§7232 Loan Rates for Marketing Assistance Loans

Summary

Sets how high or low the marketing assistance loan rates must be for major crops. For most crops the Secretary of Agriculture must start with at least 85 percent of the simple average price farmers got over the previous 5 marketing years, dropping the single highest and lowest year. For wheat that base cannot be more than $2.58 per bushel. For corn the base cannot be more than $1.89 per bushel. Corn and wheat rates can be lowered if ending stocks are high: for wheat the Secretary may cut the rate up to 10 percent if stocks/use are 30 percent or more, up to 5 percent if stocks/use are 15–30 percent, and not cut it if stocks/use are under 15 percent; for corn the same rules apply but with 25 percent and 12.5 percent thresholds. Grain sorghum, barley, and oats are set relative to corn, based on feeding value. Upland cotton rates use a specified U.S. or adjusted international price formula and must be between $0.50 and $0.5192 per pound. Extra long staple cotton uses an 85 percent three-of-five-year average and cannot exceed $0.7965 per pound. Rice is $6.50 per hundredweight. Soybeans follow the 85 percent rule but must be between $4.92 and $5.26 per bushel. Several oilseeds (sunflower, canola, rapeseed, safflower, mustard, flax) follow the 85 percent rule and must be between $0.087 and $0.093 per pound. Other oilseeds are set relative to soybeans and not below soybeans on a per-pound basis (except cottonseed).