New loan repayment rate methods for marketing loan program participants

Farm and Ranch April 13, 2009 Changes are coming to USDA's marketing loan program. First, Jose Gonzalez with the national Farm Service Agency office says another pulse crop has been added to the program. Gonzalez: "We have also added a large chickpea. It was added as a commodity for the 2009 crop. So that is a new addition." Also starting for the 2009 crop year there will be no limit for marketing loan and loan deficiency payment benefits. The USDA has also announced what it says is an improved and more stable system for determining non-recourse marketing assistance loan repayment rates and loan deficiency payments rates for wheat, feed grains, pulse crops and oilseeds. The 2008 Farm Bill gave the Agriculture Secretary the option to devise an alternative from the current system. Beginning April 15, 2009, for wheat, corn, grain sorghum, soybeans, barley, oats, canola, flaxseed and sunflower seed, USDA's Commodity Credit Corporation will determine and publish daily loan repayment rates based on the average market prices during the preceding 30 days. At the same time, CCC will begin announcing each day a repayment rate based on the preceding five days. The new method will replace the current one, which is based on the previous day's market rates. The effective alternative repayment rate will be the lower of either the 30-day average or the 5-day average. For pulse crops, mustard seed, rapeseed and safflower, the loan repayment rate will be the lower of either the 30-day average or the rate as its currently determined. I'm Bob Hoff and that's the Northwest Farm and Ranch Report on the Northwest Ag Information Network.