Although it is just mid-August, now is the time for producers to plan ahead for fall storage of harvested production. Producers who will not have adequate storage space may want to consider additional storage in the way of silo, grain bin, flat storage horizontal silo, etc. Corn silage harvest will be starting on some farms later this month. Each year a few producers visit the FSA office a few days before harvest is ready to start and want to obtain a loan to build a storage structure … and they want to start construction tomorrow.

Producers need to realize a storage facility loan does not get approved that fast. It takes four to eight weeks sometimes for loan approval. The interest rate for loans approved in August is 5 3/8 percent. Facility loans have a eight-year term, repayments can be made monthly or annually. Eligible structures and equipment include new silos and grain bins, new dryers and silo unloaders, excavation, concrete, labor and other construction costs. All loans require 15 percent down payment. The remaining 85 percent is then disbursed as a facility loan after the structure has been completed.

Another type of loan some grain producers may want to consider is a commodity loan. Commodity loans are simple in that the grain is the collateral and they can be disbursed within three days. Loan rates for small grains are as follows:• Wheat is $2.67/bushel• Oats is $1.39/bushel• Barley is $1.58/bushelThe following information is only a brief overview and specific questions should be directed to the FSA staff.• Eligibility — Wheat, oats, barley production from all farms. Acreage reports must be on file and conservation compliance rules do apply.• Terms — Matures in nine months, interest rate is 6.25 percent, and proceeds are deposited directly into your account.• Repayment — Payments can be made at any time during the loan period. Repayment rates could very well be below the loan rate, which means no interest payment. Loan repayments can be at the daily market price. This difference is considered a market gain. Sometimes market gains can be very substantial.• Collateral — The grain pledged for loan is the collateral, it may not be moved or fed 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.• Lock-in repayments — Producers may lock into a repayment rate for a period of 60 days. This rule change will permit producers to maximize a market gain.To summarize, commodity loans offer some advantages to assist producers.