By Tracy Sayler

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Prairie Grains is the official publication of
the Minnesota
Association of
Wheat Growers,
North Dakota Grain Growers Association,
South Dakota Wheat, Inc., and the Minnesota Barley Growers Association.

A quick refresher course: A producer has the option of foregoing a CCC loan on harvested grain and instead receive an LDP, available when the posted county price (PCP) in your county falls lower than the county loan rate. For example, if your county loan rate for spring wheat is $2.74 per bushel and the PCP on a particular day is $2.66, you can opt to receive an LDP of eight cents per bushel. It’s a cash payment that does not have to be repaid, and premiums and discounts do not apply.

There are caveats with the LDP: A producer cannot receive a loan and take an LDP on the same bushels. Further, the producer must own or retain beneficial interest in the commodity from the time of harvest through the date the LDP is requested.

Some producers forgot about this rule when LDPs were triggered late this winter. They were ineligible to receive an LDP, since they applied for it after they sold their grain.

"To remain eligible for loan deficiency payments, beneficial interest must be retained until after a loan deficiency application is filed.  Beneficial interest includes: title to the commodity, risk of loss and control of the commodity.  Too many producers are selling eligible commodities prior to making application for loan deficiency payment.  I encourage producers who still have eligible commodities in their control to contact their local Farm Service Agency staff before selling the commodity," says Linda Hennen, with the Minnesota Farm Service Agency Office, St. Paul.

You better hurry if you want to take out an LDP or loan on wheat, barley, oats, canola, rapeseed, or flax harvested in 1998: the final availability date for these crops is March 31. The final availability date for corn, grain sorghum, mustard, safflower, soybeans, and sunflower is May 31.

Before entering into production contracts for the 1999 growing season, you may wish to visit with your local FSA office, as some contracts may affect beneficial interest of the new crop. Each contract is different: Some allow the farmer to keep the grain in open storage, others result in the loss of title to the grain as soon as the first bushel is harvested.