December 20, 2000

The American Soybean Association says the USDA decision to set the 2001 soybean loan rate at the maximum $5.26 per bushel means nearly $1 billion for soybean producers. ASA believes farmers would have lost $960 million had the loan rate been decreased 34 cents per bushel.

ASA officials said they had worked for five months urging Agriculture Secretary Dan Glickman to maintain the rate at $5.26 to help farmer survive a "continuing cycle" of low commodity prices. "This decision will have a positive impact on thousands of soybean producers, and there will be a beneficial economic effect that is felt throughout rural America," said ASA President Tony Anderson, Mount Sterling, OH.

Based on projections by USDA for 2001 soybean production at 2.8 billion bushels, the lower rate "would have devastated soybean producer income," Anderson said. "With only limited support provided under other programs, a 34-cent drop would shred the income safety net the loan program currently provides to U.S. soybean farmers."

The soybean loan rate formula under the 1996 farm law allowed for the lower loan rate for the 2001 crop. The formula uses a five-year "Olympic" average price which disregards the highest and lowest years. The floor is set at $4.92 and the limit is $5.26. The higher rate has been in effect for crop years from 1997 through 2001.