Changes Coming in Marketing Assistance Loans

USDA will begin using, what Secretary of Agriculture Tom Vilsack calls, an improved and more stable system for determining non-recourse marketing assistance loan repayment rates and loan deficiency payment rates for wheat, feed grains, pulse crops, oilseeds, wool, mohair and honey. The Secretary says, - the new method will moderate fluctuations of the loan repayment rate.

Beginning April 15th for wheat, corn, grain sorghum, soybeans, barley, oats, canola, flaxseed and sunflower seed, USDA's Commodity Credit Corporation will publish daily loan repayment rates based on the average market prices during the preceding 30 days. At the same time, CCC will announce a repayment rate based on the preceding five days. The effective repayment rate will be the lower of the two numbers. The current method is based on the previous day's market rates.

And starting on or after April 15, for pulse crops such as lentils, dry peas, small chickpeas – and starting with the 2009-crop year, large chickpeas, and crambe, mustard seed, rapeseed, safflower, sesame seed, wool, mohair and honey, CCC will determine and publish loan repayment rates once a week based on average market prices during the preceding 30 days. CCC will also announce a repayment rate using current methodology each week. The effective repayment rate will be the lower of the two numbers.