15 0.0525

Oats bushel 0.016 0.0056

Soybeans bushel 0.26 0.0910

As tentatively announced in the USDA Update two weeks ago, Temple Grain Elevators LLP have been approved to receive and store grain for government loan under warehouse code 8-0898 for elevators at Haswell, Sheridan Lake and Towner.