Corn and soybean producers have a few options available once the crop has been harvested. Commodity loans, loan deficiency payments and warehouse loans could fit into all producers' plans depending on each producer's objective. Since there is substantially more corn producers than soybean producers, lets look at the options for harvested corn production.

First we need to realize all corn acreage is eligible for these Farm Service Agency benefits. One common misconception is that some producers think they are ineligible if their farm does not have a corn base and they have never participated in any FSA programs. This is false; production from all farms is eligible.

The other common misconception is that corn production is not eligible if it is being used for feed. This, again, is false. Corn that is destined for feed purposes is eligible for benefits including corn silage.

Although there are three options available for corn production, Loan Deficiency Payments (LDP) are clearly the option of choice for most producers. LDPs are a deficiency payment for harvested production. The LDP rate currently is 46 cents per bushel.

Although the rate changes daily, the rules do not and producers must remember to request LDPs prior to feeding or selling the production. Quantities fed or sold prior to signing at FSA are ineligible.

There really is no good reason not to take advantage of the LDP program. For average production an LDP payment could be $50 per acre.

The other two options for corn production could be commodity and warehouse loans. The first item to remember about commodity loans is that production that was pledged for LDP purposes is ineligible for loans. The interest rate is 4 percent for a 9 month term. Both farm-stored and warehouse-stored commodity loans have consistent rules. Generally what producers want to know is that the loan rate is either $2.14 per bushel or $2.09 per bushel depending on the county where stored. The grain is the collateral and no other lien is required.

Balance sheets, tax records or other financial documents are not required. Commodity loans are disbursed within three working days after the request. Loans often suit producers that do not want to sell or feed their crop now and need capital to operate.

The best part about a commodity loan is that in many cases repayments are made at the posted county price, which changes daily and mirrors the current cash bids. So if the posted price is at or below the loan rate, there is no interest paid and the difference is considered a market gain. Often times, producers with loans repay only to realize the market gain works just like an LDP payment. In the end they are ahead of the game. However, since the LDP rate is so high right now, we will probably see fewer corn loans this year and more soybean loans.

Soybean producers have the same options as corn producers but due to the current market price exceeding the $5.06 loan rate, LDPs have not been applicable except for just a few days. This could change, but who knows?

For that reason, soybean producers may need to consider a different strategy. Request a loan on the beans; take an LDP on the corn. Then, probably in February or March, take a chance that South America's harvest will weigh on the market and repay the loan for a market gain. Realize also that repayments can be made at any time for production that is to be sold. FSA will provide a marketing authorization. Although each farm has specific issues more often than not some form of price support is available. Sometimes it is a combination of all options and other times just an LDP. As always it is probably a good idea to contact the office for more information.