Attention Montana Wheat Producers: Loan Deficiency Payments

With wheat prices falling at a range where LDPs may be applicable, producers should become familiar with the process to access this assistance. The 2014 Farm Bill authorized 2014-2018 crop year Marketing Assistance Loans (MALs) and Loan Deficiency Payments (LDPs).

MALs and LDPs provide financing and marketing assistance for wheat, feed grains, soybeans, and other oilseeds, pulse crops, rice, peanuts, cotton, wool and honey. MALs provide producers interim financing after harvest to help them meet cash flow needs without having to sell their commodities when market prices are typically at harvest-time lows. A producer who is eligible to obtain a loan, but agrees to forgo the loan, may obtain an LDP if such a payment is available.

Before MAL repayments with a market loan gain or LDP disbursements can be made, producers must meet the requirements of actively engaged in farming, cash rent tenant and member contribution. To be eligible for an MAL or an LDP, producers must have a beneficial interest in the commodity, in addition to other requirements. A producer retains beneficial interest when control of and title to the commodity is maintained. For an LDP, the producer must retain beneficial interest in the commodity from the time of planting through the date the producer filed Form CCC-633EZ (page 1) in the FSA County Office. If form CCC-633EZ is filed before loss of beneficial interest, the producer may obtain the LDP rate in effect on the date beneficial interest is lost. For more information, producers should contact their local FSA county office or view the LDP Fact Sheet at http://www.fsa.usda.gov/news-room/fact-sheets/index.

Daily status of LDP payment rates in Montana can be found at http://www.fsa.usda.gov/mt or by clicking the following link: http://www.fsa.usda.gov/FSA/ldppcpStateInfo?mystate=mt&area=home&subject=dalp&topic=landing

To be considered eligible for an LDP, producers must have form CCC-633EZ, Page 1 on file at their local FSA Office before losing beneficial interest in the crop. Pages 2, 3 or 4 of the form must be submitted when payment is requested.

The 2014 Farm Bill also establishes payment limitations per individual or entity not to exceed $125,000 annually on certain commodities for the following program benefits: price loss coverage payments, agri-culture risk coverage payments, marketing loan gains (MLGs) and LDPs. These payment limitations do not apply to MAL loan disbursements or redemptions using commodity certificate exchange.

Adjusted Gross Income (AGI) provisions were modified by the 2014 Farm Bill, which states that a pro-ducer whose total applicable three-year average AGI exceeds $900,000 is not eligible to receive an MLG or LDP.

For more information, contact the local FSA office at (406) 654 - 1333, ext. 2 or at 1120 US Hwy 191 South Suite 2, Malta, MT 59538.