Farming this year has presented many challenges to our hard working and dedicated farmers. I know that one of the big challenges this fall is making ends meet and cash flowing your farm business needs.
USDA may be able to help you obtain some quick cash if you own some harvested grain that is stored (either at your farm or in a grain warehouse) and you don’t intend to market it for awhile. What I’m referring to are called Marketing Assistance Loans, and they are relatively quick and easy to obtain from your local FSA office. These loans mature in nine months time — so we don’t tie up your bins from one crop year to the next. They do require repayment of principal and interest, but the interest rate for a November loan is only 1.375 percent.
When you come in to apply for a loan, we will ask you if you would like an FSA representative to come to your farm to measure the grain or if you would like to “certify” the quantity in the bin. Our field reporters are trained to perform bin and crib measurements for a very reasonable fee. This is the safest way to accurately determine your stored bushels.
Then, after the measurement service is performed, you come back to the office to complete your note. USDA does file a lien against the grain being pledged as collateral for the loan, so a UCC-1 is filed with the Secretary of State. If there are prior liens against your grain, they will have to be dealt with before the USDA loan can be disbursed. Then, after signing your note, your money will be electronically deposited in your account within a few business days.
Now, let’s look ahead. Say it is February or March and you’ve decided to go ahead and market your grain, but you don’t have money in the old checking account to repay your loan at USDA. We have a way to deal with this cash flow issue, too! All you have to do is inform your FSA office what elevator you’ve chosen to market the grain to — before moving it, of course!
This can be started with a phone call to your FSA office, but a form is required to be signed requesting this “marketing authorization” prior to loading or moving any grain out of your bin. We forward a copy of the signed marketing authorization form to the elevator you will deliver to so they are notified that USDA has a lien against the grain to be delivered and that they need to write a check directly to USDA out of the sale proceeds.
If there are remaining proceeds, that portion gets mailed directly to you. It may sound complicated, but grain elevators are very familiar with this process and it flows smoothly.
Other terms and conditions apply to marketing assistance loans, so call your local FSA office for additional information and for the corn and soybean loan rate. Maybe this USDA program can help you cash flow by using your stored grain as collateral for some quick cash. Check it out!
Additional information can also be obtained by navigating to www.fsa.usda.gov and then selecting the subject “Price Support” from the left menu.
That’s all for now,