USDA announces purchases of commodity certificates now available

Published 3:37 pm Sunday, February 14, 2016

The U.S. Department of Agriculture (USDA) announced on Feb. 3 that producers who have crops pledged as collateral for a marketing assistance loan can now purchase a commodity certificate that may be exchanged for the outstanding loan collateral. 

The authority is provided by legislation enacted by Congress in December.

Commodity certificates are available beginning with the 2015 crop in situations where the applicable marketing assistance loan rate exceeds the exchange rate. Currently, the only eligible commodity is cotton.

USDA’s Farm Service Agency (FSA) routinely provides agricultural producers with marketing assistance loans that provide interim cash flow without having to sell the commodities when market prices are at harvest time lows. The loans allow the producer to store and delay the sale of the commodity until more favorable market conditions emerge, while also providing for a more orderly marketing of commodities throughout the marketing year.

These loans are considered “nonrecourse” because the loan can be redeemed by delivering the commodity pledged as collateral to the government as full payment for the loan upon maturity.

These certificates can be purchased at the posted county price (or adjusted world price or national posted price) for the quantity of commodity under loan, and must be immediately exchanged for the collateral, satisfying the loan.

The phone number for the Tyrrell-Dare FSA office in Columbia is 252-796-3701 Columbia, and for the Washington County office in Plymouth it is 252-793-3870. The fax number for both offices is 844-325-6846.