Agenda AGENDA • National Office Roll Call • State Offices Roll Call • 2009 MAL and LDP General Policy • New Loan Repayment Rate Methods 2009 – 2012 MALs and LDPs General Policy for Grains, Oilseeds, Peanuts, Pulse Crops, Wool, Mohair and Honey Eligibility Requirements • Follow policy in 8-LP, paragraphs 100 – Producer, 126 – Commodities, 132 - Quantity • States, local governments, political subdivisions, and agencies thereof, are NO longer eligible to receive any MAL benefit or LDP payment Commodity Eligibility and MAL Rates (Orange indicates change from 2002 Farm Bill) 2009 Crop Year 2010 through 2012 Crop Crop Loan Rate Years Loan Rate Wheat $2.75/bu $2.94/bu Corn $1.95/bu $1.95/bu Grain Sorghum $1.95/bu $1.95/bu Barley/ Hulless Barley $1.85/bu $1.95/bu Oats/ Hulless Oats $1.33/bu $1.39/bu Long Grain Rice $6.50/cwt $6.50/cwt Medium Grain Rice $6.50/cwt $6.50/cwt Soybeans $5.00/bu $5.00/bu Commodity Eligibility and MAL Rates (Orange indicates change from 2002 Farm Bill) 2009 Crop Year 2010 through 2012 Crop Years Crop Loan Rate Loan Rate Other Oilseeds $9.30/cwt $10.09/cwt Dry Peas $5.40/cwt $5.40/cwt Lentils $11.28/cwt $11.28/cwt Small Chickpeas $7.43/cwt $7.43/cwt Large Chickpeas $11.28/lb $11.28/lb Graded Wool $1.00/lb $1.15/lb Nongraded Wool $0.40/lb $0.40/lb Mohair $4.20/lb $4.20/lb Honey $0.60/lb $0.69/lb Commodities Eligible Only for LDPs • Hay • Silage • Unshorn Pelts Removal of Quality Grades for Pulse Crops • 2008 Act removed authority of basing loan rates and repayment rates on “feed” and “Number 3” grade • Loan repayment rates will now reflect values of “food” and “Number 1” grade ACRE Program • Reduces applicable loan rates by 30 percent • Production from an ACRE-enrolled farm will have a 30 percent reduction in applicable loan rates • Applicable loan repayment option will NOT be adjusted with a 30 percent reduction • Wool, mohair, honey – NOT subject to ACRE provisions Adjusted Gross Income (AGI) • Person or legal entity with an average adjusted gross nonfarm income exceeding $500,000 is not eligible for MLGs and LDPs payments • Person or legal entity is eligible for a MAL, but must repay at principal plus interest, or a commodity certificate may be exchanged for the loan collateral (2009 crop only) • Refer to 4-PL Payment Limitations • CCC will NO longer limit MLGs and LDP payments • Refer to 4-PL Actively Engaged Determination • NOT required for producers requesting MALs and LDPs • Refer to 4-PL UGRSA Except for peanuts CCC will NO longer require UGRSAs in either: • Federally licensed, or • State licensed with an operating licensing program • CCC reserves the right to require UGRSA UGRSA • CCC may require UGRSAs in storage facilities that are neither: • Federally licensed, nor • State licensed with an operating licensing program • A future LP-Notice will provide specific policy Premiums and Discounts Except for peanuts • CCC will NO longer adjust loan rates for warehouse-stored loans at loan making • Software will be modified to allow data to be entered without grading factors and P&Ds Premiums and Discounts • A future PS-Notice will provide instructions on processing forfeitures to record grading factors and P&Ds • Milling factors for rice will be used to adjust the loan rate using a separate worksheet to calculate the applicable loan rate to be used • A future LP-Notice will provide specific policy before rice loan availability period Warehouse-Stored Loan Making Before disbursing a WS-MAL, except for peanuts • Discontinue applying P&Ds to the loan rate • Require in-handling charges on the receipt to be pre- paid or provided for • Discontinue applying storage deduction at loan- making if storage is NOT paid through loan maturity date • Only apply storage deductions if loan is forfeited Commodity Assessments CCC may NO longer charge any fees for the collection of commodity assessments. Lien Searches County Offices shall conduct lien searches on all commodities pledged as collateral for loan amounts greater than $50,000. Price Support Software Since April 6, County Offices can: • Process 2009 crop LDP payments using eLDP software • Disburse 2009 wool and mohair MALs through APSS • Not process LDPs through APSS Questions? New Loan Repayment Rate Methods for All Eligible MAL Commodities, Except Cotton, Peanuts and Rice Effective April 15, 2009 Loan Repayment of MALs At a repayment rate that is lesser of: 1. Loan rate plus interest; OR 2. A rate that: • is based on average market prices during a preceding 30-day period; and • will minimize discrepancies in marketing loan benefits across State and County boundaries; OR Loan Repayment of MALs 3. A rate that will minimize: • potential loan forfeitures • accumulation of stocks • storage costs • market impediments • discrepancies in marketing loan benefits across State and County boundaries Repayment of MALs Repaid at the lesser of: 1. Loan rate plus interest 2. 30-calendar day method 3. Alternative method a. 5-calendar day method b. Current method Repayment of MALs Important Reminders • Repayment rates are NOT crop year specific and will apply to all: • Outstanding 2008 crop MALs • 2009 MALs and LDPs • PCPs or PRPs for 2008 warehouse-stored MALs will have to be adjusted by any P&Ds applied at loan making to obtain the effective loan repayment rate 30-Calendar Day Method • Feed grains, soybeans, minor oilseeds • Will reflect a preceding 30-calendar day moving average of ALL terminal market prices for the crop, adjusted by • Subtract National Loan Rate (NLR) • Add County Loan Rate (CLR) 30-Calendar Day Method • Wheat • Will reflect a preceding 30-calendar day moving average of ALL terminal market prices for the specific class, adjusted by • Subtract National Average Loan Rate (NALR) by class • Add CLR 30-Calendar Day Method • Pulse crops (lentils, dry peas, small and large chickpeas) • Will reflect a preceding 30-calendar day moving average of market prices, adjusted by • Subtract NLR • Add applicable Regional Loan Rate (RLR) • No adjustment for small chickpeas 30-Calendar Day Method • Wool, mohair and honey • Will reflect a preceding 30-calendar day average of market prices Alternative 5-Calendar Day Method • Wheat, feed grains, soybeans, canola, flaxseed and sunflower seed • Will reflect a preceding 5-calendar day moving average of applicable terminal market prices for the crop, adjusted by • Subtract assigned county differential for applicable terminal markets • Subtract a 5-calendar day average of terminal market adjustments for applicable terminal market Alternative Current Method • Pulse crops, crambe, mustard seed, rapeseed, safflower, sesame seed, wool and mohair • CCC will determine alternative repayment rate using current methodology • Honey – will have NO alternative loan repayment rate Loan Repayment Publication Frequency • Daily, except on weekends – wheat , feed grains, soybeans, canola, flaxseed and sunflower seed • Weekly, except on weekends – pulse crops, crambe, mustard seed, rapeseed, safflower, sesame seed, wool and mohair • Monthly, except on weekends – honey Exhibits • Corn loan repayment option example • PCP postings based on previous days • New pulse crop loan repayment spread sheet • New wool and mohair loan repayment spread sheet Questions?