The American Soybean Association (ASA) is urging Agriculture Secretary Dan Glickman to maintain the crop year 2000 national average soybean loan rate at $5.26 per bushel to provide an adequate safety net for farmers next year. The Federal Agriculture Improvement and Reform (FAIR) Act of 1996, provides discretionary authority under which Secretary Glickman is not required to reduce the soybean loan rate from its present level.

"ASA is appealing to Secretary Glickman to help soybean producers work through this time of historically low commodity prices," said ASA President Marc Curtis, a producer from Leland, Miss. "ASA’s Board of Directors passed a resolution on Dec. 13, calling for a contin-uation of the national average soybean marketing loan at $5.26 per bushel for the 2000 crop. Any reduction in the loan rate would come directly out of the pockets of U.S. soybean producers."

Based on the soybean loan rate formula under the FAIR Act, the loan rate could be set at $5.13 for the 2000 crop. The formula uses a 5-year "Olympic" average price, which disregards the highest and lowest years. The floor is set at $4.92 and the cap is set at $5.26, which was the prevailing rate for crop years 1997, 1998, and 1999.

"ASA has repeatedly urged both Congress and the Administration to act on a number of commitments made to farmers when the FAIR Act was passed that would enhance prices and improve profitability for growers," Curtis said. "Inasmuch as those commitments have not been fulfilled, soybean producers will continue to depend heavily on the income safety net provided by the marketing loan assistance program in the 2000-2001 marketing year."

Supplies of soybeans, soybean oil and soybean meal remain high, and are projected to rise even higher during the year 2000. Carryover stocks of soybeans next September are estimated by USDA at 395 million bushels, with supplies of soybean oil placed at 2.1 billion pounds. With these heavy surpluses, average soybean prices received by farmers are forecast to fall from an already low $4.70 per bushel for 1999 to $4.25 per bushel for the 2000 crop.

"When ASA agreed to support the FAIR Act, we were told that Fast Track legislation would be enacted and that WTO trade negotiations would open new markets for U.S. soybeans and soy products," Curtis said. "We were promised aggressive use of export promotion and credit guarantee programs, additional funding for P.L. 480 and other humanitarian food assistance programs, and reform of unilateral economic sanctions that restrict agricultural exports."

Since 1996, when the FAIR Act was enacted, ASA has continued to press for increased funding for agricultural research, elimination of estate taxes, and relief from undue regulatory burdens to help producers better manage their farms.

"Farmers were counting on improved management tools," Curtis said, "including a better federal crop insurance program and enactment of Farm and Ranch Risk Management (FARRM) accounts that allow producers to put aside revenue from good years to help them when times are tough. In our view, the lack of significant action on this agenda in the last four years is a major cause of current and projected low soybean prices and soybean producer income from the marketplace.

"The FAIR Act is only part of the ‘Freedom to Farm’ concept, and until we get the whole package resolved, farmers are going to continue to depend on the marketing loan," Curtis said.