Marion County FSA Director
With the onset of the wheat harvest season, there may be some producers who wish to explore options for obtaining low cost financing needed to pay upcoming expenses. Commodity Credit Corp. (CCC) administers commodity loan program, which is an option that producers may want to seriously consider in their financing plans.
This program is a nine-month term loan disbursed to eligible producers for grain quantities that are harvested and stored on the farm or in warehouse elevators. Those producers interested in a farm-stored type loan must agree to comply with specific Kansas farm loan policies. The quality of farm-stored crop loans must be maintained during the entire term of the loan as the producer is held responsible for any value losses due to quality reasons. Producers applying for elevator-stored loans can only receive assistance on those quantities secured by a warehouse receipt.
The 2009 base loan rates for crops in Marion County are wheat, $2.69 per bushel; barley $1.75; oats $1.37; corn $2.04; gr. Sorghum $3.39/cwt; and soybeans $4.92.
Since these loans are nonrecourse or market assistance loans, producers have the option of delivering or forfeiting to CCC crops that were pledged as collateral at loan maturity in satisfaction of the indebtedness.
Producers with loan intentions should carefully analyze the Posted County Price (PCP), which is the government’s daily market price assumption during the course of their loan term because when a PCP goes below a county loan rate, producers can repay the loan at PCP rates, instead of the higher original loan rate, and have all interest charges incurred up to that time waived. The other option available to producers is to settle loans by loan principal cash repayment plus interest expense.
Since wheat and feed grain crops are considered contract crops in order to qualify for CCC loan, they must be produced on farms under a current Direct & Counter-Cyclical Program (DCP). Producers must also assure that they are holding “beneficial interest” or controlling title to their loan collateral.
For further details about marketing loans, producers should contact the Marion County FSA Office, 301 Eisenhower Drive, Marion, at (620) 382-3714.