Step 2 Cotton Price Set at 1.26 cents

WASHINGTON - May 14/02 - SNS -- In recent weeks the U.S. Northern Europe Price (USNE) for upland cotton has exceeded the and the Northern Europe Price (NE), forcing the USDA's Commodity Credit Corporation to set the payment rate for the user marketing certificate program at 1.26 cents per pound.

The program is also known as step 2. The rate is in effect through midnight Thursday, May 16, 2002.

The Step 2 payment rate is changing today because of the enactment of Pub.L. 107-171, the Farm Security and Rural Investment Act of 2002, which provided that the payment rate should be the difference between the U.S. Northern Europe Price (USNE) and the Northern Europe Price (NE).

Step 2 payments are provided this week because, for four consecutive weeks, the USNE price has exceeded the NE price, and the Adjusted World Price (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     04/18/02   55.5       44.55    41.81   2.74    1.49  (04/19-04/25)
2     04/25/02   54.2       42.85    40.57   2.28    1.03  (04/26-05/02)
3     05/02/02   54.2       41.70    40.06   1.64    0.39  (05/03-05/09)
4     05/09/02   51.8       40.19    38.93   1.26    0.01  (05/10-05/13)
                            40.19    38.93   1.26    1.26  (05/14-05/16)