Eligible producers can obtain peanut loans through their local FSA county offices or alternative delivery partners (DMA’s – Designated Marketing Associations, and CMA’s – Cooperative Marketing Associations). These loans provide producers with interim financing on their production, and facilitate the orderly distribution of loan-eligible peanuts throughout the year.
The 2014 Farm Bill established the national loan rate for peanuts at $355 per ton, which is unchanged from the previous farm bill. CCC calculated the price support levels for each peanut type using the same method as last year. CCC uses the national loan rate and five-year average quality factors, along with a three-year simple average weighted production. The rates take effect Aug. 1, 2018, the beginning of the peanut crop year. For an average grade ton of 2018-crop peanuts, loan levels by type are:
Runner-type peanuts 354.49 per ton
Spanish-type peanuts 345.84 per ton
Valencia-type peanuts 359.80 per ton
Virginia-type peanuts 359.80 per ton
CCC applies premiums and discounts for quality factors to compute the loan value for an individual ton of peanuts. The actual loan level depends on the percent of various sizes of kernels in each ton. CCC uses the percentage of sound mature kernels (SMK) and sound splits to compute the basic loan value of the load. SMKs are whole kernels that pass over the testing screen officially designated for each type of peanut. Sound splits are whole kernels split into two pieces. Excess sound splits receive discounts. There are discounts for other kernels, damaged kernels and foreign materials. An additional discount occurs for loose shell kernels. Other quality discounts also may apply.
For each percent of SMK in a ton of peanuts, plus each percent of sound splits, the loan levels are:
Runner-type peanuts 4.806 per percent
Spanish-type peanuts 4.782 per percent
Valencia-type peanuts 5.398 per percent
Virginia-type peanuts 4.902 per percent