MEDIA RELEASE
July 30, 2003
Written By Kent Thiesse, U of M Extension Service
(507-389-8141)
2003 County Loan Rates For Corn Increased
USDA has announced County commodity loan rates for corn, soybeans, wheat, and other eligible commodities for the 2003 crop year. The 2003 loan rates for corn were increased by $.03 per bushel in all Minnesota counties compared to 2002 loan rates, while soybean loan rates remained the same as 2002, according to Kent Thiesse, University of Minnesota Extension Service.
Thiesse indicated that one of the big discussions surrounding the 2002 loan rates centered on the difference in corn loan rates, especially for Minnesota counties near the Iowa border compared to the neighboring counties in Iowa. The $.05-$.08 per bushel difference that existed last year between Southern Minnesota and Northern Iowa corn loan rates has been somewhat corrected for 2003. As mentioned earlier, Minnesota corn loan rates increased $.03 per bushel for 2003, while most Iowa corn loan rates were decreased $.01 per bushel for 2003. So, Northern Iowa corn loan rates for 2003 are now only $.01-$.04 per bushel higher than comparable loan rates across the border in Southern Minnesota.
Thiesse stated that the loan rate increase is very good news to Minnesota corn producers, because this increases the income support on their 2003 corn production acres through higher loan guarantees and greater loan deficiency payment (LDP) eligibility. As corn prices have been decreasing, it appears likely that producers may be utilizing LDP’s quite extensively this Fall as part of their grain marketing strategies. The added $.03 per bushel to the Minnesota corn loan rates is worth an extra $5.00 per acre with a corn yield of 170 bushels per acre and $4.00 per acre with a corn yield of 135 bushels per acre. The added $.03 per bushel in Minnesota corn loan rates could result in an extra 25-30 million dollars for Minnesota corn farmers in 2003. Thiesse says that a lot of credit goes to the Minnesota Congressional Delegation, State and Local FSA officials, and the leadership of the Minnesota Corn and Soybean Grower’s Associations for helping make the $.03 per bushel increase in Minnesota corn loan rates for 2003 become a reality.
The National loan rate for corn in 2003 is $1.98 per bushel, which is the same as 2002, and was an increase of $.09 per bushel over the 2001 National loan rate of $1.89 per bushel. The National soybean loan rate for 2003 is $5.00 per bushel, the same as 2002 soybean loan rate, which was reduced from $5.26 per bushel in 2001 as part of the new Farm Bill in 2002. Thiesse points out that the loan rate reduction for soybeans was expected, in order to make soybean loan rates more comparable with loan rates for corn, wheat, and other program crops. The reduction in soybean loan rates was offset by including soybeans and other oilseed crops as "program crops" in the new Farm Bill. This means that soybean base acres are eligible to earn Direct and Counter-Cyclical payments in farm programs from 2002-2007, which has helped compensate for the loan rate reductions in the new Farm Bill.
Thiesse said that the 2003 County loan rates in Minnesota for soybeans are the same as 2002, which was a reduction of $.25 per bushel from 2001 soybean loan rates. In late July, "posted county prices" for soybeans in Minnesota were still about $.20 - $.30 per bushel above County loan rates, which means the soybean market would still have to decline somewhat before there is LDP eligibility on the 2003 soybean crop.
County loan rates for corn, soybeans, wheat, and other eligible commodities for 2001, 2002, and 2003 in all counties in Minnesota are available on the Blue Earth County Extension Service web site. The web site address is : http://www.extension.umn.edu/county/blueearth/
The loan rates for all commodities in every County in the United States are also available on the National FSA loan rate web site at : http://www.fsa.usda.gov/dafp/psd/loanrate.htm