USDA Announces 2005 Loan Rates

The USDA recently announced the 2005 national and county loan rates for wheat, barley, oats and other oilseeds. 

The 2002 Farm Bill established specific national loan rates for each commodity, with one level set for the 2002 and 2003 crops and somewhat lower levels for the 2004-2007 crops, as shown in the following table.

Wheat by Class Rates and Differentiation for Durum Loan Rates
The 2005 county loan rates for wheat have been updated and remain differentiated by each of the five major classes of wheat (durum, hard red spring, hard red winter, soft red winter and soft white), continuing the precedent established with the 2002 rates.

Varying supplies and changing demand patterns of these different wheat classes produce widely variable market prices. By moving to the class-based system for wheat, the Commodity Credit Corporation (CCC) now provides marketing assistance loans and LDPs reflecting market prices for each class, thus achieving a more equitable distribution of commodity program benefits among producers.

Loan rate premiums will again be available for all durum wheat that grades as amber durum or hard amber durum. This policy was established in 2003 to further improve the market orientation of the wheat loan program.   The 2005 per-bushel premiums applied to the base level of the durum county loan rate will continue at 2004-crop levels: Amber durum $0.20; Hard amber durum $0.30.

Barley, Oats, and Other Oilseed Loan Rates Updated
The CCC has updated the county loan rates for barley, oats and other oilseeds to reflect recent market price relationships among counties.  This continues the policy initiated with the 2002 crop to increase the market orientation of the loan and LDP program by making county loan rates for these crops reflect recent county-to-county market price relationships.  In establishing this year’s rates, the CCC continued to give special attention to reducing loan rate differences among neighboring counties that were not justified by current market forces.

The 2005-crop loan rates for corn, grain sorghum, soybeans and pulses will be announced early next year.  The 2005-crop county loan rates for wheat, barley, oats and other oilseeds is available on the Farm Service Agency Web site at www.fsa.usda.gov/dafp/psd/LoanRate.htm .

	Commodity Crop Year
	2002-2003	2004-2007
Wheat ($/Bu)	$2.80	$2.75
Barley $/Bu)	$1.88	$1.85
Oats ($/Bu)	$1.35	$1.33
Each “Other Oilseed” (Cwt)	$9.60	$9.30