December 13, 2002
December 13, 2002
For more information:
Peter Orwick, 303-771-3500, x 33
Judy Malone, Communications, 303-771-3500, x 35, email@example.com
Laura Gerhard, Communications, 303-771-3500, x 30, firstname.lastname@example.org
? American wool producers can sign up for wool loan deficiency payments (LDP) administered by the U.S. Department of Agriculture?s (USDA) Farm Service Agency (FSA). The new six-year Farm Bill of 2002 allows eligible growers the ability to apply for benefits immediately.
Applications for either a loan or a LDP must be completed by January 31 of the year following the year the wool is sheared. For the 2002 wool clip, an exception to the rule was made; producers who sold their wool prior to Oct. 11, 2002, may still apply for a LDP until Jan. 31, 2003. Producers who still own their 2002 wool must sign up before they sell the wool and by the Jan. 31, 2003, deadline. In subsequent years, all growers interested in applying for either a loan or a LDP must complete the application prior to losing beneficial interest or selling the wool. Producers who sell their wool the day of shearing, should complete a 709 Form prior to shearing to protect their eligibility.
Wool growers are already benefiting from this new law, however, many of the specific details of the program are yet to be published. The American Sheep Industry Association (ASI) has been fielding a large number of questions regarding the program and several of the basic details are available: (1) the Farm Bill established loan rates of not more than $1.00 per pound for graded wool and not more than $.40 per pound for ungraded wool. These are loan rates, not payment rates, so producers should anticipate a LDP that is lower than the loan rate; (2) the term ?graded wool? has been defined by Congress as a core test from an approved laboratory made available to determine the micron and yield of the wool. Congress included a non-graded payment specifically for producers with wool clips that are not large enough to warrant the expense of a core test; and (3) the individual price a grower received from the market will not determine the LDP. The LDP will be determined by the overall market quotes based on the world-adjusted prices for wool.
The USDA has informed ASI that it will publish and make available to all producers the complete details of the program in the near future. Included in that package will be the loan process and documentation necessary for unshorn pelt credit.
?We expect the pelt credit to apply only to unshorn slaughter lambs rather than feeder lambs,? stated ASI president Frank Moore. ?Additionally, I would expect wool loans to be available on a farm-stored basis. Without question, the LDPs in 2002 will vary dramatically from the beginning of the year to current since the wool market saw an average increase of 70 percent throughout the year. Wool sold prior to the market jump will realize a larger LDP since the market was lower than it is today.?
In closing, Moore reminds producers who sold their 2002 wool that it is crucial for them to visit their FSA office and make application for the LDP before Jan. 31, 2003.
ASI is national organization supported by state sheep associations, benefiting the interests of nearly 64,000 U.S. sheep and goat producers.