USDA's CCC Announces Payment Rates for Upland Cotton

December 21, 2001

Yesterday, USDA's Commodity Credit Corporation announced the prevailing world market price, adjusted to U.S. quality and located (i.e., the adjusted world price or AWP), for upland cotton at 28.1 cents per pound. In addition, the loan deficiency payment rate was established at 23.11 cents per pound. The user marketing certificate (Step 2) payment rate will be in effect from 12:01 a.m., Eastern Standard Time (E.S.T.), Friday December 21, 2001, through midnight Thursday, E.S.T. on January 17, 2002.

Because the adjusted world price for the period is less than 51.92 cents per pound, which is the base quality loan rate, the loan repayment rate during this period is equal to the AWP, adjusted for the specific quality and location. The loan repayment amount will be further adjusted by the application of a storage credit, and interest will be waived.

Because the AWP is less than the 2001-crop loan rate, cash loan deficiency payments (LDPs) will be paid to eligible producers who agree to forego obtaining price support loans with respect to the 2001 crop. The payment rate of 23.11 cents per pound is the difference between the base loan rate of 51.92 cents and today's AWP.

Step 2 payments will not be made this week. The USNE price did not exceed the NE price by more than 1.25 cents per pound.

The next announcement of the AWP and the LDP rate for upland cotton will be Thursday, December 27, 2001, at 5:00 p.m., E.S.T.