Overview

Marketing assistance loans (MALs) and loan 

deficiency payments (LDPs) are marketing tools 

available during harvest or shearing.

Marketing assistance loans provide interim 

financing at harvest time to help agricultural 

producers meet cash flow needs without having 

to sell their commodities when market prices 

are typically at harvest-time lows. This enables 

producers to delay selling the commodity until 

more favorable market conditions emerge. Storing 

production at harvest (or at shearing for wool and 

mohair) allows more orderly commodity marketing 

throughout the year.

How it Works

A nonrecourse marketing assistance loan can 

be redeemed by repayment, or by delivering 

the agricultural commodity that was pledged as 

collateral to the Commodity Credit Corporation 

(CCC) as full payment for the loan upon maturity.

Recourse marketing assistance loans are also 

available for commodities that may be of lower 

quality due to an element such as high moisture, 

commodities harvested as other than grain, 

or for contaminated commodities that are still 

within merchantable levels of tolerance. Recourse 

MAL’s can only be repaid at principal plus accrued 

interest.

Under certain circumstances, producers may repay 

at less than the loan rate (principal) plus accrued 

interest and other charges. 

Alternatively, LDP provisions specify that in lieu of 

securing a MAL, producers may elect to receive an 

LDP. An LDP is the difference the producer would 

have received if a loan was repaid at the lower 

market price, a direct benefit that does not need to 

be repaid.

MAL repayment and LDP provisions are intended 

to minimize potential delivery, storage, and related 

costs of agricultural commodities to CCC. The 

provisions also are designed to avoid discrepancies 

in marketing loan benefits across states and 

counties and to allow U.S. produced commodities 

to be marketed freely and competitively.

Who is Eligible?

To be eligible for a MAL or LDP, a producer must:

• Comply with conservation and wetland

protection requirements;

• Submit an acreage report for all cropland on all

farms as applicable;

• Have and retain beneficial interest in the

commodity until the MAL is repaid or CCC takes

title to the commodity; and

• Meet adjusted gross income limitations

(described in a later section).

Marketing Assistance Loans 

and Loan Deficiency Payments
September 2020

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Eligible Commodities

Eligible commodities include wheat, corn, grain 

sorghum, barley, oats, upland cotton, extra-long 

staple cotton (eligible for MAL only), long grain 

rice, medium grain rice, soybeans, other oilseeds 

(including sunflower seed, rapeseed, canola, 

safflower, flaxseed, mustard seed, crambe and 

sesame seed), dry peas, lentils, small chickpeas, 

large chickpeas, graded and nongraded wool, 

mohair, unshorn pelts (eligible for LDP only), honey 

and peanuts.

Commodities harvested as other than grain may 

also be eligible for a LDP.

The commodity must:

• Have been produced, mechanically harvested 

or shorn from live animals by an eligible 

producer and be in storable condition;

• Be merchantable for food, feed or other uses, 

as determined by CCC; and

• Meet specific CCC minimum grade and quality 

standards for MALs.

Beneficial Interest

A producer retains beneficial interest in the 

commodity if the producer retains both:

• Control of the commodity - the producer 

retains the ability to make all decisions 

affecting the commodity, including movement, 

sale and the request for a MAL or LDP.

• Title to the commodity - the producer 

has not sold or delivered the commodity or 

warehouse receipt to the buyer. If delivered, 

the title may be considered as transferred 

before the producer receives payment for the 

commodity. For example, title is considered 

transferred if a producer executes an option to 

purchase without a provision stating that title 

and control remain with the producer until the 

buyer exercises the option to purchase, and the 

option to purchase expires at the earlier of:

1. The maturity of any CCC loan secured 

by such commodity;

2. The date CCC claims title to such 

commodity; or

3. Another date provided in the option.

Once beneficial interest in the commodity is lost, 

the commodity loses eligibility for a MAL or LDP 

and remains ineligible even if the producer later 

regains beneficial interest.

If the commodity is delivered to a buyer, processor, 

feedlot or mill that rejects the commodity because 

minimum standards are not met, beneficial interest 

shall not be considered lost if the commodity is 

returned to the producer. The commodity is not 

considered rejected if the producer receives a 

reduced contract price.

Availability Dates

Producers may obtain MALs or receive LDPs on all

or part of their eligible production anytime during 

the loan availability period which runs from when 

the commodity is normally harvested (or sheared) 

until dates specified in Table 1.

Marketing Assistance Loans

Loan Rates

The 2018 Farm Bill sets national loan rates at the 

levels shown in Table 2.

County and regional loan rates are based on each 

commodity’s national loan rate, and:

• Vary by county or region, and;

• Are based on the average prices and 

production of the county or region where 

the commodity is stored.

Loan Premiums and Discounts

Loan premiums and discounts are determined 

according to the grade and quality of a specific 
quantity of the commodity pledged as loan 

collateral. Premium and discount schedules vary 

by commodity and are applied to the loan rate 

in the county where the commodity is stored. 

On a per-unit basis, premiums are added to and 

discounts are subtracted from the loan rate only 

when the MAL is forfeited to CCC. This is for all loan 

commodities except cotton and peanuts for which 

premiums and discounts are applied at the time a 

loan is made.

Interest

The interest rate charged on a commodity loan is 

set at one percentage point above CCC’s cost of 

borrowing on Jan. 1.

Accrued interest is the amount of interest that 

accumulates while a loan is outstanding, starting 

with the day the loan is made. Accrued interest 

is calculated by multiplying: (i) the applicable 

interest rate times, (ii) the ratio of the number of 

days under loan (starting with the initial day and 

continuing through the day prior to the day a loan 

is repaid) to the number of days in a year (i.e., 365) 

times, (iii) the loan principal. Table 3 provides an 

example of how accrued interest is calculated.

Loan Repayment

MALs mature on the last day of the ninth calendar 

month following the month in which the MAL is 

approved, except all seed cotton loans mature on 

May 31 the year following when the cotton was 

planted. A producer may repay an outstanding 

MAL:

• Before maturity period by repaying the MAL, or;

• Upon maturity by settling or forfeiting

the commodity to CCC. The commodity is

transferred to CCC to repay the loan.

For all loan-eligible commodities except extra-long 

staple (ELS) cotton or any recourse loan, a producer 

may repay a MAL any time during the loan period 

at the lesser of the:

• Loan rate plus accrued interest and other

charges, or;

• Alternative loan repayment rate as determined

by CCC.

For wheat, feed grains and oilseeds, the CCCdetermined alternative loan repayment rate 

is often referred to as the posted county price 

(PCP). PCPs are established and available at each 

local USDA Service Center. PCPs are based upon 

market prices at appropriate U.S. terminal markets, 

adjusted to reflect quality and location. PCPs are 

announced daily for wheat, feed grains, soybeans, 

canola, flaxseed and sunflower seed, and weekly 

for other oilseeds.

For peanuts, CCC determines national posted 

prices (NPP) for four types of peanuts and 

announces them weekly. For dry peas and lentils, 

CCC determines and announces regional posted 

prices weekly. For wool and large and small 

chickpeas, CCC determines and announces an NPP 

weekly. For honey, CCC determines and announces 

the national survey price monthly. For long and 

medium grain rice and upland cotton, a producer 

may repay a MAL any time during the loan period 

at the lesser of the:

• Loan rate plus accrued interest and other

charges, or;

• Adjusted world price (AWP).

The AWP is the prevailing world market price 

adjusted to U.S. quality and location. Separate 

AWPs for long grain, medium grain rice and upland 

cotton are announced weekly.

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September 2020
September 2020

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Commodity Certificate Exchange

Commodity certificates are available to producers 

to exchange collateral pledged to CCC for a MAL. 

Commodity certificates will be available for 

sale at USDA Service Centers to producers with 

outstanding nonrecourse MALs. The exchange rate 

will be the AWP for upland cotton or rice, the NPP 

for peanuts, or the PCP for other commodities, as 

applicable on the date the commodity certificate 

is purchased. Realized gains from the certificate 

exchange gains equal the amount by which the 

loan rate exceeds the repayment rate. 

For further information, see the Commodity 

Certificate Exchange (CCE) fact sheet at www.fsa.

usda.gov/factsheets, contact a local USDA service 

center or visit the FSA website at www.fsa.usda.

gov/pricesupport.

 Marketing Loan Gains

A producer receives a marketing loan gain if the 

MAL is repaid at less than the loan principal. The 

marketing loan gain rate equals the amount by 

which the applicable loan rate exceeds the MAL 

repayment rate.

Commodity loan gains received from the 

commodity certificate exchange are not subject 

Adjusted Gross Income (AGI) provisions.

Loan Deficiency Payment

A producer who is eligible to obtain a MAL, but who 

agrees to forgo the MAL, may obtain an LDP under 

certain market conditions. The LDP rate equals the 

amount by which the applicable loan rate where 

the commodity is stored exceeds the effective MAL 

repayment rate for the respective commodity. The 

LDP amount equals the LDP rate times the quantity 

of the commodity for which the LDP is requested. 

Table 4 provides an example of how MLGs and 

LDPs are calculated.

Other Requirements

Production Evidence

A producer who repays a MAL at less than the loan 

rate plus accrued interest and other charges, or 

receives an LDP, may be subject to a spot check and 

must provide production evidence acceptable to 

CCC, such as evidence of sales, warehouse receipts, 

or load summary or assembly sheets.

Adjusted Gross Income Limitation

Producers or legal entities whose average AGI 

exceeds $900,000 are not eligible for marketing 

loan gains or LDP payments; but are eligible for 

MALs that must be repaid at principal plus interest 

to repay the loan or exchanged with a commodity 

certificate exchange if the lower alternative 

repayment rate is below the established loan rate. 

Payment Limitations

LDPs and marketing loan gains available for 

crop years 2019 through 2023 are not subject to 

payment limitation, including actively engaged in 

farming.

More Information

To learn more about commodity certificates, 

visit fsa.usda.gov/pricesupport or contact your 

local FSA office. To find your local FSA office, visit 

farmers.gov/service-center-locator.
Final Loan/LDP Availability Date Commodity

Jan 31 Peanuts, Wool, Mohair and LDP only for Unshorn Pelts

March 31 Barley, Canola, Crambe, Flaxseed, Honey, Oats, 

Rapeseed, Seed Cotton, Sesame seed and Wheat

May 31 Corn, Cotton (bales), Dry peas, Grain sorghum, Lentils, 

Mustard seed, Long grain rice, Medium grain rice, 

Safflower, Small chickpeas, Large chickpeas, Cotton, 

Soybeans and Sunflower seed

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September 2020

Table 1. Final Loan/LDP Availability Dates by Commodity

Table 2. National Loan Rates, 2019-2023 Crops (per production unit)

Commodity Production Unit 2019 -2023

Wheat bushel $3.38

Corn bushel $2.20

Grain Sorghum bushel $2.20

Barley bushel $2.50

ELS Cotton pound $0.9500

Upland Cotton pound *

Oats bushel $2.00

Long Grain Rice cwt $7.00

Medium Grain Rice cwt $7.00

Soybeans bushel $6.20

Other Oilseeds cwt $10.09

Dry Peas cwt $6.15

Lentils cwt $13.00

Small Chickpeas cwt $10.00

Large Chickpeas cwt $14.00

Wool, graded pound $1.15

Wool, nongraded pound $0.40

Honey pound $0.69

Peanuts ton $355.00

Mohair pound $4.20

* The upland cotton loan rate is the simple average of the adjusted prevailing world price

for the 2 immediately preceding marketing years, but not more than 52 cents per pound nor

less than 45 cents per pound, and may not equal less than 98 percent of the loan rate for the

base quality of upland cotton for the preceding year. The loan rate for the 2020 crop year was

announced October 9, 2019, at 52 cents per pound.
Facts Accrued Interest for Loan A

Applicable Interest 2.250%

Loan Principal $1,000

Scenario 1 Scenario 2 Scenario 3

Days Loan Outstanding 90 120 150

Days in a Year 365 365 365

Accrued Interest $5.55 $7.40 $9.25

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Table 3. Accrued Interest Calculation Examples

Table 4. Marketing Loan Gain/Loan Deficiency Payment Examples

County A MAL Repayment Rate Scenario

($ per bushel)

Loan Rate 1.95

Scenario 1 Scenario 2 Scenario 3

Loan Rate Plus Interest 1.98 1.98 1.98

Effective Posted County Price (PCP) 2.05 1.90 1.98

MLG or LDP Rate 0.00 0.05* 0.00

*Does not include accrued interest of $0.03.