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USDA established 150 years ago on May 15

WILLMAR -- On May 15, 1862, President Abraham Lincoln signed the Department of Agriculture Act that established the U.S. Department of Agriculture. The signing was symbolic of Lincoln's recognition and vision that America's farmers and ranchers could provide a safe, ample food supply for our nation and the world.

Two and one-half years after establishing the department, in what would be his final annual message to Congress, Lincoln called USDA "The People's Department." At that time, about half of all Americans lived on farms, compared with about 2 percent today.

Within three months following the signing of the Department of Agriculture Act, Lincoln also signed two other pieces of legislation that would have a profound impact on U.S. agriculture and society.

On May 20, 1862, Lincoln signed the Homestead Act which offered to any American or prospective citizen who was the head of a family or over 21 years of age, 160 acres of public land for settlement and cultivation of Western land.

Under the Homestead Act, title to the government-owned land was issued after the settler had resided on it for five years and made improvements. The settler could also gain title by residing six months, improving the land, and paying $1.25 per acre.

On July 2, 1862, Lincoln signed the Morrill Act, which also donated government-owned land for the purpose of establishing public land grant universities that would teach agriculture and mechanical engineering. Every state acceptedand established one or more institutions.

Over the last 150 years, USDA's efforts have helped support the growth and success of American agriculture, drive economic growth, conserve natural resources and build stronger communities. Today, through its continued work on food, agriculture, economic development, science, natural resource conservation and a host of other issues, USDA is still fulfilling Lincoln's vision of touching the lives of every American, every day.

Program sign-up ends June 1

Local Farm Service Agency offices continue to accept requests to participate in either the Direct and Counter-cyclical Program or the Average Crop Revenue Election program. Application requests will continue to be accepted through the sign-up deadline of June 1.

Under the Direct and Counter-cyclical Program, participants can qualify for two types of payments, both of which are computed using a farm's base acres and payment yields.

Direct payment rates are specified in the 2008 farm bill and are earned without regard to market prices. For that reason, the direct payment is sometimes referred to as the "guaranteed" payment.

The per bushel direct payment rates are: barley - $0.24; corn - $0.28; oats - $0.024; soybeans - $0.44; and wheat - $0.52.

Counter-cyclical payments, unlike direct payments, are not guaranteed since payment rates will vary depending on market prices. Therefore, counter-cyclical payments can be sizable during years when prices are low, with little or no payment when prices are high.

Authorized by the 2008 farm bill, the optional Average Crop Revenue Election program provides a financial safety net based on state revenue losses, and takes the place of the price-based counter-cyclical payments under the Direct and Counter-cyclical Program.

By participating in the Average Crop Revenue Election program, producers agree to forgo counter-cyclical payments, accept a 20 percent reduction in their direct payments, and accept a 30 percent reduction in the commodity loan rates for all commodities produced on the farm.

March milk payments set

Due to the combination of unusually high feeding costs and lower milk prices, dairy producers will qualify for payments under the U.S. Department of Agriculture's Milk Income Loss Contract program for milk produced and sold during the month of March.

Initially authorized by the 2002 farm bill, and then reauthorized under the 2008 farm bill, the Milk Income Loss Contract program provides monthly financial assistance whenever the Boston Class I milk price falls below the payment trigger price of $16.94 per hundredweight. In that case, dairy producers qualify for a payment rate equal to 45 percent of the price difference.

The $16.94 trigger price is adjusted upward whenever the monthly national average cost for a 16 percent protein feed ration is greater than $7.35 per hundredweight.

According to USDA, feeding costs for the month of March warranted an upward adjustment of the $16.94 trigger price to $21.39, resulting in a final payment rate of approximately $0.82 per hundredweight for milk produced and sold during the month of March.

According to USDA's National Agricultural Statistics Service, the average price received by Minnesota dairy producers during March was $18.40 per hundredweight, down $0.20 from February's average price. Last March, Minnesota's average milk price was $20.90 per hundredweight.

Based on milk futures prices and projected feeding costs, it appears likely that dairy producers will continue to qualify for Milk Income Loss Contract program payments for milk produced and sold through the month of September.

Nelson is executive director of the USDA Farm Service Agency in Kandiyohi County.