Cottonseed Payments Announced

July 12, 2000

USDA’s Farm Service Agency Administrator Keith Kelly says that $79 million in payments for the 1999-crop cottonseed payment program will be made as of Monday, July 10. The program was first announced by Secretary Dan Glickman on March 29 to help farmers offset losses from low 1999-crop cottonseed prices.

Payments are based on the quantity of cottonseed USDA officials estimate to have been produced from the bales and lint weight reported on the applications. The average payment rate provided is $12.23 per ton of cottonseed based on an estimated 6.46 million tons of cottonseed. The announced payment rate is based on applications for 16,574,913 bales of 1999-crop cotton having an average weight of 490.2 pounds per bale. The approximate payment rate per average bale is $4.77.

Payments are being made to cotton gins because the gins usually retain proceeds from the sale of the cottonseed. However, when applying for payments, gins agreed to share payments with the farmers to the extent that the effect of low cottonseed prices was borne by the farmers rather than the gin.

Applications were sent to 1,018 gins, and all applications had to be returned by June 26.