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September 15, 2000
 

2000 Crop LDP/MLG Payouts: $10 Billion-plus

Countercyclical payments. That’s a “catch-phrase” when it comes to talk about what to do about current farm policy. But what about the current loan deficiency payment (LDP/Marketing Loan Gain[MLG]) payments? They do increase as prices go down and are paid on actual production. For 2000, those payments are forecast to be record for many crops.

USDA’s post-Crop Production Report payment estimates for combined LDP/MLG payments on a marketing-year basis point to a $10 billion price tag right now. Here’s a snapshot of the main commodities and projected payouts for 2000 crops based on their respective marketing years:

Record total LDP/MLG payments
expected for most 2000 crops
Total in billion dollars; units are $ per bu.
except per cwt. for rice, per lb. on cotton

Total 2000
crop payment
Average
2000 Payment
Total 1999
crop payment
% of 2000 crop
getting payment
Corn
$4.7
95%
$0.45
$2.3
Soybeans
$3.3
95%
$1.10
$2.4
Wheat
$0.930
88%
$0.50
$0.935
Rice*
$0.500
98.4%
$2.55
$0.395
Cotton**
NA
NA
NA
$1.697

*Rice info on rough basis; payments are per cwt.
**Cotton is upland; payments are per pound.
Marketing years: September/August for corn and soybeans; June/May for wheat; August/July for cotton and rice.
Source: ProFarmer, Aug. 19, 2000