Corn and soybean harvest is nearing completion in this area, with few exceptions.

Most producers are reporting good yields, which is somewhat surprising since June and July were relatively dry months. This is probably a testament to newer seed varieties, which are becoming more and more drought tolerant. Accordingly, seed costs much more than it used to: Corn is about $190 per bag and soybean seed is about $35 a bag.

Although commodity prices are higher than in previous years, grain producers will need to make 2008 planting decisions with a sharp pencil, considering that input costs are increasing substantially.

I would predict 2007 was a good year for many producers; good tax planning will be essential. However, 2008 will be much different, attributed mostly to the price of a barrel of crude oil. Some input costs will be 40 percent higher than 2007. Off road diesel fuel, for example, is more than $3 per gallon, while fertilizer is $600 a ton, to name a few.

Producers will need to realize that business as usual may run their operation in the red; again, use a sharp pencil.

For those who are storing grain for sale later in the year for feeding purposes may want to consider a corn or soybean loan. Commodity loans provide one option for producers to consider when obtaining operating capital for crop inputs. Commodity loans are simple to process and are normally completed within five working days of the request. Commodity loans are popular for a variety of reasons: to provide capital, provide better opportunity for timely grain marketing, or to capitalize on discounts for inputs offered in the winter. Each farm has its own use.

Since the interest rate is low, currently 5 1/8 percent, producers could maximize early order discounts by paying for seed, fertilizer and crop protection products now. Normally, "in season" prices are considerably higher.

The following information is only a brief overview and specific questions should be directed to the FSA staff:

• Eligibility — Corn and soybean production on any farm. Conservation compliance rules do not apply.

• Terms — Matures in nine months; interest rate is the rate in effect the month of loan disbursal and proceeds are direct deposited into your bank account.

• Repayment — Payments can be made at any time during the loan period.

• Collateral — The grain pledged for loan is the collateral; it may not be fed or sold without first repaying a specific quantity or obtaining a marketing authorization.

• Storage — Grain must be stored in an approved structure for on-farm storage. Warehouse-stored grains are also eligible if stored at an approved warehouse.

To summarize, commodity loans offer some advantages to assist producers in their marketing plans, which may fall in place with tax preparation.