FACT SHEET

UNITED STATES DEPARTMENT OF AGRICULTURE

FARM SERVICE AGENCY

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February 2011

 Peanut Marketing Assistance Loans and Loan Deficiency Payments

Overview

The Food, Conservation and Energy Act 

of 2008 (2008 Act) authorizes Marketing Assistance Loans (MALs) and Loan 

Deficiency Payments (LDPs) for crop 

years 2008-2012 for peanut producers. Producers may apply for MALs for 

farm or warehouse-stored peanuts or for 

peanut LDPs. These programs help to 

stabilize America’s peanut industry and 

ensure the well being of agriculture in 

the United States.

Peanut nonrecourse marketing assistance loans provide eligible producers 

with interim financing on their production and facilitate the orderly distribution of loan-eligible peanuts throughout 

the year. A nonrecourse loan allows a 

producer with eligible peanuts to store 

the production and pledge the peanuts as 

collateral instead of selling them immediately after harvest. The loan helps an 

eligible producer pay bills without having to sell the peanuts at a time of year 

when prices tend to be lowest. When 

market conditions may be more favorable, a producer may sell the peanuts 

and repay the loan with the proceeds of 

the sale. If a producer is unable to repay 

the loan, he or she can deliver to Commodity Credit Corporation (CCC) the 

quantity of peanuts pledged as collateral 

as full payment for the loan at maturity.

Nonrecourse MALs and LDPs are 

administered by the U.S. Department 

of Agriculture’s (USDA) Farm Service 

Agency (FSA) on behalf of CCC. 

See the fact sheet Nonrecourse Marketing Assistance Loans/Loan Deficiency 

Payments for additional information on 

MALs and LDPs.

To be eligible for a loan or LDP, the 

peanuts must:

• Have been produced and harvested 

by an eligible producer and be in 

storable condition;

• Be merchantable for feed, food or 

other uses as determined by CCC;

• Meet the specific commodity eligibility requirements for nonrecourse 

loans;

• Be one of the following types: Virginia, Runner, Spanish or Valencia;

• Not have been shelled or crushed;

• Be inspected and graded if 

warehouse-stored and; 

• Be inspected and graded upon 

delivery if farm-stored.

Beneficial Interest

 

Producers must have beneficial interest 

in the peanuts at the time of the request 

to obtain a MAL or LDP. Beneficial 

interest consists of the producer’s 

maintaining control of and title to the 

peanuts.

Application Process for Marketing 

Assistance Loans

 

For a MAL, producers can request a 

farm-stored or warehouse-stored loan. 

Warehouse-stored loans will be adjusted 

for premiums and discounts, if applicable.

Loan Limit and Terms

 

 The 2008 Act requires CCC to pay 

handling and associated (other than storage) costs for all peanuts placed in MAL 

program through the 2008-2012 crop 

years when the loan is disbursed. Subsequently, when the loan is redeemed, 

all handling and associated costs must 

be repaid to CCC. 

 

Farm-stored loans are either certified or 

measured. Certified loans refer to the 

producer personally certifying the crop 

quantity in farm storage.

 

Measured loans refer to on-site measurement conducted by an FSA employee, 

which requires payment for the service 

at the time of request.

 

Producers who request warehousestored loans must present an acceptable warehouse receipt issued by a 

CCC-approved warehouse. To obtain 

a warehouse-stored peanut loan, CCC 

loan collateral peanuts must be stored in 

a CCC-approved warehouse.

Loan Rate

The 2008 Act sets the national loan rate 

for peanuts at $355 per ton. CCC utilizes the national loan rate of $355 per 

ton and five year average quality factors, 

along with a three-year simple average 

of weighted production to determine the 

specific crop year loan rate for the type 

of peanuts (Runner, Spanish, Valencia, 

or Virginia). Each crop year, CCC will 

announce the loan rate per ton by type 

of peanuts.

Average Crop Revenue Election 

(ACRE)

MAL rate will be reduced by 30 percent if production comes from a farm 

participating in the ACRE program. 

Alternative loan repayment rates will 

not be adjusted by 30 percent. The LDP 

rate for commodities produced on farms 

enrolled in ACRE must include the 30 

percent reduction from the MAL rate before determining the LDP rate. See fact 

sheet entitled ACRE Program, or contact 

a local USDA Service Center, or visit 

the FSA website at www.fsa.usda.gov.

Service Fees

 

The peanut marketing assistance loan 

service fee, which is nonrefundable, 

shall be the smaller of the following:

• $45 for each loan plus $3 for each 

storage bin or receipt over one or; 

• Half of 1 percent times the gross 

amount of the loan.

Exception: This fee is not applicable 

to Designated Marketing Associations 

(DMAs).

Marketing Loan Gains

 

A producer realizes a marketing loan 

gain if the loan is repaid at less than 

the loan principal. The marketing loan 

gain rate equals the amount by which 

the applicable loan rate exceeds the loan 

repayment rates.
FACT SHEET

Peanut MALs and LDPs February 2011

Authorized Offsets

 

Offsets from the loan proceeds (or 

deductions) may be made for amounts 

contained on a separate statement of 

unpaid charges or a separate bill for 

unpaid charges. These charges must 

be associated with the handling of the 

peanuts represented by the warehouse 

receipt and the marketing of the peanuts 

pledged as loan collateral. The FSA 

county offices, peanut DMAs and Cooperative Marketing Associations (CMAs) 

are only authorized to offset charges 

associated with cleaning, drying, custom 

harvesting, seed accounts and storage 

of peanuts from the producer’s loan 

proceeds. These charges are not considered a lien and must be included on 

a CCC-679, block 8(3), if an offset will 

be made for these charges. The deputy 

administrator for Farm Programs must 

approve all other requests for offset of 

charges.

Loan Deficiency Payments

 

A producer who is eligible to obtain a 

loan, but who agrees to forgo the loan, 

may obtain a loan deficiency payment 

(LDP). The LDP rate equals the amount 

by which the applicable loan rate where 

the commodity is stored exceeds the 

national posted repayment rate. 

 

When the National Posted Price by 

peanut type is higher than the applicable 

loan rate, there would be no LDP.

 

LDPs can either be certified or based 

on submitted acceptable production 

evidence. LDPs must be requested on 

form CCC-633 EZ. Eligible producers 

must indicate their intentions by submitting a completed CCC-633 EZ, page 1, 

to their local FSA county office before 

beneficial interest is lost and by the final 

loan availability date. The CCC-633 

EZ, page 2, must be submitted by the 

producer when the producer wants the 

LDP payment. LDPs are assignable and 

not subject to premiums or discounts. 

The basic LDP rate is the rate in effect 

on the date of request.

 

Peanut DMA’s will obtain the CCC-633 

EZ from their customers. 

 

Note: A FSA-1007 may be considered 

acceptable production evidence only if a 

producer has filed a completed CCC633 EZ (pages 1 and 2) and the peanuts 

are immediately sold upon delivery. 

The date the peanuts are sold will be 

printed on the FSA-1007, and this date 

is used to determine when beneficial 

interest is lost.

Electronic Warehouse Receipts

 

The use of peanut electronic warehouse 

receipts (EWR) is acceptable and FSA 

has designated a provider (EWR, Inc.) 

to issue peanut EWRs. The electronic 

system is designed to:

• Allow the provider to issue peanut 

EWRs following the guidelines 

issued by FSA; 

• Transfer EWR data from the provider to the requesting FSA county 

office;

• Use EWR data received from the 

provider to process MALs or LDPs 

using the Automated Price Support 

System and; 

• Track the status of EWRs.

Repayment Rates (National Posted 

Price)

 

CCC announces the national posted 

price for peanuts weekly on Tuesdays 

at 3 p.m. Eastern Time (ET) on the 

FSA website and in local FSA offices. 

The repayment rate becomes effective 

Wednesday at 12:01 a.m. ET. The rates 

can be obtained by visiting: http://www.

fsa.usda.gov/Internet/FSA_File/peanut.

xls.

Designation of Agent

 

Producers may designate an agent to 

redeem all or a portion of the peanuts 

pledged as collateral for a MAL.

 

Designation of an agent does not relieve 

the producer from the terms and conditions of the note and security agreement. Designated agents may transfer 

the designation to a subsequent agent 

on form CCC-605P, by endorsement. 

Agents who are subsequently designated 

may transfer the designation to other 

subsequent agents on CCC-605P-2, by 

endorsement. County offices will make 

forms CCC-605P, CCC-605-1 and CCC605P-2 available to the public. Producers should be advised that a separate 

CCC-605P is required for each loan. 

These forms are available at http://

forms.sc.egov.usda.gov/eforms/mainservlet or in FSA county offices.

Peanuts Forfeited to CCC 

 

If a loan is not repaid within the ninemonth loan period and the peanuts are 

subsequently forfeited to CCC, CCC 

will pay storage, handling and other 

associated cost for all peanuts pledged 

as collateral.

Application Deadline/Loan Availability Period

 

Peanut MALs and LDPs are available 

to all eligible producers during the year 

following a normal harvest. All applications for peanut marketing assistance 

loans or LDPs must be made by Jan. 31.

 

For More Information

 

Additional information on MALs and 

LDPs for peanut producers is available 

from local USDA Service Centers and 

on the FSA website at http://www.fsa.

usda.gov.

The U.S. Department of Agriculture (USDA) 

prohibits discrimination in all of its programs 

and activities on the basis of race, color, 

national origin, age, disability, and where applicable, sex, marital status, familial status, 

parental status, religion, sexual orientation, 

political beliefs, genetic information, reprisal, or because all of part of an individual’s 

income is derived from any public assistance program. (Not all bases apply to all 

programs.) Persons with disabilities who 

require alternative means for communication of program information (Braille, large 

print, audiotape, etc.) should contact USDA’s 

TARGET Center at (202) 720-2600 (voice 

and TDD). 

To file a complaint of discrimination, write to 

USDA, Assistant Secretary for Civil Rights, 

Office of the Assistant Secretary for Civil 

Rights, 1400 Independence Avenue, S.W., 

Stop 9410, Washington, DC 20250-9410, or 

call toll-free at (866) 632-9992 (English) or 

(800) 877-8339 (TDD) or (866) 377-8642 

(English Federal-relay) or (800) 845-6136 

(Spanish Federal-relay). USDA is an equal 

opportunity provider and employer.

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