Reminder: Marketing Assistance Loans Available
A number of factors, including favorable weather conditions in the U.S. and large production around the globe, have contributed to incredibly low prices for wheat throughout rural America. Prices have dipped so low that loan rates have been triggered in many areas, meaning that Marketing Assistance Loans (MALs) and Loan Deficiency Payments (LDPs) through USDA’s Farm Service Agency (FSA) are available to producers in order to help farmers meet cash-flow needs without having to sell their commodities during harvest time and to wait for more favorable marketing conditions. With a MAL, farmers can repay the loan at less than the loan rate (plus accrued interest) or receive an LDP.
The availability of MALs and LDPs can vary day to day based on the Posted County Price, which is based on the Terminal Market. This figure is updated every morning on the Farm Service Agency’s website. Additionally, in order to be eligible for MALs and LDPs, the farmer must retain “beneficial interest” in the commodity (both control of the commodity and title to the commodity). Additional information and forms to show that the farmer retains beneficial interest can be obtained from your local FSA office.
Producers should also note that the MAL and LDP programs have implications for payment limitations. If the MAL is repaid at less than the principal, the difference is referred to as a “marketing loan gain,” which is subject to the aggregate $125,000 payment limit; this single limitation applies to payments made through the Agriculture Risk Coverage (ARC) program, Price Loss Coverage (PLC) program, MALs and LDPs. However, a farmer also has the option of purchasing a Commodity Certificate, which can be exchanged for their outstanding loan collateral instead of forfeiting the commodity. Gains through the use of Commodity Certificate are not subject to the payment limitation. More information can be found in this FSA fact sheet.
Secretary Vilsack Says Next Farm Bill Should Consider the Needs of the Ag Industry
Secretary Vilsack said this week that recruiting military veterans and youth into farming should be a consideration as developments towards the next Farm Bill continue. Vilsack stated that the next Farm Bill should consider what the actual needs of the agriculture industry are, including what he says is the necessity of a new generation of farmers to address the global food demand. In speaking on the needs of the agriculture industry, Vilsack commented on the rising average age of farmers, and the need to encourage the participation of youth in agriculture. Secretary Vilsack, in highlighting the U.S. Chamber of Commerce’s program “Hiring our Heroes”, also called for the recruiting of veterans in agriculture. Not only are there more than 5 million veterans living in rural areas, but veterans will also benefit from participation in agriculture as a way to transition back into society and post-military life. As a broad effort to match veterans with training and job openings in a wide range of fields, the “Hiring our Heroes” program incorporates efforts to include opportunities in agriculture, after the 2014 Farm Bill mandated the implementation of programs and actions related to veteran outreach. It is important, says Vilsack, that we allow veterans and young people to play a significant role in the future of agriculture in this country.
National Wheat Action Plan Advisory Council Meets in Denver
The National Wheat Action Plan (NWAP) Advisory Council met in Denver this week to discuss the further development of the NWAP to increase public and private wheat research, improve wheat productivity and farmer profitability, and increase grower investment in and implementation of modern wheat production practices. In discussions with Aimpoint, the Advisory Council discussed plans for increased development and implementation by the end of this calendar year. The Advisory Council continues to work towards the overall goal of driving greater involvement in and support for the wheat industry from farmers, industry partners and other stakeholders, while attracting investment of private capital to stimulate expenditure on private and public wheat research.
Reminder: Respond to NAWG and NASS Surveys
NAWG is undertaking a survey process of wheat farmers to get feedback about Farm Bill programs and to lay the groundwork for developing Wheat’s priorities for the next Farm Bill. The response has been outstanding so far, and we encourage you to share the link with your fellow wheat farmers. It can be accessed here or by going to NAWG’s website.
USDA’s National Agricultural Statistics Service (NASS) is also in the process of gathering responses from its County Agricultural Production Survey. Farm program payments through ARC and PLC are based on production data gathered through this confidential survey, and so it’s critically important that farmers who’ve received it in the mail respond to it. As was noted in NAWG’s e-newsletter last week, the results of these surveys will be available in aggregate form only, ensuring that no individual operation or producer can be identified.
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