WASHINGTON, July 20, 2016 - Just in case.

That’s the philosophy many local USDA Farm Service Agency offices are taking with wheat producers and paperwork for Loan Deficiency Payments.

South Dakota State FSA Executive Director Craig Schaunaman told Agri-Pulse that reports of paperwork being distributed to producers are a little overblown, but he said LDPs are being discussed with wheat growers in the state. He said that if a producer is in the local FSA office for another reason, FSA employees might have them fill out the form to kick-start their participation in the program, but the documents aren’t being shipped out.

The program provides funding for harvest-time drops in prices to allow producers to store and market their grain. According to an FSA fact sheet, the program covers wheat, corn, grain sorghum, barley, oats, upland cotton, extra-long staple cotton, long grain rice, medium grain rice, soybeans, other oilseeds (including sunflower seed, rapeseed, canola, safflower, flaxseed, mustard seed, crambe and sesame seed), dry peas, lentils, small chickpeas, large chickpeas, graded and nongraded wool, mohair, unshorn pelts, honey and peanuts. Currently, hard red winter wheat is the commodity closest to support thresholds.

The program is triggered on a county-by-county basis when commodity prices dip to certain levels. It’s been in existence for some time, but hasn’t been used in several years, the National Association of Wheat Growers said in their Weekly Update last week. NAWG is encouraging its members to fill out the paperwork to establish the “beneficial interest” needed to receive LDPs.

In the last year, hard red winter wheat prices have plummeted. The September 2016 Kansas City HRW contract has lost more than $2 per bushel in value since June 2015, sinking to about $4.14 on Tuesday. While there can be a difference between trading prices and what a producer can receive at the elevator, the Posted County Price that would trigger LDPs for Ford County Kansas, which typically grows about 179,000 acres of wheat every year, currently sits at $4.39.


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