USDA Update

By Rod Johnson

October 8, 2004

The final calculated Counter-cyclical payment for 2003 crops of corn, grain sorghum and soybeans is zero since the effective price for the marketing year exceeded the target price for each crop. Producers who received an advance payment will have the payment withheld from 2004 final direct payments. Very few producers took advances of 2003 Counter-cyclical payments. We are currently making final 2004 DCP payments and will begin issuing CRP payments next week.

The USDA Service Center office will be closed Monday, October 11, in honor of the national Columbus Day Holiday. October 11 is also celebrated as Native Americans Day. The LDP rates for Friday, October 8, will remain in effect until 6:00 am, Tuesday, October 12.

LDP’s (Loan Deficiency Payments) are quite substantial for both corn and grain sorghum as we enter harvest. You need to make sure you protect your eligibility for LDP by completing either a CCC-709 or CCC-633 at the FSA Office. Grain must be mechanically harvested to be eligible for LDP. Grazing of a corn or grain sorghum crop is not eligible for LDP. If a crop is harvested for forage, the County Committee will need to establish the yield to use for LDP using various types of information that may be available. Grain sorghum varieties are somewhat complicated as to their eligibility for LDP. Grain sorghums varieties are divided into various groups depending on the variety planted and in some cases, if a pollinator seed is planted with some of the dual purpose varieties. (FSA Notice LP-1955, with details on how grain sorghum varieties are treated for LDP, is posted on the Kiowa County FSA Web Site: http://www.fsa.usda.gov/co/County%20Webs/Kiowa_county.htm). The important thing is to check with the FSA Office BEFORE you loose beneficial interest in the crop. The FSA Office may need to make a field inspection on some dual purpose varieties BEFORE harvest to verify grain potential. A good question to ask yourself is; "Can I obtain a warehouse receipt on the grain I haul to a buyer?" If the answer to this question is no then you probably will lose beneficial interest as soon as the grain crosses the scales.

A CCC-709 is signed by the producer BEFORE harvest of the crop. This form, if signed BEFORE harvest, will lock in the LDP rate for the date you deliver grain to the elevator. The CCC-709 gives you 5 options: 1) Identify a specific quantity of grain from one or more farms (for example first 5000 bushels), 2) All production off of one or more farms, 3) All quantity delivered to a specific location, 4) All quantities delivered for immediate sale (any quantity delivered for storage must be covered by a CCC-633 before loss of beneficial interest, 5) Other type of arrangement. CCC-709’s do not apply to farm stored grain.

A CCC-633 is the LDP request form that is used the date you want to obtain an LDP. You can elect to obtain your LDP on any date before you lose beneficial interest in the crop. You can obtain your LDP and still keep your grain in open storage without selling it.

When you obtain an LDP, we will ask you if there is a verbal or written contract for the grain. If there is a contract on the grain, we will ask you to provided details of the contract so we can determine if you still have beneficial interest in the grain. To have beneficial interest in the grain you must retain control, risk of loss and title. To be eligible for LDP, grain may not be substituted, purchased, bartered or received as a gift.

If you retain beneficial interest in the grain, you may request an LDP for 2004 crops of barley, canola, crambe, flaxseed, honey, oats, rapeseed, wheat, and sesame seed until March 31, 2005. LDP’s are available for other crops including corn, grain sorghum, sunflowers, and soybeans until May 31, 2005. These dates also apply to loan availability for these crops.

LDP RESOURCES

Information on LDP’s and other FSA programs is available on the USDA/FSA web site at:

http://www.fsa.usda.gov/pas/default.asp which includes information on the new E-Gov filing for LDP’s. If you click on "Price Support" in the left column, you will find a web page where you can access the current LDP rates for any county in the nation. From the FSA web site, you can obtain electronic program forms such as the CCC-633 or CCC-709 forms used for LDP’s. These can be completed and FAXed to the FSA Office if you have an authorization form on file at the FSA Office to allow us to accept your FAX signature. This method can be used before you sign up for E-LDP.

The interest rate for crop loans disbursed in October will have an initial interest rate of 3.00%. Farm stored Facility loans approved in October is 4.625%.