Marketing Assistance Loans (MALs) and Loan Deficiency Payments (LDPs) are available for producers of graded and non-graded wool, mohair and unshorn pelts. The final loan/LDP application date for wool sheared or unshorn lambs slaughtered in 2023 is Jan. 31, 2024.
MALs and LDPs are marketing tools available during shearing and provide interim financing to help producers meet cash flow needs without having to sell their commodities when market prices are low; enabling producers to delay selling until more favorable marketing conditions emerge. LDPs are payments made to producers who, although eligible to obtain an MAL, agree to forgo the loan in return for a payment on the eligible commodity.
To be eligible for a wool or mohair MAL or LDP, producers must produce and shear eligible mohair and wool in the U.S. during the applicable crop year and must:
•comply with conservation and wetland protection requirements.
•report all cropland acreage on applicable farms where the eligible commodity is produced.
•have and retain beneficial interest in the commodity until the MAL is repaid or the Commodity Credit Corporation (CCC) takes title to the commodity, and;
•meet Adjusted Gross Income (AGI) limitations.
Unshorn pelts are eligible for LDPs only. In addition to the criteria above, producers of unshorn pelts must have sold the unshorn lamb for immediate slaughter or slaughter the lambs for personal use.
LDPs and marketing loan gains are not subject to payment limitation, including actively engaged in farming and cash rent tenant provisions.
In addition to producer eligibility, the loan commodity must have been produced and shorn from live animals by an eligible producer, be in storable condition, and meet specific CCC minimum grade and quality standards. Producers are responsible for any loss in quantity or quality of the wool or mohair pledged as loan collateral.
To retain beneficial interest, the producer must have control and title of the wool, mohair or unshorn pelt. If beneficial interest in the commodity is lost, the commodity loses eligibility for an MAL or LDP and remains ineligible even if the producer later regains beneficial interest. The producer must be able to make all decisions affecting the commodity including movement, sale and the request for an MAL or LDP.
Producers may repay an MAL any time during the loan period at the lesser of the loan rate plus accrued interest and other charges or an alternative loan repayment rate, the national posted price, which is announced weekly. Visit the Farm Service Agency (FSA) website for posted loan and LDP rates.
