WASHINGTON, April 16, 2018 – The U.S. Department of Agriculture’s
Farm Service Agency (FSA) today announced the 2018-crop loan rate
differentials for upland and extra-long staple cotton.The
differentials, also referred to as loan rate premiums and discounts,
have been calculated based on market valuations of various cotton
quality factors for the prior three years. This calculation procedure is
identical to that used in past years, with the exception of a reduced
discount applied to color white, leaf 8 upland cotton. The Commodity
Credit Corporation adjusts cotton loan rates by these differentials so
that cotton loan values reflect the differences in market prices for
color, staple length, leaf, extraneous matter, micronaire, length
uniformity and strength.
The 2018-crop differential schedules are
applied to 2018-crop loan rates of 52.00 cents per pound for the base
grade of upland cotton and 79.77 cents per pound for extra-long staple
cotton. The 2014 Farm Bill stipulates that the upland cotton loan rate
range between 45-52 cents per pound based on the simple average of the
Adjusted World Price for the 2 marketing years preceding sowing of the
ensuing year’s crop. The loan rate provided to an individual cotton bale
is based on the quality of each individual bale as determined by
Agricultural Marketing Service classing measurements.
Source: The Chicago Tribune, U.S.A Tuesday, 17 April 2018