Executive director, Marion County FSA
Marketing assistance Commodity Credit Corp. (CCC) loans for nine months for the 2008 crop year of wheat, oats, barley, and honey are available through Marion County and other county FSA offices until March 31. Two types of CCC loans are offered — farm-stored and warehouse for those commodities stored in elevator facilities.
Since market assistance loans are nonrecourse, producers have the option of delivering or forfeiting to CCC the crops that were pledged as collateral at loan maturity in satisfaction of the indebtedness. Basic county loan rates, adjusted for premiums and discounts, are wheat, $3.08 per bushel, barley, $1.80 per bushel, and oats, $1.35 per bushel.
Since prevailing market prices currently exceed these loan rates, loan deficiency payments or LDPs are not available at this time.
At the chosen time of repayment, a producer can “market repay” a loan at that crop’s CCC determined value or Posted County Price (PCP) and be credited with a market gain only when the PCP is at or below the county loan rate. Otherwise, normal settlement payments are calculated by multiplying the loan rate and quantity plus accumulated interest costs.
Producers are reminded that all grain under the CCC farm-stored loan cannot be removed or disposed of without prior county FSA office authorization or repayment. The county office staff may issue release authorizations based on a request by telephone or in-person when a producer is ready to move farm-stored grain.
A loan violation is subject to monetary and administrative penalties, such as repaying the loan at principal plus interest, liquidated damages, calling the loan, and denial of future farm-stored loans and loan deficiency payments. In addition, all commodity loans are subject to “spot checks.” FSA advises producers to check the condition of their farm-stored grain on a regular basis.