FSA Makes CC Program Announcements: Final 2003 CCP Rate and 1^{st}2004 Advance CCP Rate

Thewait is almost over for growers eager to learn what the final 2003Counter-Cyclical Program payment rate will be. Announcement of a 2003 marketyear average price of 61.8 cents per pound by USDAÕs National Ag StatisticsService put the wheels in motion for Farm Service Agency officials to make thefinal calculations and begin the process of making payments to DCP programparticipants. NASS published the data on October 12.

Usingthe 61.8 cent figure announced by NASS, the final 2003 Counter-Cyclical Paymentrate is estimated to be 3.93 cents per pound. Growers who received the initial2.01 cent 2003 CC advance payment in October 2003 would receive an additional1.92 cents per pound.

Growerswho did not receive the first 2003 advance payment would receive the full3.93-cent payment amount because the second upland cotton advance payment ratewas set at zero.

Asif the pending announcement of the 2003 final CC payment rate werenÕt enough,USDA is also expected to announce the first 2004 advance payment rate forUpland cotton.

Itis thought that the 2004 program announcement will come at the same time asannouncement of the final 2003 CC payment rate. If that is the case FSA couldbe making both payments at the same time.

FSAwill set the first 2004 advance payment rate based on the supply, demand andprice implications included in the October 12 World Supply and Demand Estimatereport. Based on this report, the first 2004 advance payment for the CCP isexpected to be the maximum allowed under the 2002 Farm Bill.

Ifthat assumption is correct growers can expect to see an advance payment rate ofapproximately 4.8 cents, or 35 percent of the maximum 13.73 cent Upland cottonCC payment rate.

Basedon these estimates, producers could receive between 6.72 and 8.73 cents perpound in 2003 and 2004 CC program payments within the next few weeks. Somegrowers may net less than these amounts if they received any advance paymentson grain sorghum or corn in 2003.

Thefinal 2003 payment rate for these two crops are expected to fall to zerobecause price rallies carried their average market price above the point atwhich a CC payment would be triggered.

Disaster Signed & Sealed By President

Focus Now Shifts To FSA To Get It Delivered

Additionalinformation and specifics about the 2003/2004 program will be provided as itbecomes available.

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**How 2000 CDP Payments werecalculated:**

Acres X APHYield or County Average X .65 = Maximum Disaster Level (lbs.)

Max. DisasterLevel - (Actual or Assigned Production X Quality Adjustment Factor*) =Eligible Disaster Level (lbs.)

Eligible DisasterLevel X MPCI Price X .65 X Non-Harvest Factor** = Calculated Payment($'s)

* Quality Adjustment factor = Ave. Loan Value of Crop / CountyAve Loan Value

** Non-HarvestFactor = To be determined by the Texas State FSA Committee.

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