Declining Wheat Prices & Loan Deficiency Payments
The Logan County Farm Service Agency, County Executive Director, Sherry Lederhos, would like to notify agriculture producers of the availability of Loan Deficiency Payments (LDP’s) due to the declining wheat prices.
“Loan Deficiency Payments (LDP) are a marketing tool available to producers beginning upon harvest” said Lederhos. “The LDP helps agricultural producers to meet cash flow needs without having to sell their commodities when market prices are typically at harvest-time lows, allowing the producer to delay the sale of the commodity until more favorable market conditions emerge.”
The Agricultural Act of 2014 (2014 Farm Bill) authorizes loan deficiency payments (LDPs) for wheat, corn, grain sorghum, barley, oats, soybeans, other oilseeds (including sunflower seed, rapeseed, canola, safflower, flaxseed), nongraded wool, mohair, and unshorn pelts.
Eligible producers may obtain an LDP under certain market conditions. The LDP rate equals the amount by which the applicable loan rate where the commodity is stored exceeds the effective Marketing Assistance Loan (MAL) repayment rate for the respective commodity. The LDP amount equals the LDP rate times the quantity of the commodity for which the LDP is requested.
- To be eligible for a LDP, the producer must:
- Comply with conservation and wetland protection requirements;
- Submit an acreage report to account for all cropland on all farms;
- Have and retain beneficial interest in the commodity
- Meet adjusted gross income limitations
A producer retains beneficial interest in the commodity if both of the following remain with
- Control of the commodity. The producer retains the ability to make all decisions
affecting the commodity, including movement, sale and the request for a LDP.
- Title to the commodity. The producer has not sold, or has not delivered, the commodity or
warehouse receipt to the buyer. If delivered, title may be considered to be transferred before the
producer receives payment for the commodity.
Once beneficial interest in the commodity is lost, the commodity loses eligibility for an LDP and remains ineligible even if the producer later regains beneficial interest.
Producers must submitted the following completed and signed forms to their administrative County Office(s), prior to losing beneficial interest in the commodity:
- CCC-633EZ, Page 1, Loan Deficiency Payment (LDP) Agreement and Request
- CCC-633EZ, Page 2, Request for LDP
Along with the required forms listed above, the producer also needs to provide the following:
- Warehouse Stored Commodities
- Delivery sheets showing open storage
- Scale tickets
- Settlement Sheets, if producers have signed the CCC-633EZ, page 1, prior to selling the crop
- Farm Stored
- Certified bushels in bin
- Request FSA measurement service
- Contracted White Wheat – provide county office with copy of contract
SUBMITTING LDP Request
Request must be submitted by one of the following:
- in person
- by email
- by mail
- by fax
Daily LDP rates can be found on the following:
For more information, please contact the Logan County FSA Office.
Submitted to BARN Media by:
County Executive Director
Logan County FSA Office