Sheep Industry News December 2023

Making the Most of USDA Assistance Programs S mall upticks in the Australian wool market this fall were nice, but there’s no disputing the fact that wool prices aren’t where American sheep producers would like them to be as we head Q: When do I need to apply for an LDP? A: Producers should talk to FSA before selling wool, and ideally, before shearing. LDPs are available until Jan. 31 after the wool is shorn. You choose what day to take the LDP rate on. Prices change weekly and you can find current rates at SheepUSA.org/resources woolldp.

into 2024. Even with some gains in October, Australian wool prices were still down more than 12 percent from that same time in 2022 – which wasn’t a stellar year by any stretch of the imagination. The U.S. Department of Agriculture’s Marketing Assistance Loans and Loan Deficiency Program can help producers offset low er wool prices. In 2022, the LDP program paid out more than $5.5 million to American wool growers. Think of the program as an “on the spot” price payment for low wool prices. But like any govern ment program, there are things you need to know if you plan to make a claim. Producers should consult with their local Farm Service Agency office now to make plans for their 2024 wool clip. Marketing Assistance Loans and Loan Deficiency Program payments are marketing tools available during harvest or shearing. MALs provide interim financing at harvest time to help agricul tural producers meet cash flow needs without having to sell their commodities when market prices are low. This enables producers to delay selling the commodity until more favorable market condi tions emerge. Alternatively, LDP provisions specify that in lieu of securing a MAL, producers may elect to receive an LDP. An LDP is the differ ence the producer would have received if a loan was repaid at the lower market price – a direct benefit

Q: Should I get a graded or ungraded LDP? A: Both programs require the wool to be weighed. Graded prices are reported on a clean basis, while ungraded wool is reported on a grease basis. The graded program requires producers to also provide a core test report/certificate from a CCC-approved testing facility. Currently, only the New Zealand Wool Testing Authority is approved. Growers can participate in graded or ungraded programs – or a combination of both. You are free to choose the option that is most beneficial to you. For example, a grower could choose to use the graded program for his/her fleece wool and ungraded for off-sorts, such as tags, crutchings, bellies and pieces. The MAL rate is estab lished yearly for graded wool in eight micron categories. The MAL rate for ungraded wool is set at 40 cents per pound greasy. Q: I sell my wool through a wool pool. Can I get an LDP? A: Yes. Ungraded and Graded LDP’s are available for wool destined to wool pools. MALs are not permitted as delivery to a pooling location is considered the day that growers lose beneficial interest of the wool. Q: I’m not able to sell my wool through a wool pool this year. Can I still get an LDP? A: Yes, you can still be eligible for an LDP and there are multiple ways to show how much wool you produced. Types of evidence accepted include: copies of sales documents; weight or scale tickets from a commissioned agent or CCC-approved third party; delivery evidence; core test reports or certificates; settlement sheets; invoices or kill sheets from the lamb slaughter company for unshorn pelt LDPs; etc. Learn more at SheepUSA.org/wp-content/uploads/2023/02/ LDP-Production-Evidence.pdf. Producers should also consult their local FSA office to confirm. Q: Am I able to get an LDP for my pelts? A: Producers can also collect an LDP on unshorn slaughter lamb pelts. To be eligible, a producer must meet the definition of an eli gible producer, own the lambs for at least 30 days before slaughter, sell the unshorn lamb for immediate slaughter or slaughter the unshorn lamb for personal use, have beneficial interest in the pelts, sheep must be of U.S. origin, the pelt must be unshorn, and submit production evidence.

that does not need to be repaid. MAL repayment and LDP provisions are in tended to minimize potential delivery, storage and related costs of agricul tural commodities to CCC. The provisions also are designed to avoid discrepancies

in marketing loan benefits across states and counties and to allow domestically produced commodities to be marketed freely and competitively. You can learn more about these programs at SheepUSA.org/ resources-woolldp. In the meantime, here are answers to some common questions about the LDP program.

Additional Online Resources SheepUSA.org/wp-content/uploads/2023/02/USDA-Wool-Marketing-Loan-Programs-overview.pdf FSA.USDA.gov/Assets/USDA-FSA-Public/usdafiles/FactSheets/mal_ldp_fact_sheet.pdf

12 • Sheep Industry News • sheepusa.org