Enrollment recently began for the Direct and Counter-cyclical Payment program.

DCP enrollment will be open through June 1. Producers are urged to contact the Farm Service Agency and enroll now rather than wait until good farming weather. Producers need to remember that DCP base acres were computed several years ago; there is no way to update base acres to current planting patterns.

USDA computes DCP program payments using base acres and payment yields established for each farm. Eligible producers receive direct payments in October at rates established by statute regardless of market prices. Normally, payments run around $12 to $20 per base acre.

For 2012, advance direct payments are not authorized in accordance with the Food, Conservation, and Energy Act of 2009. Counter-cyclical payment rates vary depending on market prices.

Counter-cyclical payments are issued only when the effective price for a commodity is below its target price. The effective price is the higher of the national average market price received during the 12-month marketing year for each covered commodity and the national average loan rate for a marketing assistance loan for the covered commodity. Since loan rates are low compared to actual market prices, it is unlikely there will be a counter-cyclical payment.

One final note is that producers must report acreages by the June 15 (small grains) and July 15 (all other crops and land uses) acreage reporting deadlines. This is the final year for the DCP program as the current Farm Bill expires this year.

Low-interest loans

One final reminder to producers: interest rates are as low as ever for commodity loans and storage facility loans. Rates of 1Z\, percent and 1C\, percent are current for January.

Producers looking for short-term capital might want to consider a commodity loan. Producers who are planning on a new grain bin, silo, grain dryer or hay storage structure might want to consider a facility loan.

Contact the Farm Service Agency for specific details at 724-482-4800, Ext. 2.

Luke Fritz is executive director of the Butler County Farm Service Agency.