# Presentation: 326300

## How will Peanut Storage, In-handling and Associated Cost Work in 2007?

**2007 Summer Educational Conference**
**National Buying Point Association**
**August 9, 2007**

## QUESTIONS ???

## The Farm Security and Rural Investment Act of 2002 (2002 Act), required CCC to pay storage, handling, and other associated costs for all peanuts placed in the MAL program through the 2006 crop year.  

This mandate was terminated with the 2007 crop year. 

- The Farm Security and Rural Investment Act of 2002 (2002 Act), required CCC to pay storage, handling, and other associated costs for all peanuts placed in the MAL program through the 2006 crop year.
- This mandate was terminated with the 2007 crop year.

## WHO DOES THIS CHANGE EFFECT?

**Price Support**
**Division**

**National**
**FSA**
**Division**

**FSA State**
**Office**

**Manufacturers**

**US House of**
**Representatives**

**Blanchers**

**Handlers**

**Buying **
**Points**

**Shellers**

**Federal State**
**Inspection Service**

**Agriculture Marketing**
**Service**

**FSA-County Offices**

**Producers**

**Kansas City**
**Management Office**

**Peanut EWR**

**US Senate**

**Notes:**
JUST ABOUT EVERYBODY WILL FEEL THE EFFECTS OF THIS CHANGE IN ONE WAY OR ANOTHER.

## 
FSA issued policy in notice LP-2065 and 2007 Peanut Guidelines.

- FSA issued policy in notice LP-2065 and 2007 Peanut Guidelines.

## Notice LP-2065 authorized offsets for:

Peanut Storage  

In-handling

- Notice LP-2065 authorized offsets for:
- Peanut Storage
- In-handling

## 2007 Guidelines further provided:

Methodology for Calculating the MAL.   

Required Documentation.

- 2007 Guidelines further provided:
- Methodology for Calculating the MAL.
- Required Documentation.

## The warehouseman will issue a warehouse receipt notating on the receipt if storage has been “PAID” for or “PROVIDED” for through loan maturity.

FSA will not reduce the loan rate and issue the MAL with no adjustments.

Note:  All regular MAL fees apply.

- The warehouseman will issue a warehouse receipt notating on the receipt if storage has been “PAID” for or “PROVIDED” for through loan maturity.
**FSA will not reduce the loan rate and issue the MAL with no adjustments.**
**Note:****  All regular MAL fees apply.**

## If the warehouse receipt is issued by the warehouseman indicating that storage charges have NOT BEEN paid or PARTIALLY paid through or provided for through loan maturity then CCC will:

reduce the loan rate by the amount of unpaid storage charges through loan maturity.

- If the warehouse receipt is issued by the warehouseman indicating that storage charges have **NOT BEEN**** paid or ****PARTIALLY** paid through or provided for through loan maturity then CCC will:
- reduce the loan rate by the amount of unpaid storage charges through loan maturity.

**Notes:**

NOTE:  TO PROTECT CCC COLLATERAL IN THE EVENT THE PEANUTS ARE FORFEITED TO CCC THE LOAN WAS REDUCED AND A LESSER LOAN PRNICIPAL WAS DISBURSED TO THE PRODUCER. 

## For Storage and/or In-handling to be offset the producer must:

Present a bill or a statement of unpaid charges   with the warehouse receipt when requesting a marketing assistance loan (MAL).   

Complete a CCC-679. 
    (similar to cleaning/drying)

**For Storage and/or In-handling to be offset the producer must:**
**Present a bill or a statement of unpaid charges   with the warehouse receipt when requesting a marketing assistance loan (MAL).   **
**Complete a CCC-679. **
**    *****(similar to cleaning/drying)***

##   Storage and/or In-handling will: 

be deducted from the full MAL proceeds as directed by each producer.

NOT be considered a LIEN.

Note:  Storage charges can be offset ONLY if 	     the warehouse receipt indicates storage 	     has been PAID or PROVIDED for, as 		     applicable.

-   **Storage and/or In-handling will: **
**be deducted from the full MAL proceeds as directed by each producer.**
**NOT**** be considered a ****LIEN****.**
**Note:****  Storage charges can be offset ****ONLY**** if ****	****     the warehouse receipt indicates storage ****	****     has been ****PAID**** or ****PROVIDED**** for, as ****	****	****     applicable.**

**Notes:**

NOTE:

STORAGE PAID THROUGH DATE IS NOT BLANK... IF BLANK LOAN MUST BE REDUCED.

## Full Storage Paid or Provided for through Loan Maturity Example

**2007 CROP YEAR LOAN CALCULATIONS: ****	****	****	**
- Assumptions: 2007 Loan Rates, Premiums & Discounts; 2007 CY Storage Rate
- WAREHOUSE RECEIPT DATA                   DESCRIPTION                  FULL STORGE PAID
- 1	Crop Year	                                              2007
- 2	Total Tons (Loan Quantity)	       143.80
- 3	Net Tons	                                            141.42
- 4	LSK Tons	                                                2.38
- 5	Date Receipt Issued	                       11/13/2007
- 6	Date Commodity Received	     11/5/2007
- STORAGE CHARGES
- 7         Storage Charge Per Ton (2007 CY rate) $2.71                                          $2.71
- 8         Date Storage Paid Through                  9/30/2008                                 9/30/2008
- 9         In-Charges Per Ton                               $30.00                                        $30.00
- 10       Prepaid In-Charges                                 $8.00		                      $0.00
- 11      Out-Charges (2007 CY rate)                    $8.00                                          $0.00
- 12       Prepaid Out-Charges                              $8.00                                          $0.00

## Full Storage Paid or Provided for through Loan Maturity Example

**2007 CROP YEAR LOAN CALCULATIONS: ****	****	****	**
- Assumptions: 2007 Loan Rates, Premiums & Discounts; 2007 CY Storage Rate
- WAREHOUSE RECEIPT DATA                                  DESCRIPTION       FULL STORGE PAID
- GRADE FACTORS
- 13	Peanut Type                                          Runner
- 14	Segregation	 	            1
- 15	Foreign Material (FM) %                         3.29
- 16	Moisture (MOI) %                                    9.27
- 17	Sound Splits (SS) %	                     3.20
- 18	Total Sound Mature Kernels (SMK) %   63.l0
- 19 	Damaged Kernels (DK) %                      0.00
- 20	Other Kernels (OK) %                             8.30
- 21	Hulls %                                                  28.59
- 22	Total Kernels & Hulls %                        99.99
- 23	Extra Large Kernels (ELK)                     N/A

## Full Storage Paid or Provided for through Loan Maturity Example

**2007 CROP YEAR LOAN CALCULATIONS: ****	****	****	**
- Assumptions: 2007 Loan Rates, Premiums & Discounts; 2007 CY Storage Rate
- WAREHOUSE RECEIPT DATA                   DESCRIPTION                               FULL STORGE PAID
- GRADE FACTORS
- LOAN MAKING – SEG. 1 PEANUTS
- 24	Disbursement Date/Approval              12/8/2007
- 25        Date Documents Received                11/15/2007
- 26	Loan Maturity Date 	                       9/30/2008
- 27	Basic Commodity Loan Rate  (Line 18 x Total SMK)  + (Line 20 x OK  Rate) +       $316.33
-                                                                      (Line 23 x ELK Rate, if applicable)
- 28 	LSK Rate			      $140.00 per ton                                           $140.00
- 29	Adjusted LSK Rate                 LSK Rate – Storage Deductions Per Ton                 $140.00
- 30        Net Loan Rate  (less DK, FM, SS – Storage Deduct)
-                                                            Line 27  - (DK, FM, SS from discount Table,
-                                                            if applicable) – Storage Deductions Per Ton             $316.33
-                                                  Note:  Loan Maturity (Line 26) = Line 8, No Deduct
-                                                             Line 8 earlier than Line 26 (Use Storage Calculation)
- 31	Storage Deduction Per Ton 			                                       $0.00
- 32	Amt. of Net Tons	        Line 30 x Net Tons                                                $44,735.39
- 33	Amt. of LSK Tons	        Line 28  x Line 4 – Storage Deductions                     $333.20
- 34	Value of Receipt (Before Storage Deduct)                                                         $45,068.59
- Line 27 – (DK<FM<SS from Discount Table) x Line 3 + (Line 28 x Line 4)
- 35       RCPT Loan Amount (After Storage Deduction)  Line 32 +Line 4                       $45,068.59

## Partial Storage Paid or Provided for through Loan Maturity Example

**2007 CROP YEAR LOAN CALCULATIONS: ****	****	****	**
- Assumptions: 2007 Loan Rates, Premiums & Discounts; 2007 CY Storage Rate
- WAREHOUSE RECEIPT DATA                   DESCRIPTION                        PARTIAL STORGE PAID
- GRADE FACTORS
- LOAN MAKING – SEG. 1 PEANUTS
- 24	Disbursement Date/Approval              12/8/2007
- 25        Date Documents Received                11/15/2007
- 26	Loan Maturity Date 	                       9/30/2008
- 27	Basic Commodity Loan Rate  (Line 18 x Total SMK)  + (Line 20 x OK  Rate) +       $316.33
-                                                                      (Line 23 x ELK Rate, if applicable)
- 28 	LSK Rate			      $140.00 per ton                                           $140.00
- 29	Adjusted LSK Rate                 LSK Rate – Storage Deductions Per Ton                  $130.5150
- 30        Net Loan Rate  (less DK, FM, SS – Storage Deduct)
-                                                            Line 27  - (DK, FM, SS from discount Table,
-                                                            if applicable) – Storage Deductions Per Ton             $306.8450
-                                                  Note:  Loan Maturity (Line 26) = Line 8, No Deduct
-                                                             Line 8 earlier than Line 26 (Use Storage Calculation)
- 31	Storage Deduction Per Ton 			                                       $9.4850
- 32	Amt. of Net Tons	        Line 30 x Net Tons                                                $43,394.02
- 33	Amt. of LSK Tons	        Line 28  x Line 4 – Storage Deductions                     $310.63
- 34	Value of Receipt (Before Storage Deduct)                                                         $45,068.59
- Line 27 – (DK<FM<SS from Discount Table) x Line 3 + (Line 28 x Line 4)
- 35       RCPT Loan Amount (After Storage Deduction)  Line 32 +Line 33                      $43,704.65

## BEFORE loan repayment, if the MAL was REDUCED to pay storage, FSA will allow:

the producer/agent to provide proof that warehouse storage charges have been paid or provided for during the period for which the storage was previously deducted.  

adjustments to the dates and the MAL amount to reflect the deducted storage amount and the MAL will be adjusted to account for an additional cash disbursement.

**BEFORE **loan repayment, if the MAL was **REDUCED** to pay storage, FSA will allow:
- the producer/agent to provide proof that warehouse storage charges have been paid or provided for during the period for which the storage was previously deducted.
- adjustments to the dates and the MAL amount to reflect the deducted storage amount and the MAL will be adjusted to account for an additional cash disbursement.

**Notes:**

NOTES:   THE REDUCED LOAN PRINCIPAL CAN NOW BE REFUNDED/ADJUSTED . AND THE  PRODUCER WOULD NOW OWE THE FULL LOAN PRINCIPAL TO FSA WHEN THE LAON IS REPAID

## If the MAL is not repaid within the 
	9-month period and the peanuts are subsequently forfeited to CCC, storage charges will be handled as follows, if charges were: 

paid through maturity, then CCC will pay storage charges to the warehouse starting the day after loan maturity through final disposition.

- If the MAL is not repaid within the
- 	9-month period and the peanuts are subsequently forfeited to CCC, storage charges will be handled as follows, if charges were:
- paid through maturity, then CCC will pay storage charges to the warehouse starting the day after loan maturity through final disposition.

## not fully paid and the loan rate was reduced by FSA, then CCC will pay storage charges to the warehouse from the later of the day after “Date Storage Paid Through” or the “Date Documents Received” through final disposition, when applicable.

paid beyond maturity, then CCC will refund to the producer all storage charges paid beyond the loan maturity date. 

- not fully paid and the loan rate was reduced by FSA, then CCC will pay storage charges to the warehouse from the later of the day after “Date Storage Paid Through” or the “Date Documents Received” through final disposition, when applicable.
- paid beyond maturity, then CCC will refund to the producer all storage charges paid beyond the loan maturity date.

## If the MAL is not repaid within the 
	9-month period and the peanuts are subsequently forfeited to CCC, In-handling charges will be handled as follows: 

- If the MAL is not repaid within the
- 	9-month period and the peanuts are subsequently forfeited to CCC, In-handling charges will be handled as follows:

## CCC  will bring all in-handling charges current and pay the storing warehouse.  Since the producer is responsible he/she will be billed by CCC for the 
   in-handling charges. 

Note: Similar to Cotton Policy

- CCC  will bring all in-handling charges current and pay the storing warehouse.  Since the producer is responsible he/she will be billed by CCC for the
-    in-handling charges.
***Note: Similar to Cotton Policy***

## Questions concerning this policy contact:

Tonye B. Gross
   Peanut Program Manager
Farm Service Agency
Price Support Division
(202) 720-4319
(202) 690-1536
Tonye.Gross@wdc.usda.gov

- Questions concerning this policy contact:
- Tonye B. Gross
-    Peanut Program Manager
- Farm Service Agency
- Price Support Division
- (202) 720-4319
- (202) 690-1536
- Tonye.Gross@wdc.usda.gov

- THANK YOU!!!!