ASA Urges USDA to Keep the Loan Rate at $5.26

December 22, 1999

The American Soybean Association wants USDA to maintain the crop year 2000 national average soybean loan rate at $5.26 per bushel to provide an "adequate safety net" for farmers. Agriculture Secretary Dan Glickman is not required to reduce the rate from the present level.

Based on the soybean loan rate formula under the farm law, the loan rate could be set at $5.13 per bushel for the 2000 crop. The formula uses a five-year "Olympic" average price that disregards the highest and lowest years. The floor is at $4.92 and the limit is $5.26, the prevailing rate for crop years 1997-99.

"ASA has repeatedly urged both Congress and the administration to act on a number of commitments made to farmers when the (law) was passed that would enhance prices and improve profitability for growers," said Marc Curtis, ASA president. "Inasmuch as those commitments have not been fulfilled, soybean producers will continue to depend heavily on the income safety net provided by the marketing loan assistance program in the 2000-01 marketing year."

Supplies of soybeans, soybean oil and soybean meal remain large and should increase even more next year, says ASA. Carryover stocks of soybeans next September are projected by USDA to total 395 million bushels; supplies of soybean oil should be 2.1 billion pounds. Average soybean prices received by farmers are expected to decline from $4.70 per bushel this year to $4.25 for the 2000 crop.