E-Malt.com News article: USA: USDA has announced the 2006 crop county loan rates for barley

USDA has announced the 2006 crop county loan rates for barley, canola, crambe, flaxseed, mustard, oats, rapeseed, safflower, sunflowers, durum, Hard Red Spring wheat, Hard Red Winter and Soft White wheat. The rates are available at the local county FSA offices and on the Montana FSA website at: http://www.fsa.usda.gov/mt

All county loan rates are based on the national rates that are established by statute. The formula used by USDA to establish county loan rates factors in commodity price and production data.

Nationally, the 2006 Hard Red Spring wheat loan rates are lower than the 2005 loan rates. The Posted County Price (PCP) is part of the formula for determining the rates. The 2002 and 2003 PCP were used for the 2005 loan rate; the 2003 and 2004 PCP were used for the 2006 loan rates. Posted county prices for Hard Red Spring wheat were relatively high in 2002. Since that time, the Hard Red Spring wheat market has weakened. Consequently, the relatively high Hard Red Spring wheat PCP's observed in 2002 dropped out of the 2006-crop calculations, and other classes' relative prices strengthened. Therefore, 2006-crop Hard Red Spring wheat loan rates declined from their 2005-crop levels. The result was a $.20-.23 reduction in the Montana 2006 Hard Red Spring wheat loan rates from the 2005 loan rates.

The production-weighted average of all the county wheat loan rates must “weight” back to the statutory national wheat loan rate of $2.75 per bushel. Changes in geographic and class-based price relationships from year to year affect relative loan rate levels among counties and among classes. USDA's objective is to have county loan rates track geographic and class-based price relationships to, as best as is practicable, arrive at a market-oriented set of county loan rates.

For more information on programs administered by the USDA Farm Service Agency, visit your local USDA service center or logon to the Montana FSA website at: http://www.fsa.usda.gov/mt


03 February, 2006