February 26, 2003
USDA has announced 2003-crop corn, grain sorghum and soybean county loan rates; 2003-crop dry pea, lentil and small chickpea loan program provisions, including regional loan rates for dry peas; 2002- and 2003-crop crambe and sesame loan rates; and revised 2003-crop canola, flaxseed, mustard seed, rapeseed and safflower county loan rates.
The 2003-crop loan rates for wheat, barley, oats and other oilseeds were announced on Dec. 13. This announcement revises the loan rates for canola, flaxseed, mustard seed, rapeseed and safflower as specified in the Consolidated Appropriations Resolution, 2003, but does not affect the loan rates for wheat, barley, and oats.
USDA said national loan rates were restructured by the 2002 farm law, requiring changes in county loans rates. The conference report accompanying the 2002 law also provided guidance suggesting that USDA use the generally upward change in national loan rates to revise county loan rates.
Because county loan rates had not been adjusted to reflect changing grain market conditions for over 10 years, numerous disparities between loan rates and market prices had emerged, affecting producer benefits. Almost immediately upon enactment of the 2002 law, USDA announced the most comprehensive adjustments in more than 15 years to the county loan rate structure for 2002 crops. The new rates were intended to reflect market factors affecting each crop to the fullest extent possible and thus avoid distortions that work to the detriment of producers and the industry.
The 2003-crop county loan rate determinations are in keeping with this market-oriented approach. The relative levels of the 2003-crop county loan rates for each commodity reflect the most recent information available about price relationships around the country. The 2003-crop rates will enhance the market orientation of the loan and loan deficiency payment (LDP) programs.
USDA said despite the reduction in significant market distortions following last year's county loan rate announcement, notable cross-border differences in some rates remained. For corn, the situation was particularly notable along the Minnesota-Iowa border. The announcement of the 2003-crop county loan rates is in response to producers' concerns regarding these differences and reflects the most recent information on cross-border differences in market price relationships. While some cross-border differences will continue because of certain market conditions, today's actions will reduce and, in some instances, eliminate many of the unwarranted differences.
In establishing this year's rates, the department said it paid special attention to reducing notable loan rate differences among neighboring counties that are not the result of current market forces. These updated county loan rates reflect changes that have occurred in cropping and marketing patterns over the years and should be highly beneficial to most farmers.
The national loan rates announced are:
Within four business days of this announcement, which was made Tuesday, the county loan rates for these commodities will be available on USDA Farm Service Agency's Web site at: http://www.fsa.usda.gov/dafp/psd/.
Corn $1.98 per bushel
Sorghum $1.98 per bushel
Soybeans $5.00 per bushel
Sunflower Seed $0.096 per pound
Rapeseed $0.096 per pound
Canola $0.096 per pound
Safflower $0.096 per pound
Flaxseed $0.096 per pound
Mustard Seed $0.096 per pound
Sesame Seed $0.096 per pound
Crambe $0.096 per pound
Dry Peas $6.33 per hundredweight
Lentils $11.94 per hundredweight
Small Chickpeas $7.56 per hundredweight