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Reminder to Submit 2018 Year End Financial Data for Supervised Credit

 

November 7, 2018



FSA Direct Loan borrowers are reminded of their responsibility (per loan closing conditions) to submit 2018 yearend financial data to their local FSA office. This includes the following:

• Year end or current balance sheet

• Profit and loss

• Complete copies of both corporate and personal tax returns of all entity members – many producers had extensions to file their returns from the disaster last year

• Proof of current insurance coverage on all assets pledged as security for the FSA loans.

FSA Direct Loans are considered a temporary source of credit that is available to producers who do not meet normal underwriting criteria for commercial banks. The FSA team will help borrowers identify their goals to ensure financial success. Through this process, FSA staff will assist borrowers in developing strategies and a plan to meet your operation’s goals and graduate to commercial credit. Ultimately, the borrower is responsible for the success of the farming operation, but FSA’s staff will help in an advisory role to provide the tools necessary to help you achieve your operational goals and manage your finances.

It is crucial for borrowers to communicate with their farm loan staff when changes occur and it is the borrower’s responsibility to alert FSA to any of the following:

• Any proposed or significant changes in the farming operation;

• Any significant changes to family income or expenses;

• The development of problem situations;

• Any losses or proposed significant changes in security

In addition, if a farm loan borrower cannot make payments to suppliers, other creditors, or FSA on time, contact your farm loan staff immediately to discuss loan servicing options. There are some benefits to FSA’s servicing options BEFORE the loans go delinquent and being proactive is important to being able to take advantage of them.

Failure to submit financial information when requested by FSA could result in acceleration of your loan accounts.

For more information on FSA farm loan programs, visit http://www.fsa.usda.gov.

USDA Commodity Loans Available to Montana Producers

Farm Service Agency reminds Montana producers that Marketing Assistance Loans (MALs) and Loan Deficiency Payments (LDPs) are available to help producers through periods of low market prices. The 2014 Farm Bill authorized MALs and LDPs for the 2014 to 2018 crop years.

MALs provide interim financing and allow producers to delay the sale of the commodity at harvest-time lows and wait until more favorable market conditions emerge. A producer who is eligible to obtain a loan, but agrees to forgo the loan, may obtain an LDP if such a payment is available.

The Final Availability Date for Loans and Loan Deficiency Payment (LDP) for 2018 Mohair, Unshorn Pelts (LDP only) and Wool is Feb. 1, 2019. The Final availability date for Loans and LDPs for 2018 Barley, Canola, Crambe, Flaxseed, Honey, Oats, Rapeseed, Wheat and Sesame Seed is April 1, 2019.

FSA offices are accepting requests for 2018 MALs and LDPs for all eligible commodities after harvest.

Before MAL and LDP disbursements can be made, producers must meet the requirements of actively engaged in farming, cash-rent tenant and member contribution. In order to meet eligibility requirements, producers must retain beneficial interest in the commodity, meaning they have control of the commodity or a title to the commodity, until the MAL is repaid or the Commodity Credit Corporation takes title to the commodity.

The 2014 Farm Bill also establishes payment limitations per individual or entity not to exceed $125,000 annually on certain commodities for the following program benefits: Agriculture Risk Coverage and Price Loss Coverage payments, Marketing Loan Gains and LDPs. These payment limitations do not apply to MAL disbursements.

Producers or legal entities whose total applicable three-year average adjusted gross income exceeds $900,000 are not eligible for Marketing Loan Gains and LDPs, but are eligible for MALs repaid at principal plus interest.

For more information, please visit your local FSA office or http://www.fsa.usda.gov. To find your local USDA service center, visit http://www.farmers.gov.

 
 

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