Wheat prices May Trigger LDP Payments


Thanks to Whitney Klasna, president of the Montana Women Involved in Farm Economics, (WIFE) for bringing this to our attention.

Attention producers! Be sure to file a Commodity Credit Corporation CCC-633EZ form with your local FSA as soon as possible. Current wheat prices are now only a few cents away from triggering a Loan Deficiency Payment (LDP) in Montana and much of the West.  

LDPs are direct payments made in lieu of a marketing assistance loan when the Commodity Credit Corporation determined value, which is based on the current local price in a county, is below the applicable county loan rate.  According to UNL Cropwatch, “The marketing loan program provides underlying income support tied to a national average loan rate for program commodities. In the case of wheat, that loan rate is $2.94/bushel nationally, adjusted for class and county across the country. The loan rate was far below the market and largely out of mind as the 2014 Farm Bill was being debated and developed, but is now, unfortunately, very relevant given current price levels and projections going foward. “

The payment is the difference between the two rates, times the eligible quantity. For a commodity to be eligible for a LDP, the producers must have beneficial interest in the commodity, in addition to other eligibility requirements.


Its suggested that everyone file the form because the commodity markets are so volatile. Nebraska has already triggered the program for HRW. In Montana, the LDP has not been utilized since the early 2000's. loan deficiency payment triggers when the price of wheat, or other commodity, falls below the loan rate.

Producers can submit page 1 of the 633-EZ form even after an LDP has triggered as long as they have not lost beneficial interest in the commodity.  They would need to complete page 2 of the CCC-633-EZ prior to losing beneficial interest and on the date the producer requests the LDP rate for that day.


© Northern Ag Network 2016


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