Wisconsin Ag Connection - Lack of Storage Triggers Distress Loans for Crops

Wisconsin Ag News Headlines

Lack of Storage Triggers Distress Loans for Crops
Wisconsin Ag Connection - 09/27/2007

Due to the anticipated large 2007 crops being harvested this fall, it appears that adequate acceptable storage may be a problem this year for many farmers. For this reason, the Wisconsin Farm Service Agency's State Committee has approved distress loans for Wisconsin farmers on 2007 corn and soybean crops.

"Based on this approval farmers having trouble finding adequate acceptable storage for their 2007 corn and soybean crops can obtain short term commodity loans at local Farm Service Agency offices on grain stored on the ground or in temporary structures," says State FSA Director Ben Brancel.

Distress loans have a three-month term and are only authorized when there is a shortage of storage at harvest time on the farm or in local warehouses. Distress loans mature on demand, but no later than 90 calendar days after the date the loan is disbursed. These loans must be repaid at principal, plus interest.

Distress loan requests must be made and loan documents signed by the later of October 25 or 30 days after the completion of harvest of the commodity to be put under loan.

"Farmers have the option to move the commodity into eligible storage and re-pledge for a regular nine-month marketing assistance loan," said Brancel.

Producers who obtain a non-recourse marketing assistance loan on 2007 corn or soybean crops can then take advantage of market gain benefits available if the Posted County Price (PCP) falls below the loan rate. Producers interested in obtaining a loan should contact their local County FSA office for more information about options available under the commodity marketing assistance loan program.