The U.S. Department of Agriculture today announced 2021 crop loan rates for four types of peanuts. The rates take effect August 1, 2021, the beginning of the peanut crop year.
Eligible producers can obtain peanut loans through their local Farm Service Agency (FSA) county offices or alternative delivery partners, such as Designated Marketing Associations (DMA) and Cooperative Marketing Associations (CMA). These loans provide producers with interim financing on their production and facilitate the orderly distribution of loan-eligible peanuts throughout the year.
The 2018 Farm Bill established the national loan rate for peanuts at $355 per ton. USDA’s Commodity Credit Corporation (CCC) calculated the price support levels for each peanut type using the same method as last year. The 2021 Crop Peanut Loan Rate was calculated using the national loan rate and five-year average quality factors, along with a three-year simple average weighted production. For an average grade ton of 2021 crop peanuts, loan levels by type are:
|Runner-type peanuts||$354.89 per ton|
|Spanish-type peanuts||$343.05 per ton|
|Valencia-type peanuts||$357.70 per ton|
|Virginia-type peanuts||$357.70 per ton|
CCC applies premiums and discounts for quality factors to compute the loan value for an individual ton of peanuts. The actual loan level depends on the percent of various sizes of kernels in each ton. CCC uses the percentage of sound mature kernels (SMK) and sound splits to compute the basic loan value of the load.
SMKs are whole kernels that pass over the testing screen officially designated for each type of peanut. Sound splits are whole kernels split into two pieces. Excess sound splits receive discounts. There are discounts for other kernels, damaged kernels and foreign materials. An additional discount occurs for loose shell kernels. Other quality discounts also may apply.
For each percent of SMK in a ton of peanuts, plus each percent of sound splits, the loan levels are:
|Runner-type peanuts||$4.812 per percent|
|Spanish-type peanuts||$4.788 per percent|
|Valencia-type peanuts||$5.393 per percent|
|Virginia-type peanuts||$4.908 per percent|