Low Wheat Prices Trigger Federal Aid Programs Grain Growers Facing Hard Times May Qualify For Loan Deficiency Payments

It seems like the only thing grain farmers can’t grow here is money.

Wheat prices keep sinking - this week to less than $2.50 a bushel, far below the nearly $4 a bushel Washington and Idaho farmers paid to produce it.

It’s just not a good year to be in wheat, growers say.

To help financially-strapped wheat farmers, the U.S. Department of Agriculture is readying crop loans and federal aid programs and offering new tools, such as its loan deficiency payment program.

The program would pay farmers a sum in lieu of granting them federal loans they may not be able to repay.

Though the loan deficiency payment program has been in effect since 1993, this is the first time it will be used for wheat, said Mike Mandere, spokesman for USDA’s Washington state office. But this is also the first time since the program’s inception that wheat prices have dropped below average county Farm Service Agency loan rates, he said.

A farmer in Whitman County, for example, may have 10,000 bushels of 1998 soft white wheat in storage. Instead of offering it as collateral for a federal loan, he can join the payment program and the FSA will give him the difference between the county loan rate and the price for which wheat is selling.

On Tuesday that difference was between the $2.80-per-bushel loan rate and $2.47-per-bushel price of wheat. For 10,000 bushels, the price difference of 33 cents would bring $3,300, Mandere said. The farmer could use that money to support his farm or continue to store the grain until prices rise.

The program is designed to discourage farmers from taking out federal loans for which they may have to forfeit their wheat to the government if prices don’t improve.

“The U.S. government wants to avoid forfeiture,” Mandere said. “It’s costly to the taxpayers to own that grain and pay storage on it.”

The USDA already has 19.6 million bushels of forfeited wheat in storage in Washington state and 93 million bushels nationwide.

Mandere said the agency is expecting more wheat forfeitures after the 1998 harvest. “We’re getting to the point where it’s just going to explode this summer,” he said.

Alex McGregor, president of the Washington Association of Wheat Growers, said farmers should consider the payment program along with other government offerings.

“This certainly does qualify as tough times,” he said. “I think when we face the challenges we currently face in the marketplace, we have to look at all the tools available.”

The schedule includes: Colfax: 2 p.m., June 16 in the Colfax Public Service Building. Lind: 8:30 a.m., June 17 in the Lion’s Club. Pasco: 9:30 a.m., June 18 at the USDA Service Center. Ritzville: 8 a.m., June 19 at the Marcellus Grange Hall. For more information, call the county FSA office.