USDA ANNOUNCES PREVAILING WORLD MARKET PRICE, LOAN DEFICIENCY PAYMENT RATE, AND USER MARKETING CERTIFICATE PAYMENT RATE FOR UPLAND COTTON Media Contact: Dann Stuart (202) 690-0474

NEWS Farm Service Agency Public Affairs Staff 1400 Independence Ave SW Stop 0506, Room 3624-South Washington, D.C. 20250-0506 Release No. 1521.02 Program Announcement Dann Stuart (202) 690-0474 dan_stuart@wdc.usda.gov USDA ANNOUNCES PREVAILING WORLD MARKET PRICE, LOAN DEFICIENCY PAYMENT RATE, AND USER MARKETING CERTIFICATE PAYMENT RATE FOR UPLAND COTTON WASHINGTON, May 2, 2002 -- The Department of Agriculture's Commodity Credit Corporation today announced the prevailing world market price, adjusted to U.S. quality and location (adjusted world price or AWP), for Strict Low Middling (SLM) 1-1/16 inch (leaf grade 4, micronaire 3.5-3.6 and 4.3-4.9, strength 26.5-28.4 grams per tex, length uniformity of 81 percent) upland cotton (base quality), the coarse count adjustment (CCA), and the loan deficiency payment rate in effect from 5:00 p.m., E.D.T., Thursday, May 2, 2002, through 3:59 p.m., E.D.T., Thursday, May 9, 2002. The user marketing certificate (Step 2) payment rate will be in effect from 12:01 a.m., E.D.T., Friday, May 3, 2002, through midnight Thursday, E.D.T., May 9, 2002. This period represents Week 3 of the 6-week transition period from using current price quotations to using forward price quotations in calculating the AWP. The procedure was adopted to avoid an abrupt change in the AWP that could occur with no transition period due to the difference between the new and old crop price quotations. This procedure is also used to calculate the U.S. Northern Europe (USNE) price to determine the maximum allowable Step 1 adjustment. For Weeks 3 and 4, the blended Northern Europe (NE) price = [NE (current price) + NE (forward price)] / 2. The blended USNE is calculated using a comparable formula. Cents/lb. Adjusted World Price (AWP) ................ 28.13 Coarse Count Adjustment (CCA) ............. 0.00 Loan Deficiency Payment Rate .............. 23.79 User Marketing Cert. Rate (Step 2)......... 0.39 This week's AWP and CCA are determined as follows: Blended NE Price ....................... 41.67 Adjustments: Avg. U.S. spot market location ... -10.70 SLM 1-1/16 inch cotton ............ -2.85 Avg. U.S. location ................ 0.01 Sum of Adjustments ....................... - 13.54 ADJUSTED WORLD PRICE ..................... 28.13 Current NE Price ........................ 40.06 Current NE Coarse Count Price ........... -37.12 Adjustment to SLM 1-1/32 inch cotton .... -6.35 COARSE COUNT ADJUSTMENT (Cannot be less than zero)0.00 Sufficient data are not available to determine a blended CCA for the week. Regulations governing the CCA require that it be based on available data. Thus, the CCA of 0.00 cents per pound will be in effect through 3:59 p.m., E.D.T., May 9. The Federal Agriculture Improvement and Reform Act of 1996 provides that the AWP may be further adjusted if: 1) the AWP is less than 115 percent of the current crop year loan rate for base quality upland cotton, and 2) the USNE price exceeds the NE price. This week, both conditions for this adjustment have been met, and it has been determined that this further adjustment to the AWP shall be 0.00 cents per pound. Because the AWP 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 23.79 cents per pound is the difference between the base loan rate of 51.92 cents and today's AWP. Step 2 payments are provided this week because, for four consecutive weeks, the USNE price has exceeded the NE price by more than 1.25 cents per pound and the AWP has not exceeded 134 percent of the loan rate for upland cotton. Relevant data for the Step 2 program follow: AWP as % Fri/Thur of 2001 USNE Period Base Loan USNE NE Less Step 2 Dates Week Ending Rate Price Price NE Price Rate Applicable .......... cents/lb ........... 1 04/11/02 53.9 45.55 42.05 3.50 2.25 (04/12-04/18) 2 04/18/02 55.5 44.55 41.81 2.74 1.49 (04/19-04/25) 3 04/25/02 54.2 42.85 40.57 2.28 1.03 (04/26-05/02) 4 05/02/02 54.2 41.70 40.06 1.64 0.39 (05/03-05/09) The next announcement of the AWP, CCA, LDP rate, and user marketing certificate payment rate for upland cotton will be on Thursday, May 9, 2002, at 5 p.m., E.D.T. Further program information is available from Wayne Bjorlie, (202) 720-7954, e-mail wayne_bjorlie@wdc.fsa.usda.gov. # NOTE: Farm Service Agency (FSA) news releases and media advisories are available on the World Wide Web at FSA's home page: http://www.fsa.usda.gov.