Graded Wool LDP
November 11, 2005
November 11, 2005 -- Wool Loan Deficiency Payment (LDP) rates for graded wool have been slowly increasing over the last couple months. Producers applying to the program could now find it financially beneficial to participate in the graded program instead of the ungraded program.
"Wool with at least a 50-percent yield in most of the LDP micron categories may well pay better on the graded program," according to Peter Orwick, American Sheep Industry Association executive director. "We encourage producers that have not yet filed to look at both rates and file on your 2005 wool by the end of January."
FSA offices have the weekly posting of LDP rates for both graded and ungraded wool. Producers are reminded that graded rates apply to pounds of clean wool. This is computed from the producer's wool information based on a core test. Fiber diameter, to determine micron category, and the clean-yield percent are the two key factors required to apply for a graded LDP payment, whereas test information is not required for the ungraded LDP.
"For many growers, this is the first time since the program began that it would be to their financial advantage to participate in the graded LDP option over the ungraded," concluded Orwick.
The LDP rate table can also be accessed at: http://www.fsa.usda.gov/dafp/psd/mohair.htm.
Staff contact: Peter Orwick, ext. 33