On any given day, farm operators and others can get grain price quotes from the CME Group, also known as the Chicago Board of Trade (CBOT), in “real-time” on their computer or I-phone. Almost as quickly, they can get current and future corn and soybean market price quotes from local grain elevators, ethanol plants, and processing plants. The difference between the local grain price and the CBOT price is known as “basis”. Understanding how basis works and the seasonal trends associated with basis can be an important factor in making corn and soybean marketing decisions.
• Contract month --- Local harvest price quotes for corn and soybeans would correspond to the December CBOT corn futures price and the November CBOT soybean futures price. By comparison, storing the corn or soybeans after harvest and selling the grain via a forward contract in June or early July the following. More specifically, “basis” is the difference between the local grain price quote on a specific date and the CBOT price for the corresponding futures Summer would have the basis level determined by the July CBOT corn or soybean futures.
A “narrow” or “tighter” basis means that the local corn or soybean price is nearer or getting closer to the corresponding CBOT price, while a “wide” or “widening” basis reflects local grain prices that have a greater margin below the CBOT prices. In most instances, farmers in the Upper Midwest deal with “negative” basis levels, which means than local corn and soybean prices are lower than the corresponding CBOT prices. Areas near the Mississippi River ports or in the Southern U.S more typically have “positive” basis levels, where local grain prices are actually higher than CBOT prices. However, there were several areas of the Upper Midwest that had “positive” basis levels for corn and soybeans at certain times from 2021 until 2023.
While the definition of basis may seem quite simple, having a good understanding of basis can be quite complex. Basis can be highly variable at different locations in a region on any given day and can vary throughout the year, or suddenly be adjusted due to changing dynamics in grain market fundamentals. Following are the main factors that affect basis and can lead to changes in basis levels:
· Geographic Variations--- Corn and soybean basis can vary greatly from location-to-location, largely dependent on the amount of the local grain production to be used as livestock feed or for use in processing and ethanol production. Therefore, basis levels tend to be wider in Western Minnesota and the Dakota’s than in Southern Minnesota and Iowa, which have a high amount of livestock production, as well as several ethanol plants and soybean processing plants.
· Transportation Costs --- This is the cost of shipping grain from the point of local sale to the final destination point, whether it be for use within the U.S. or transported to the ports to be shipped for exports to other countries. For example, areas that utilize a large percentage of the corn and soybean production in the local area have less grain to be transported to the ports or to other portions of the U.S. In addition, being closer to the Mississippi River, an important port, or a major rail line tends to reduce transportation costs and result in tighter basis levels.
· Supply and Demand --- The overall U.S. grain supply, based on crop production in a given year and grain carryover levels from the previous year, along with the grain usage for livestock feed, processing, ethanol production, and exports, can result in year-to-year variations in basis levels. For example, the 2021 and 2022 corn and soybean basis levels in many areas were tighter than normal due to the strong demand for exports to China and increased domestic demand for livestock feed and processing. However, the increases in and corn and soybean acreage and higher yields, along with uneven domestic demand and export levels, has resulted in basis levels widening to more typical “harvest-time” levels in 2024 and 2025. Poor crop yields or strong demand in a local area can also affect the local basis level in a given year.
· Storage and Interest Costs --- In a normal year, both CBOT corn and soybean futures prices and cash prices tend to be the lowest at harvest time and then increase by the summer months in the following year. As the time gets closer to the actual date of delivery for the grain, the storage and interest costs typically decrease, and the basis tends to narrow; however, this does not always occur. At any time during the year, depending on local demand, cash grain prices may be relatively strong compared to the CBOT prices, which may result in tighter basis levels. This was the case in 2021 and 2022, when a combination of lower-than-average crop yields, together with strong demand for corn and soybeans, kept basis levels fairly tight throughout the year in many portions of the Upper Midwest. However, this scenario has been much different for most of 2024 and 2025 when the U.S. has had larger supplies of corn and soybeans.
There are many grain marketing tools available for farm operators to utilize in addition to cash sales, including a variety of hedging, options, and basis contracts. Generally, a hedging or options contract locks in the CBOT futures price, but not the cash price, meaning that the farmer still has basis risk. For example, a “hedge-to-arrive” contract locks in a CBOT futures price but does not finalize the basis until the futures contract is cleared and the grain is actually delivered and sold at the local level. By comparison, a “basis contract” locks in the basis but keeps the final price open depending on changes in the corresponding CBOT futures price at the time of delivery or when setting the final price.
The current 2025 basis levels for corn and soybeans in Southern Minnesota have been quite wide in recent months and are more typical of “harvest-time” basis levels that existed prior to 2021 and 2022. Recent 2025 harvest basis levels for corn in much of the Upper Midwest ranged from about $30 to $.60 per bushel under the CBOT December corn futures price, with basis levels in much of North & South Dakota and Northwest Minnesota exceeding $.70 per bushel. Soybean basis levels ranged from about $.40 to $.70 per bushel under the CBOT price in much of Iowa, Southern Minnesota and Wisconsin, eastern South Dakota and eastern Nebraska. Fall harvest basis levels are $.75 per higher at many locations in the balance of South Dakota and Nebraska, the northern half of Minnesota and Wisconsin, and all of North Dakota. Basis levels are slightly tighter near corn and soybean processing plants in some areas.
The wider “harvest-time” basis levels for corn and soybeans during harvest season in the past couple of years is certainly something to factor into post-harvest grain marketing decisions in the next few months. If corn and soybean futures prices rally after harvest season and basis levels remain quite wide, it will likely encourage the use of more “hedge-to-arrive” contracts for the summer months of 2026. This will allow producers to reduce their “price risk” on the stored grain, while still being able to take advantage of potential basis improvement that may occur between the post-harvest months and the Summer of 2026. On the other hand, if localized basis levels tighten for a short-term period of time after harvest due to disappointing 2025 crop yields and strong local demand, it may be a time to use a “basis contract” to lock-in the basis level. This will allow a producer to take advantage of the tighter basis levels and still have some upside potential in the corn or soybean market into next Spring.
Most grain marketing strategies, including storing unpriced grain in a bin on the farm, involve some level of price and/or basis risk. Understanding the dynamics of basis in corn and soybean market prices is a key element in analyzing the various types of grain marketing contracts that are available to farm operators. Many grain marketing advisors do a very good job of explaining the dynamics of basis and how that interacts with grain marketing strategies. Iowa State University has some good information available on understanding basis and explaining various grain marketing strategies. This information is available on the “Ag Decision Maker” website at: https://www.extension.iastate.edu/agdm/cdmarkets.html.
For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group Phone --- (507) 381-7960; E-mail --- [email protected]

The September 12 USDA National Ag Statistics Service (NASS) Crop Report adjusted the projected 2025 U.S. average yields for both corn and soybeans slightly lower from the August estimates; however, both the corn and soybeans yields would still be at record level. USDA also increased the expected 2025 harvested acreage for both corn and soybeans in the September report from earlier reports, which basically offset lower yield projections. The end result was very little change from the August report in the estimated overall 2025 corn and soybean production levels. Some grain marketing analysts feel that the USDA corn yield and production estimates may be a bit high, given some of the late season dryness and disease pressure that is affecting the 2025 crops in some areas.
The grain market response for corn and soybean futures prices on the Chicago Board of Trade (CBOT) following the report was fairly positive. This would seem to indicate that most of the USDA estimates were already calculated into the CBOT prices, and that there were other factors influencing the grain markets. These factors could include some questions by grain traders regarding the NASS yield projections in some States and prospects for potential trade agreements with China and other countries. The latest NASS yield estimates were based on U.S. crop conditions as of September 1st; and were the first 2025 USDA yield estimates that included actual field data.
The September 12 USDA Report projects the 2025 U.S. average corn yield at the record level of 186.7 bushels per acre, which was decreased from 188.8 bushels per acre in the August report. The projected 2025 national corn yield compares to the current record yield of 179.3 bushels per acre in 2024, 177.3 bushels per acre in 2023, 173.3 bushels per acre in 2022, and 177 bushels per acre in 2021. A year ago, USDA estimated the average corn yield at 183.6 bushels per acre in the September report; however, the final 2024 average yield was 4.3 bushels per acre below that level. USDA estimated 2025 harvested corn acreage in the U.S. at 90 million acres, which included estimates from crop acreage certification data filed by producers through the USDA Farm Service Agency (FSA) offices. This was an increase of 1.3 million acres from the August estimate, and compares to 82.9 million harvested acres in 2024. USDA is now estimating total U.S. corn production for 2025 at the record level of just over 16.8 billion bushels, which would be a 13.1 percent increase from the 2024 production level of just under 14.87 billion bushels;
USDA is estimating Minnesota’s 2024 average corn yield at the record level of 199 bushels per acre, which is a decrease of 3 bushels per acre from the August estimate. The projected 2025 corn yield compares to the very low 2024 average yield of 174 bushels per acre, 185 bushels per acre, in 2023, and the current record average yield of 195 bushels per acre in 2022. The NASS report also lowered Iowa’s projected 2025 average corn yield by 3 bushels per acre to 219 bushels per acre, which would still be a record statewide average yield. This compares to final average yields of 211 bushels per acre in 2024, 201 bushels per acre in 2023, and 200 bushels per acre in 2022.
USDA is projecting Illinois to have a 2025 corn yield of 219 bushels per acre, compared to 217 bushels per acre in 2024; Indiana at 205 bushels per acre, compared to 198 bushels per acre in 2024; Nebraska at 191 bushels per acre, compared to 188 bushels per acre in 2024; and South Dakota at 167 bushels per acre, compared to 164 bushels per acre in 2024. The 2025 corn yield estimates in some other States include, North Dakota at 145 bushels per acre, compared to 149 bushels per acre in 2024; Wisconsin at 184 bushels per acre, compared to 174 bushels per acre in 2024; and Ohio at 194 bushels per acre, compared to 177 bushels per acre in 2024.
The USDA Report on September 12 estimated total 2024 U.S. soybean production at just over 4.3 billion bushels, which would be down slightly from the 2024 soybean production of just under 4.37 billion bushels. USDA projected the 2025 U.S. average soybean yield at the record level of 53.5 bushels per acre, which was lowered by 0.1 bushels per acre from the August report. The 2025 NASS soybean yield estimate compares to final U.S. soybean yields of 50.7 bushels per acre in 2024, 50.6 bushels per acre in 2023, 49.5 bushels per acre in 2022, and 51.4 bushels per acre in 2021. The record national average soybean yield was 52 bushels per acre back in 2016. The USDA 2025 soybean yield projection was very close to the average yield estimates by grain trading analysts.
USDA is estimating Minnesota’s 2025 average soybean yield at the record level of 53 bushels per acre, which is unchanged from the August estimate. The 2025 yield projection compares to recent statewide yields of 45 bushels per acre in 2024, 48 bushels per acre in 2023, 50 bushels per acre in 2022, and 47 bushels per acre in 2021, as well as the current record statewide soybean yield of 52.5 bushels per acre in 2016. The Iowa’s estimated 2025 soybean yield is at the record level of 65 bushels per acre, which is up by 2 bushels per acre from the August estimate. The 2025 estimated yield compares to 60 bushels per acre in 2024, 58 bushels per acre in 2023, 58.5 bushels per acre in 2022, and the current record yield of 62 bushels per acre in 2021.
The projected 2025 yields in major soybean producing eastern Corn Belt States include Illinois at 65 bushels per acre, compared to 64 bushels per acre in 2024; Indiana at 61 bushels per acre, compared to 59 bushels per acre in 2024; and Ohio at 58 bushels per acre, compared to 50 bushels per acre in 2024. Most soybean yields in the Western Corn Belt States are expected increase from 2024 yield levels. Soybean yield estimates for 2025 include Nebraska at 61 bushels per acre, compared to 57.5 bushels per acre in 2024; South Dakota at 47 bushels per acre, compared to 43 bushels per acre in 2024; and Wisconsin at 55 bushels per acre, compared to 48 bushels per acre in 2024. North Dakota is projected to decline slightly at 37 bushels per acre in 2025, compared to 37.5 bushels per acre in 2024.

SEPTEMBER 12 WASDE REPORT
The USDA World Supply and Demand Estimates (WASDE) was also released on September 12, which included the projected adjustments in the 2025 U.S. corn yield and production levels that were referenced earlier. The report projects an increase in the corn usage levels during 2025-26 marketing year, as compared to the 2024-25 corn usage levels. Corn use for livestock feed is expected to increase by 425 million bushels in 2025-26 and corn use for ethanol is projected to increase by 165 million bushels. U.S. corn export levels for 2025-26 are estimated at 2.97 billion bushels, which is up from the estimated export total of 2.83 billion bushels for 2024-25 and 2.25 billion bushels in 2023-24. Corn export levels have been fairly strong in recent months.
The U.S. corn ending stocks for 2025-26 are projected at 2.11 billion bushels, which would be an increase of 59 percent from the estimated carryover of 1.32 billion bushels for 2024-25. The latest 2025-26 corn ending stocks projection would also be considerably higher than the final corn carryover levels of 1.76 billion bushels in 2023-24, 1.36 billion bushels in 2022-23, 1.38 billion bushels in 2021-22, and 1.23 billion bushels in 2020-21.
The higher level of projected 2025-26 corn ending stocks continues to put considerable pressure on the corn price projections for the 2025-26 marketing year, which extends from September 1, 2025, through August 31, 2026. USDA is estimating the average on-farm corn price for the 2025-26 marketing year at $3.90 per bushel, which is unchanged from the August report. The 2024-25 national average corn price, which will be finalized on September 30, 2025, is estimated at $4.30 per bushel, which compares to previous final average prices of $4.55 per bushel in 2023-24, $6.54 per bushel in 2022-23, $6.00 per bushel in 2021-22, and $4.53 per bushel in 2020-21.
The recent WASDE report projected 2025-26 soybean ending stocks at 300 million bushels, which is an increase of 10 million bushels from the August estimate. The 2025-26 estimated soybean ending stocks are slightly lower than the final estimated 2024-25 ending stocks of 330 million bushels and the 2023-24 ending stocks of 342 million bushels. Other recent soybean ending stocks levels of 264 million bushels for 2022-23 and 274 million bushels in 2021-22. Soybean exports for 2025-26 are projected at 1.68 billion bushels, which would be down from the estimated 1.87 billion bushels for 2024-25 and compares to 1.7 billion bushels in 2023-24. There is some concern that the 2025-26 export level could drop even lower, unless China starts to book purchases of the 2025 U.S. soybean crop.
USDA is projecting the average on-farm soybean price for the 2025-26 marketing year at $10.00 per bushel, which is $.10 per bushel lower than the August price estimate. The 2024-25 estimated final national average soybean price is also $10.00 per bushel, which compares to national average prices of $12.40 per bushel in 2023-24, $14.20 per bushel in 2022-23, $13.30 per bushel in 2021-22, and $10.80 per bushel for 2020-21.
For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group Phone - (507) 381-7960; E-mail - [email protected]

Due to the strong yield potential in many areas of the Upper Midwest, the number of corn and soybean producers that qualify for 2025 crop insurance indemnity payments may be limited. However, there are portions of the region that have dealt with excessive rainfall and severe storms during July and August that has caused damage to crops. There has also been some dryness in some portions of the eastern Corn Belt and other areas, along with an early frost threat in northern parts of the region. These weather issues could result in yield reductions on some farms across the region, which together with potential price declines from the crop insurance Spring base prices on March 1, could increase the likelihood of 2025 crop insurance indemnity payments for some producers. 
With Federal Crop Insurance, every year is different, and with the multiple options available to producers, there are many variable results from crop insurance coverage at harvest time. The 2025 crop year will be no different, with some producers choosing Yield Protection (YP) policies (yield only), Revenue Protection (RP) policies (yield and price) and RPE policies (RP policies without harvest price protection). Producers also carry different levels of insurance coverage on various crops. There is further variation, with some farmers having “optional units” for their crop insurance coverage while other farmers insure with “enterprise units”. In addition, some producers also have enhanced insurance coverage through private insurance companies, or through the “Supplemental Crop Option” (SCO) and “Enhanced Coverage Option” (ECO) policies that were available. 
In the Midwest, most corn and soybean producers in recent years have tended to secure some level of revenue (RP) crop insurance coverage, rather than standard yield-only (YP) policies. Farm operators like the flexibility of the RP policies that provide insurance coverage for reduced yields, as well as in instances where the harvest price drops below initial base price. RP policies also offer enhanced insurance coverage in instances when the harvest price rises above the initial Spring price. 
The crop insurance harvest prices for corn and soybeans are based on the average Chicago Board of Trade (CBOT) price for December corn futures and November soybean futures, during the month of October, with the harvest prices being finalized on November 1. The Spring base prices for corn and soybeans are based on the average CBOT prices for December corn futures and November soybean futures during the month of February. The final harvest prices are used to calculate the value of the 2025 harvested crops for all revenue protection (RP) and RPE crop insurance policies. The harvest price is also used determine the revenue guarantee for the RP policies that include harvest price protection, if the harvest price is higher than the base price. The base price is used to determine revenue guarantees for all RPE insurance policies and for RP policies when the Spring price is lower than the final harvest price, which appears likely for both corn and soybeans in 2025 at this time. 
The established Spring base prices for 2025 YP, RP, and RPE crop insurance policies were $4.70 per bushel for corn and $10.54 per bushel for soybeans. These base prices will be the payment rate for 2025 YP policies for corn and soybeans. These base prices will also likely serve as the final price to calculate revenue guarantees for determining potential RP and RPE crop insurance indemnity payments for corn and soybeans in 2025, based on current harvest price estimates (as of 9-08-25). If the harvest price for corn rises to $4.70 or higher, or the soybean harvest price rises to $10.54 or higher, then the harvest price would be used to calculate potential RP Indemnity payments; however, the Spring price would be used for any RPE policies. 
The 2025 harvest price estimates (as of 9-0-25) are near $4.15 per bushel for corn and $10.25 per bushel for soybeans. The harvest price will be used to calculate the final revenue amount for all revenue protection (RP) and revenue protection with harvest price exclusion (RPE) policies for corn and soybeans. Since the harvest price for corn and soybeans appears likely to be lower than the base price, it is highly probable that 2025 indemnity payments will begin at higher final farm yield levels than the RP insurance policy level. 
For example, on an 85% RP policy on corn, with a 200 bushel per acre APH yield and a $4.15 per bushel harvest price, 2025 crop insurance indemnity payments would begin at a yield of 192.5 bushels per acre (near 96.2 percent of the APH yield). If the harvest price increases to $4.35 per bushel, the payments would begin at a yield near 184 bushels per acre (near 92 percent of the APH yield). Based on the final soybean harvest price estimate of $10.25/bu. and an APH yield of 60 bushels per acre, with an 85% RP insurance policy, crop insurance indemnity payments would begin at 52.4 bushels per acre (near 87.4% of the APH yield). If the final harvest price increases to $10.55 per bushel or higher, indemnity payments would begin near 51 bushels per acre (very near 85% of the APH yield), and be calculated at the final harvest price. 
Optional Units versus Enterprise Units 
Farm operators in areas with variable yield losses on different farm units that chose “optional units” for their 2025 crop insurance coverage rather than “enterprise units” may be in a more favorable position to collect potential indemnity payments on this year’s crop losses. “Enterprise units” combine all acres of a crop in a given county into one crop insurance unit, as compared to “optional units”, which allow producers to insure crops separately in each township section. Traditionally, more crop producers have opted for “enterprise units”, due to lower crop insurance premium levels; however, there has been an increase in the selection of “optional units” more recently. Many crop losses in 2025 will likely be highly variable from farm-to-farm in the same County, which will favor the “optional units” for collecting any potential crop insurance indemnity payments. 
For example ……assume that producers A and B both have 5 separate farms in the same county with an APH corn yield of 200 bushels per acre, and that the overall average 2025 corn yield on all farms was 195 bushels per acre. However, three of the farms were 215 bushels per acre each, and the other two farms were 175 bushels per acre each. Also assume a final corn harvest price of $4.10 per bushel. Producer A has an 85% RP policy with optional units and producer B has an 85% RP policy with enterprise units. Producer A, with the optional units, would receive no insurance payment on the three farms with the higher yield; however, that farmer would receive an indemnity payment of $82 per acre on the two farms with the lower yield. Producer B with the enterprise units would receive no insurance payments on any farms, based on the average yield for all farms. 
Producers that have crop revenue losses in 2025, which could result in potential crop insurance indemnity payments, should properly document the yield losses, regardless of their type or level of insurance coverage. Farm operators that collect very large indemnity payments should be aware that they may be subject to an audit, which may require more detailed documentation of losses. It is important for producers who are facing crop losses in 2025 to understand their crop insurance coverage and the calculations used to determine crop insurance indemnity payments. 
A reputable crop insurance agent is the best source of information to make estimates for potential 2025 crop insurance indemnity payments or to find out about documentation requirements for crop insurance losses, as well as to evaluate future crop insurance options. Details on various crop insurance policies can be found on the USDA Risk Management Agency (RMA) website at: https://www.rma.usda.gov/. 
Kent Thiesse has prepared an Information Sheet titled “2025 Crop Insurance Payment Potential”, which is available by contacting: [email protected]. The University of Illinois FarmDoc web site also contains some good crop insurance information and spreadsheets to estimate crop insurance payments. The FarmDoc web site is located at: https://farmdoc.illinois.edu/crop-insurance 
For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group Phone - (507) 381-7960; E-mail - [email protected] 

Commodity Credit Corporation (CCC) commodity loans on harvested corn, soybeans and wheat were regularly used by farm operators in the 1990’s and early 2000’s, as well as from 2015 to 2019, as a grain marketing tool. The use of CCC commodity loans dropped off considerably from 2008-2014 and again from 2020-2023, when grain prices reached their highest levels in many years. As farmers prepare for the 2025 harvest season, the use of marketing assistance loans (MAL’s), which are the same as the previous CCC commodity loans, has taken on more significance as an option in setting up post-harvest grain marketing and cash flow plans for corn and soybeans.
 
The Marketing Assistance Loans (MAL’s) are originated through county Farm Service Agency (FSA) offices after the grain has been harvested and are 9-month loans from the time of origination. A marketing assistance loan can be established both on farm stored grain and on grain in commercial storage with a warehouse receipt. Producers receive the value of the loan at the time the MAL loan is established. The loan can be repaid at any time during the 9-month loan period, by repaying the amount of the loan principal plus the accrued interest.
 
The 2018 Farm Bill established national loan rates for the various commodities that are eligible for the marketing assistance loans; however, the Reconciliation Bill by Congress increased all national loan rates by 10 percent for 2026.  Following are the 2025 MAL national loan rates for common crops in the Upper Midwest:

• Corn --------- $2.20 per bushel  ($2.42/bu. in 2026)
• Soybeans ---  $6.20 per bushel  ($6.82/bu. in 2026)
• Wheat ------- $3.38 per bushel  ($3.72/bu. in 2026)
• Barley ------- $2.50 per bushel  ($2.75/bu. in 2026) 
• Oats ---------  $2.00 per bushel  ($2.20/bu. in 2026)
• Grain Sorghum --- $2.20 per bushel  ($2.42/bu. in 2026)

 
The county loan rates are then adjusted higher or lower than national rates, based on local commodity price differentials compared to national price levels. Following is the range of 2025 County corn and soybean loan rates for MAL’s in the Upper Midwest States:

• Minnesota --------  Corn = $2.02 to $2.14/bu.;  Soybeans = $5.86 to $6.16/bu.
• Iowa ---------------  Corn = $2.07 to $2.30/bu.;  Soybeans = $6.07 to $6.33/bu.
• Nebraska ----------  Corn = $2.05 to $2.28/bu.;  Soybeans = $5.82 to $6.18/bu.
• South Dakota -----  Corn = $2.04 to $2.21/bu.;  Soybeans = $5.69 to $6.12/bu.
• North Dakota -----  Corn = $2.00 to $2.21/bu.;  Soybeans = $5.69 to $5.99/bu.
• Wisconsin ---------  Corn = $2.04 to $2.21/bu.;  Soybeans = $6.07 to $6.26/bu.

 
The MAL loan interest rate is adjusted monthly and is set up at one percent above the CCC borrowing rate from the U.S. Treasury. The interest rate on MAL loans is fixed for the entire term of the 9-month MAL, except for a potential CCC interest rate adjustment on January 1. The current interest rate on marketing assistance loans (as of 8-01-25) is 5.0 percent, which compares to an interest rate of 8 to 9 percent for short-term financing at many commercial ag lending institutions. Producers only pay interest for the time that the MAL is in place. (Example --- a $500,000 MAL corn loan at 5.0 percent interest for 180 days = $12,500 interest payment for 6 months, which compares to $21,250 on a similar loan at 8.5 interest for 180 days).
 
Farm operators have the flexibility to place grain under a MAL at a local FSA office any time after the grain has been harvested, so they could take out the MAL in November or December, 2025, or wait until after January 1, 2026. Producers also have the flexibility to treat the commodity loan as either “income” or as a “loan” when the loan proceeds are received. Either of these decisions can have income tax implications, depending on how and when the loan proceeds are received. It is best to consult with a tax advisor before determining the timing and the preferred method of receiving the loan proceeds.
 
If commodity prices drop to levels that are lower than county loan rates, eligible producers would potentially be eligible to release the grain that is under a marketing assistance loan at a rate that is lower than the county loan rate. FSA issues a “posted county price” (PCP) for commodities that are eligible for MAL’s, which are updated and posted daily at local FSA offices, or available on county FSA websites. If the PCP is lower than the county loan rate, the producer could realize a “marketing loan gain” (MLG), if the grain is released at that lower PCP. (Example --- a producer places corn under a MAL at $2.10 per bushel, a few months later the PCP is $1.90 per bushel, resulting in the potential of a marketing loan gain of $.20 per bushel on the day the corn loan is released.)
 
If the PCP drops below the county MAL loan rate, producers also have the option to collect a loan deficiency payment (LDP) on a commodity, in lieu of putting the grain under a commodity loan. The LDP calculation is similar to the calculation for marketing loan gains. Grain that is already under a commodity loan is not eligible for a LDP, and a LDP can only be utilized once on the same bushels of grain. There has not been significant LDP eligibility for corn and soybeans since the early 2000’s and we do not anticipate any LDP opportunities for the 2025 corn and soybean crop that is being placed in storage.  
 
Producers must be eligible for USDA farm program benefits and must have submitted an acreage report at the FSA office for 2025 to be eligible for marketing assistance loans on this year’s crop production. Producers must maintain “beneficial interest” in the grain while it is under a MAL. Beneficial interest means that the producer maintains control and title of the commodity while it is under a commodity loan. Farmers should contact their local FSA office to release any grain that is under a marketing assistance loan before it is delivered to market (“call before you haul”).
 
Following are some reasons that farm operators may want to consider utilizing marketing assistance loans (MAL’s) as part of their grain marketing and cash flow strategies:

• Provides short-term credit at relatively low and stable interest rates.
• Loan funds can be used to pay post-harvest expenses and land rental payments for the current year or for prepaid crop inputs (seed, fertilizer, etc.) for the following crop year.
• Loan funds can also provide the necessary funds to make year-end or January principal and interest payments on term loans and real estate loans.
• Allows a producer to receive partial compensation for corn and soybeans during or following the Fall harvest season, when commodity prices are traditionally lower than average.
• Allows a producer the flexibility to market the grain in future months after the grain has been placed under a MAL, including forward pricing the grain for future delivery (remember that the commodity loan must be satisfied at the FSA office before the grain is delivered.)
• Commodity loans can also be used by livestock producers that plan to feed the corn or other grain, which is followed by just releasing the grain that is under loan as it is fed to livestock.
• If commodity prices decline below the county CCC loan rates, the grain that is under loan can be released at the lower price, or producers can collect a loan deficiency payment (LDP).

 
In Minnesota, FSA offices file a Central Notification System (CNS) form with the Minnesota Secretary of State Office on all grain used as security for a marketing assistance loan. These forms are similar to the CNS forms that are filed by ag lenders for farm operating loans to guarantee the transfer of funds when grain or livestock is sold to cover outstanding loan balances.
 
For further information on USDA marketing assistance loans (MAL’s) and county loan rates for various commodities, farm operators should contact their local FSA office, or go to the following website:
https://www.fsa.usda.gov/programs-and-services/price-support/Index
 
For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group
Phone - (507) 381-7960; E-mail - [email protected]