01/17/07 Soft white wheat loan rate drops

Farm and Ranch January 17, 2007 USDA recently announced 2007 crop wheat loan rates and for soft white wheat in the Pacific Northwest; Suess: "And once again soft white wheat has been the commodity that is going to take the biggest hits on the loan rates again." That's Washington Wheat Commission Chairman Randy Suess. The soft white wheat loan rate in the region dropped 11 cents a bushel from 2006. The hard red spring wheat loan rate was also lower by generally eight cents a bushel, while hard red winter saw at six cent increase. That makes the hard red winter loan rate higher than soft white by 40 cents or more. Suess says they can understand the changes given the formula USDA uses but; Suess: "But on the other hand it is not supposed to be market distorting and yet that is exactly what it is going to do. Would you take a loan rate that is 60-cents lower than another kind of wheat? If you are really going down the loan rate road and need that money after harvest it really makes peoples' decisions quite different. So we are hoping they will take a look at this again and just see where the fairness is in this whole loan rate situation where they set them so low we would never be eligible for a Loan Deficiency Payment. I mean wheat would have to get extremely low in value for us ever to receive one." It's the loan rate in combination with the Posted County Price that determines if there is a Loan Deficiency Payment. I'm Bob Hoff and that's the Northwest Farm and Ranch Report on the Northwest Ag Information Network.