By Blake Jackson
Missouri cotton producers may qualify for Loan Deficiency Payments (LDPs) from the USDA Farm Service Agency (FSA).
LDPs offer financial support to producers who forgo Marketing Assistance Loans in exchange for a payment on their eligible commodities. The application deadline for 2024 crop-year cotton LDPs is May 31, 2025.
“Under current market conditions, Loan Deficiency Payments can provide cash flow and help cotton producers stabilize farm income and manage risk,” said P. Jeremy Mosley, Deputy State Executive Director in Missouri.
LDPs are activated when the adjusted world price (AWP) for cotton falls below the loan rate. For 2024, the loan rate for base quality upland cotton is $0.52 per pound. Extra-long staple cotton is ineligible for these payments.
To qualify for an LDP, producers must hold beneficial interest in the upland cotton, meaning they possess title, control, and responsibility for the commodity.
A completed LDP Agreement and Request, form CCC-633EZ, Page 1, must be on file at the local FSA office before losing beneficial interest.
Page 3 of the CCC-633EZ form is required when requesting payment but must be submitted by May 31 of the year following the normal harvest.
LDPs are not subject to payment limitations, actively engaged in farming, or cash-rent tenant rules; however, adjusted gross income provisions do apply.
Additional eligibility requirements may exist, and producers are advised to contact their local FSA office for comprehensive information. This program helps Missouri cotton farmers manage financial risks by providing vital cash flow during market fluctuations.
Categories: Missouri, Crops, Government & Policy