USA: Explanation on fluctuations of barley loan deficiency payment levels in Idaho

As many of Idaho producers are aware, barley loan deficiency payment levels have dropped sharply since the middle of August. The Idaho Barley Commission sought answers from the USDA Farm Service Agency on the reasons for this sharp decline.

According to the finding of Idaho Barley Commission, Montana barley growers raised concerns in early August that their posted county prices (PCPs) were too high and did not reflect actual local market prices. USDA/FSA made extensive calls to verify local Montana market prices and confirmed that Montana’s posted county prices were, in fact, too high. This resulted in a significant adjustment starting on August 12. Montana PCPs were lowered, resulting in higher LDPs (calculated as county loan rate minus the posted county price).

USDA wanted to make sure that similar problems did not exist in neighbouring states of Idaho, Oregon and Washington so they made similar calls to local elevators. They found the opposite situation in Idaho. The posted county prices were too low compared to actual local prices so USDA made the opposite adjustment – raised PCPs in most Idaho counties. This has the net effect of lowering LDPs.

The weekly market reports of Idaho Barley Commission confirm USDA’s findings. Idaho’s feed barley market prices were higher than what was reflected in Idaho’s PCPs early in August and were subsequently adjusted higher by USDA, resulting in lower LDPs. This is not what our farmers wanted to hear, but it is consistent with prevailing market prices, with the exception of a few counties in eastern Idaho (Caribou, Fremont, Jefferson and Teton).

The Idaho Barley Commission continues to monitor local market and posted county prices to ensure there are not wide disparities that can skew the loan deficiency payments.

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