The research team assigned probabilities to various price outcomes and compared the expected values of each of the two alternatives. The results favored the loan program. A third choice would be for producers to take the LDP and store the grain, but then use the futures market to lock in a July price. Whether or not this option returns more than the expected value of putting the grain under loan will depend on the July futures quote in comparison with current cash prices. When the July futures is close to the current price, it won't be possible to lock in a premium and the loan program will dominate.
Producers are almost always better off putting their grain in the loan program.
The rules surrounding these programs are complex. Economists at ISU say it's important for producers to work closely with their local Farm Service Agency officials before harvest to make sure they understand the rules and have completed the proper forms.