ST. LOUIS - The passage of a
Senate farm bill amendment gives
soybean farmers a choice of a $5.02
loan or a $35 per acre payment,
says American Soybean
Association President George
Fluegel. The bill now moves to
conference committee and further
negotiations.
The Illinois soybean farmer said
the compromise came after hours
of negotiating with Senate leaders
who rejected the ASA $5O per acre
“FAIR” proposal as “too ex
pensive,” even though it allowed
for a reduced soybean loan.
“We told Senate leaders “no
deal” when they asked us to accept
lower loan rates without payments
of at least $5O per acre,” explains
Fluegel.
“When they wouldn’t accept
that, we worked out an alternate
approach that maintains the $5.02
per bushel loan rate for 1985 for
those who want it and a $35 per
acre payment for those who want
an upfront payment in lieu of price
protection. Considering the
current budget cutting mood in
Washington, this is a good alter
native.”
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Senate Farm Bill gives soybean
Fluegel points out that soybean
loans were targeted to be reduced
in both the Senate and House bills.
The 1986 House-approved farm bill
grants the Secretary of
Agriculture unrestricted authority
to drop the 1986 soybean loan to
$4.77 (ASA strongly opposed this).
And the Senate farm bill would
have allowed 1986 soybean loans to
fall to $4.52 if prices this year
average below $5.27 per bushel.
“This soybean compromise in
the Senate farm bill gives soybean
farmers the income support they
need while allowing necessary
adjustments in soybean market
prices,” says Fluegel. “For the
average soybean farmer, this
means about $1 per bushel in ad
dition to what he gets when he sells
his crop. And for the farmer who
needs a price assurance, it
provides continuation of the $5.02
loan.”
The soybean portion of the
Senate farm bill gives farmers two
choices for 1985 soybeans: the $5.02
loan as currently written, or $35.00
per acre ($3O in cash and $5.00 in
beans).
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THE CHOICE FOR YOU IS M - MRP TRACTOR SALES ARE M
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For example:
• If a farmer forfeits the right to
put 1985-crop soybeans under loan,
the farmer will receive $35 per
acre ($3O in cash and $5 in beans);
or
• If 1985 beans are under loan,
farmers have 60 days to decide: a)
To repay the loan and take the $35
per acre payment; or b) keep
soybeans under loan and receive
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1986
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LOAN VS NON-LOAN ANALYSIS
The following table illustrates minimum cash price necessary to net price equal to $5.02 support
price for a non-loan participant who takes $35 per acre payment.
Yield (bu/ac)
25
35
45
In this example, a 35 bu/ac farmer who sells beans for anything over $4.02 will make more than had
he put beans under loan and forfeited his crop to the CCC.
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Lancaster Arming, Saturday, December 14,1985-A29
growers a choice
no payment.
“The real advantage of this price levels and stimulate U.S.
program is that it gives farmers a soybean exports. Competitive
choice,” says Fluegel. “It pricing will put pressure on foreign
preserves the $5.02 loan rate for soybean producers to reduce
the farmer who needs price soybean plantings. Provisions for a
assurance. Farmers who do not floating loan level in the future will
participate in the loan program restore elasticity to the soybean
are assured a $35 per acre market. This will eliminate huge
payment. forfeitures of soybeans to the CCC
“This program will support which depresses prices.”
Loan
$5.02
5.02
5.02
farmer selling at more competitive
$35/Ac Pmt.
$1.40
1.00
.78
Break Even
Cash price
$3.62
4.02
4.24