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Wheat producers are eligible to receive loan deficiency payments as prices drop

  • Wheat
A map showing loan deficiency payments to wheat producers during the 2016/17 marketing year.

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When wheat prices posted at county elevators fall below the annual county and class-specific marketing assistance loan rate, producers become eligible to receive loan deficiency payments (LDP). An LDP is a direct payment to farmers that covers the difference between the current local price and the pre-determined county loan rate. A 2016/17 marketing year drop in the price of all wheat has made producers eligible to receive government support from the LDP program, provided they meet basic requirements. Producers are not required to sign up ahead of time to be eligible. This is the first time that LDPs have been made for wheat since the 2010/11 marketing year. USDA reports that LDPs in the 2016/17 marketing year to date are $117 million. Payments have been made on a total of 560 million bushels of wheat with an average LDP of almost 21 cents per bushel. Per bushel payments (to date) are highest in Oklahoma, at near 26 cents per bushel. The State with the largest number of bushels to receive an LDP is Kansas. To date, about 271.5 million bushels of wheat or about 58 percent of the total volume of wheat produced in the State during the current marketing year has received an LPD. This map appears in the ERS Wheat Outlook report released in January 2017.

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