Marketing assistance loans provide low-cost option

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Hello friends,

With harvest hopefully winding down for most of us, it is time begin putting the final plans into motion for actions over the winter months.Whether it is marketing grain, feeding livestock, milking cows or buying fertilizer and seed for next year, it is always good to have a plan.

If your household is like mine, any plan that is put into action is going to need funded.And funding can be a challenge for those who need to sell livestock or grain to make new purchases. Markets are not always at their peak when revenue is needed.

A choice needs to be made to sell commodities at a less than maximum price or generate revenue from another source. FSA Marketing Assistance Loans provide an option for grain producers to generate income while still maintaining their grain on farm to sell or feed at a later date.

This program provides low-interest loans to producers of corn, soybeans and other program commodities.

The interest rate for loans approved in November is 1.125 percent. These loans have terms as long as nine months.

Bushels marketed

If you choose to sell or feed a portion of your loan grain during this time, you only need to repay the bushels marketed. The reminder can stay under loan.

Marketing Assistance Loans are available on both farm-stored grain and on warehouse stored commodities as well.

Producers opting for a warehouse-stored loan should be aware of the requirement to maintain beneficial interest in the commodity even after delivery.

This is normally accomplished by requesting a warehouse receipt at the time of delivery. The amount of bushels put under loan depends on the amount of income an applicant needs to generate. Loan rates vary by county.

Most corn loan rates are in the $1.90 to $2 per bushel range, while soybean rates range from $5 to $5.20 per bushel.

Loan amounts are based upon the number of bushels put under loan, times the applicable loan rate for your county.

Reduction percentage

For Crop Year 2013 loans, a sequester reduction percentage of 5.1 percent will be applied to the loan amount, so this means it will take more bushels to get to your target loan dollars.

Applicants will only pay back the principal amount plus interest, and not the sequestered percentage. Contact your local FSA office for more information on this program and for your local loan rates.

That’s all for now,

FSA Andy

About the Author

FSA Andy is written by USDA Farm Service Agency county executive directors in northeastern Ohio. More Stories by FSA Andy

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