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USDA announces loan rates for grains and oilseeds, first in new farm bill

The ink isn’t dry on the final version of the 2008 farm bill (President Bush was expected to veto the full bill passed by the Senate (June 4) within a few days, and the House and Senate were expected to vote to override once again.)

But USDA has announced its first action implementing the new legislation only three weeks after the House and Senate overrode the first Bush veto of the farm bill minus the trade title that was inadvertently left out of the bill sent to the president.

“We know we can rely on America’s farmers and ranchers to grow our food, and they can rely on USDA to have the new farm bill ready,” said Agriculture Secretary Ed Schafer who unveiled the new marketing assistance loan and loan deficiency payment provisions of the law.

Those include the county loan rates for 2008 crop of wheat, corn, grain sorghum, barley, oats, soybeans, and other oilseeds, state loan rates by class for 2008 crop of rice, and regional loan rates for 2008 pulse crops. They were posted on the Farm Service Agency (FSA) Web site

On June 5, Rep. Jo Ann Emerson, R-Mo., asked Schafer to expedite the establishment of the loan rates for wheat because of an extraordinarily weak basis for soft red winter wheat at elevators throughout the Mid-South and Southeast.

Farmers have been reporting price quotes at elevators of as much as $2.80 per bushel off nearby Chicago wheat futures. The basis – the difference between futures and cash prices – normally widens at harvest but not at the levels seen in the Southern United States in recent days.

Shortly after the House and Senate overrode the first farm bill veto, Mark Keenum, undersecretary of agriculture for farm and foreign agricultural services, told members of the Delta Council’s Agribusiness Roundtable that USDA would work to implement the new farm bill as quickly as possible. “As far as we’re concerned, the commodity title of the farm bill is now the law of the land, and we will begin implementing the law immediately,” he said in a telephone conference call with the group on May 23.

With enactment of the new farm bill, the Food, Conservation and Energy Act of 2008, national loan rates for the 2008 crops of wheat, feed grains, oilseeds, rice, and pulses will be as follows:

Wheat, $2.75 per bushel; corn, $1.95 per bushel; grain sorghum, $1.95 per bushel; barley, 1.85 per bushel; oats, $1.33 per bushel; soybeans, $5.00 per bushel; other oilseeds, $9.30 per hundredweight for each “other” oilseed; rice, long grain, $6.50 per hundredweight; rice, medium grain, $6.50 per hundredweight; small chickpeas, $7.43 per hundredweight; dry peas, $6.22 per hundredweight; lentils, $11.72 per hundredweight. (Other oilseeds include: sunflower seed, flaxseed, canola, rapeseed, safflower, mustard seed, crambe, and sesame seed.)

Under the 2008 farm bill, these national loan rates are established at the same levels as those established for the 2007 crop, with the exception of rice. Starting with the 2008 crop, the 2008 farm bill specifies national loan rates for both long grain rice and medium grain rice.

For rice stored in commercial warehouses, the whole kernel milled rice loan rates for the 2008 crop are $10.00 per hundredweight for long grain and $9.78 for medium/short grain. The broken kernel loan rate for all classes is $6.67 per hundredweight. National average rough rice loan rates by class are $6.50 per hundredweight for long grain and $6.50 for medium/short grain.

USDA computes milled and rough rice loan rates by class using average milling yields and production percentages to ensure that the production-weighted national average rough rice loan rate equals the $6.50 per hundredweight national loan rate.

The 2008 crop West Region dry pea loan rate is $6.58 per hundredweight; the East Region dry pea loan rate is $6.14 per hundredweight. The West Region lentil loan rate is $14.23 per hundredweight; the East Region lentil loan rate is $10.74 per hundredweight. These rates average to the national rate based on recent regional production shares.

The West Region includes the Palouse (Idaho, Oregon and Washington) and other states west of the Rocky Mountains (Alaska, Arizona, California, Hawaii, Nevada, New Mexico and Utah). The East Region includes Montana, North Dakota and all other states not in the West Region.

USDA determined that insufficient reliable market information is available to establish regional loan rates for small chickpeas. Therefore, the national rate of $7.43 per hundredweight applies for all producing regions. Under provisions of the new 2008 farm bill, producers of large chickpeas will not be eligible for marketing assistance loans until the 2009 crop year.

USDA said cotton and peanut loan and LDP provisions and rates will be announced separately.

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