USDA announces peanut loan rates for 2005

USDA's Commodity Credit Corporation (CCC) has announced individual 2005-crop loan rates for four types of peanuts, as required by the 2002 farm bill. The method of computing the price support levels per peanut type is the same as last year. The calculations are based on the national average loan rate of $355 per ton, using the five-year average quality factors and a three-year simple average weight production.

The 2005-crop peanut loan levels and grades are computed based on the type, quality and location of the 2005 peanut crop.

The loan levels by type for an average-grade ton of 2005-crop peanuts are:

  • Runner-type peanuts — $355.35.
  • Spanish-type peanuts — $342.24.
  • Valencia-type peanuts — $355.24.
  • Virginia-type peanuts — $355.24.

To compute the loan value, premiums and discounts are applied within a load of peanuts based on applicable quality factors. The actual loan level for an individual lot of peanuts depends on the percent of the various sizes of the kernels in each ton of peanuts.

The factors used for calculations include the premium sound mature kernels (SMK) or base, which is the greatest value of the load. The percent of SMKs are whole kernels passing across the testing screen officially designated for each type of peanut. The base SMKs are discounted for sound split (SS), or whole kernels that are split into two pieces; other kernels (OK); damaged kernels (DK); and foreign materials (FM). An additional discount occurs for loose shell kernels (LSK).

For each percent of SMK in a ton, including sound split kernels, the loan levels are:

  • Runner-type peanuts — $4.829.
  • Spanish-type peanuts — $4.805.
  • Valencia-type peanuts — $5.201.
  • Virginia-type peanuts — $4.926.
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