Episode 28 - Structure of the USDA-FSA Farm Loan Program and 2025 Financial Update

In the latest episode of Morning Coffee and Ag Markets, Riley and Ryan dive into the Federal Reserve’s recent rate cuts and how these monetary policy shifts affect agriculture. With fewer cuts expected in 2025, they discuss the potential pressure on farmers' margins and what that means for on-farm profitability. They also explore the USDA-FSA Farm Loan Program, highlighting low-interest borrowing options for farmers navigating financial uncertainty. Tune in for expert insights into how economic trends and farm management strategies intersect in 2025.

Transcript

00;00;07;21 - 00;00;10;24
Riley Smith
Recording. But anyway you ready to get kicked off?

00;00;10;27 - 00;00;12;26
Dr. Ryan Loy
Let's get this kicked off my man.

00;00;12;29 - 00;00;33;18
Riley Smith
All right. Good morning. Good morning. Welcome to another episode of Morning Coffee and AG Markets with your host, Riley Smith. Today we got Ryan Loy. Doctor Ryan Loy on a zoom call again. This time he is stateside. He is back from California. We've got him back in. Actually, you're at your house right now, aren't you getting.

00;00;33;18 - 00;00;35;05
Dr. Ryan Loy
I am on annual leave.

00;00;35;08 - 00;00;49;01
Dr. Ryan Loy
That's right. I am, for this week, I'm going on a on a little hog hunt with some family members I go on every year. So I always look forward to this time. And it's usually around this time on the weekend, so hopefully it won't be too cold. That's what I'm looking. I hope it won't be frozen.

00;00;49;01 - 00;01;11;19
Riley Smith
I think it showed, 53 degrees here this weekend, Saturday, so I'm looking forward to it. I've been working out in the shop and very, very cold conditions. I have ran through two full propane tanks in my heater, and, you can definitely tell that just the little bit of heat goes a long ways, because when you run out, it gets extremely cold in that shop.

00;01;11;19 - 00;01;12;11
Riley Smith
Oh, yeah.

00;01;12;14 - 00;01;30;26
Dr. Ryan Loy
Oh, yeah. No, it's it's it's kind of, it's frigid but it. Well it was funny as I had texted my family members and they're all in Nebraska, before they came down this week. And I said, oh, well, I'm glad it's looking like it's warming up a bit because it's frozen down here right now. And the only reply I got was from my uncle, and it was a screenshot of what the weather is up there in Omaha.

00;01;30;28 - 00;01;33;27
Dr. Ryan Loy
And when he sent that yesterday it was -11.

00;01;33;29 - 00;01;39;22
Riley Smith
So I did, you see, did you see where south Louisiana supposed to get a blizzard?

00;01;39;25 - 00;01;41;08
Dr. Ryan Loy
They did. No they did.

00;01;41;10 - 00;01;41;22
Riley Smith
They did.

00;01;41;22 - 00;01;46;29
Dr. Ryan Loy
I didn't they're they're like snow, snow plow in in New Orleans right now.

00;01;47;01 - 00;02;05;08
Riley Smith
You know what I get? I got cracked up the other day. I told Cil I said, you know, I said, it's funny to me. I said, it's not like a haha, you know, real funny. But I said, you always hear about global warming. I said, now you're looking us in south Louisiana getting snow. Yeah, it's like maybe we're going in the reverse of that.

00;02;05;12 - 00;02;23;02
Dr. Ryan Loy
Global global cooling, global warming frighten me. Well, you know, it's like I would I don't want either of those two things. I just want median temperatures. I but but now anyway. That's good. And I, we're talking today. I just wanted to, give our listeners a little bit of a, financial update, see what I think.

00;02;23;03 - 00;02;23;15
Riley Smith
Yeah.

00;02;23;22 - 00;02;25;24
Dr. Ryan Loy
You're some things like that.

00;02;25;24 - 00;02;42;08
Riley Smith
So you're talking about the, structure of USDA, FSA farm loan program in, just a 2025 financial update. So if you, want to kick this off, just giving us a financial update, and then we'll get into the nitty gritty of this stuff.

00;02;42;10 - 00;02;57;23
Dr. Ryan Loy
That's right. And I will, I'll keep this first part pretty brief for this financial update, only because you and I have talked about this several times. We up to this point at least, you know, for our regular listeners, we've talked about who the federal open market Committee is, what the fed does, what the federal funds rate does.

00;02;57;29 - 00;03;19;03
Dr. Ryan Loy
We've talked about all that stuff up to this point. If you have any questions on that, you're always welcome to reach out. I'd be happy to answer them. But essentially, a month ago, right around, the end of December, mid December, the Federal Reserve implemented its, final 2024 rate cut, which actually marks the third consecutive adjustment in 2024.

00;03;19;06 - 00;03;45;05
Dr. Ryan Loy
During their December meeting. The decision lowered the effective federal funds rate to 4.48%. Now, that is down from the peak that we've been dealing with for the past, about a year or two years, almost about 5.33%. And so we're call that federal funds rate at 5.33%. That's the interest rate that banks are going to charge each other to borrow for overnight reserve requirements and travel funds.

00;03;45;08 - 00;04;05;26
Dr. Ryan Loy
And if that is expensive, then it's going to be translated to expensive borrowing to consumers and borrowers like you and me. And so that's what we've seen in the last year and a half, and we've seen that come down to 4.48%. And so that marks about a 1% reduction in 2024. And with their meeting occurring next week, January 28th and 29th.

00;04;06;02 - 00;04;29;10
Dr. Ryan Loy
Really all eyes are on the fed right now. As they really figure out their strategy for this year. Regarding, you know, the frequency and the magnitude, the rate reductions this year. And so one of the things to really consider and what I why why I brought this up is not only are we in a better interest rate environment than we have been the last two years, but there's very importance about this.

00;04;29;16 - 00;04;53;12
Dr. Ryan Loy
There's something very important about the expectations for the Federal Reserve's decisions this year. And so when they begin cutting, the federal funds rate in September of last year, at that time, inflation was trending downwards. It hadn't hit that 2% mark that we've talked about on this show before, but it was getting very close to that. And as of this report, the inflation remains at 2.4%.

00;04;53;14 - 00;05;09;10
Dr. Ryan Loy
So I bring that up, because what we've seen is that we see that trajectory. And then September starting to go down to that 2%. We think it's going to hit the 2%. And it's ticked up just a tiny bit now. It hasn't ticked up extreme, but it's ticked up still above that 2%. It just won't go down to that 2%.

00;05;09;16 - 00;05;40;23
Dr. Ryan Loy
And that's the Fed's goal is to get it down to 2%. Well, since we've seen the last couple reports come out higher than expected for inflationary pressures in the marketplace, mean, they had initially, forecasted and by they, I mean the fed had forecasted four rate cuts in 2025 back in, November. And that would have brought by the end of this year that would have brought the federal funds rate down to 3.5%, essentially.

00;05;40;25 - 00;06;01;11
Dr. Ryan Loy
But now, in December, they actually revised that projection. And they're citing, very sticky inflation that will not cooperate and get down to that 2%. And they, were saying now that it's only going to be two rate cuts and there's no indication for what magnitude, you know, how big those rate cuts will be and when they will occur.

00;06;01;14 - 00;06;32;17
Dr. Ryan Loy
But based on those two rate cuts and based on what the federal, the fed chair has said, Jerome Powell, he has said that essentially by the end of 2025, now they're looking at an effective rate of about 3.9%, about 4%. So what does this mean? Well, that means that one, interest, is not going to give us as much reprieve this year as we had thought in that price creep, price squeeze on the interest expenses per acre may continue.

00;06;32;20 - 00;06;51;07
Dr. Ryan Loy
But it also has, implications for, you know, the prime rate and all of the interest rates that you pay. And so usually the prime rate, which is basically that bare minimum, that minimum interest rate that a bank will charge you to borrow loans for short term borrowing, usually sits about 3% higher than the federal funds rate.

00;06;51;07 - 00;07;18;22
Dr. Ryan Loy
And right now it sits at about 7.5%. And that's down from almost 9%. So it's getting there and it's going down. We will be paying less in interest this year. But how extreme will that interest decline be still is yet to be seen. And so because of that, I wanted to kind of talk about this and say, okay, you know, looks like interest is still going to be a major price squeeze.

00;07;18;25 - 00;07;43;28
Dr. Ryan Loy
Expense item for producers this year. But I wanted to, you know, talk about some things surrounding the USDA farm Loan program. You know, given the uncertainty surrounding these current monetary policy decision decisions, such as raising and lowering the interest rates, it's important to highlight an alternative, you know, low interest borrowing option for farmers and that low interest borrowing option for farmers is the USDA FSA farm loan program.

00;07;44;01 - 00;08;08;19
Dr. Ryan Loy
Now, I would imagine that our listeners, are familiar with the FSA program, if they're not already involved. However, there are some, you know, kind of, you know, intricate things, and it can be kind of confusing at times as to why, you know, farm loan programs, they offer and what would fit best for their farming enterprise. And so the remainder of our newsletter this week just kind of goes into a deeper dive on direct and guaranteed loans.

00;08;08;22 - 00;08;32;00
Dr. Ryan Loy
Now, direct loans or loans directly from the FSA and guaranteed loans or loans through a commercial lender. But you're backed by the FSA so you get more favorable interest rates. The direct loans have, favorable interest rates. I looked, and they are updated every month, and I believe they're about five and a, 5.5% right now, which is which is significantly which is great.

00;08;32;00 - 00;08;52;20
Dr. Ryan Loy
I mean, that's that's right about that. Fed funds rate low. That's subprime. So that's good. You know, that's lower than the prime rate than what you'd get a commercial lending. And on the guaranteed farm side of things you are going through a commercial lender. However, that commercial lender is more willing to give you a favorable interest rate and a loan structure because the FSA is backing and guaranteeing your loan.

00;08;52;20 - 00;09;09;09
Dr. Ryan Loy
In the case of default. So those are two big things that the FSA has to offer to look into for low interest options to fund the operation this year. One of the things that I think, you know, we could talk about, but it's it's kind of a laundry list. And I included it in our newsletter for folks to read.

00;09;09;11 - 00;09;33;03
Dr. Ryan Loy
And as a matter of fact, I've got a fact sheet that's being, pushed through publications right now that'll that'll discuss a lot of this stuff and mostly talking about eligibility requirements, because that's a big deal. You know, a lot of, denials or withdrawn in those loans happened because maybe somebody wasn't eligible when they thought they were, or maybe somebody thought they needed the money and they really didn't.

00;09;33;06 - 00;09;55;08
Dr. Ryan Loy
Well, the FSA has many options, so maybe you don't need you know, you don't need a full operating loan. Maybe you just need a micro loan. Right. And so that way you're not borrowing as much. You're not paying back as much. So I encourage our readers and our listeners to check out the newsletter this week. And check out the fact sheet that'll be coming out soon from the University of Arkansas.

00;09;55;08 - 00;10;15;12
Dr. Ryan Loy
And it details, it gives details and specific examples for all the farm loan programs from the USDA, and it lists, eligibility requirements for those loans to see if you fit that. And if you have any questions, you're welcome to reach out to me. My contact information is listed all around this podcast. Reach out to Riley and he can contact me as well.

00;10;15;14 - 00;10;23;17
Dr. Ryan Loy
Or you can visit farmers.gov. Locate your local service center that's closest to you and talk to them in person that way.

00;10;23;19 - 00;10;44;08
Riley Smith
Now I do want to bring up something that I was looking over the newsletter, that will be posted Monday. I noticed that you put the loan at the USDA loan assistance tool in there. Does that that will help. That will help with the, process of getting, seeing if you're eligible for a loan, right?

00;10;44;15 - 00;11;05;27
Dr. Ryan Loy
Yes. That's right. And thank you for bringing that up, because there's something very important with that, too. That I don't indicate in the newsletter here, but I do talk about it in the fact sheet that's going to be coming. The loan assistance tool. So as Riley mentioned, is exactly that. So you go to the the loan assistance tool website and you're going to be brought to a landing page where you look at your eligibility.

00;11;05;27 - 00;11;24;19
Dr. Ryan Loy
So essentially you go through a questionnaire and the system based on your questionnaire kind of tailors the loan application to what you need. So you put in your demographics, you put in what you need. And the the system will say, oh, it looks like a micro loan is good for you. It looks like a farm ownership loan. Direct is good for you.

00;11;24;21 - 00;11;55;03
Dr. Ryan Loy
And it will take you to the online application. And you can actually apply for FSA funds through that online application. However, a very important thing to consider the current as it currently stands, the online applications only open to individuals or married persons who file and who file jointly. Those are the only two entities that are available. So if you have a corporate structure, you still need to go into the FSA office.

00;11;55;06 - 00;12;19;17
Dr. Ryan Loy
Secondly, to consider is if you're going to do the online application, you have to go through what's known as E authentication. And essentially what that means is that you have to verify your identification. And the system online does not always work. So service centers for the FSA have what's known as la Res, okay. And what they do is essentially verify your identity.

00;12;19;17 - 00;12;39;18
Dr. Ryan Loy
But they have to have that LRE license to do it. So reach out to your local service center if that happens to you. The authentication is not working for you. Reach out to your service center, see if they have an Laura. Go meet with them in person. Verify your identity, and then you could, then you're you should be fine to go do the online application.

00;12;39;20 - 00;12;59;13
Riley Smith
Good. Y'all will, hopefully everyone listening will go check out the newsletter. If you think that you may or may not be eligible for foreign loan, this will help you either, prepping and getting preparation of a farm loan if you haven't already got one. Does that include an operating loan as well?

00;12;59;16 - 00;13;16;28
Dr. Ryan Loy
Yes it does. So direct direct loans from the FSA have an option of operating ownership. You can get land contract loans. You can get a lot of stuff. But essentially from a 30,000ft view, operating and ownership operating notes are of course for operating expenses and then partnerships for real estate, you know.

00;13;17;01 - 00;13;22;27
Riley Smith
And would you mind going through, an example of, of ownership versus, operating loan?

00;13;23;02 - 00;13;24;04
Dr. Ryan Loy
Absolutely.

00;13;24;07 - 00;13;47;07
Dr. Ryan Loy
Absolutely. So a quick example of a farm ownership loan. And thank you for asking this question. Really. So farm ownership loans are offered by the FSA and they can be used for the purchase. They can be used for the purchase or expansion of a farm, the construction or improvement of farm buildings, closing cost or the implementation of soil and water conservation practices.

00;13;47;12 - 00;14;21;03
Dr. Ryan Loy
So it kind of just those loans, those ownership loans. And I'm talking from the perspective of direct loans here. And recall, the direct loans are directly from the FSA. It would be very similar to a guaranteed loan. So essentially those ownership loans are for the improvement and maintenance of your land, and your farming enterprise, essentially, they are available up to a maximum of $600,000 directly through the FSA, with micro loan options, small, offered for smaller scale needs.

00;14;21;03 - 00;14;30;23
Dr. Ryan Loy
So again, there's micro loan. There's microloan counterparts to almost all of these loans to ensure that there's, you know, you don't have to borrow that much if you don't need it.

00;14;30;26 - 00;14;32;21
Riley Smith
So I want to stop here real quick

00;14;32;23 - 00;14;33;04
Dr. Ryan Loy
please

00;14;33;07 - 00;14;39;00
Riley Smith
I have a question. So and it might be just, you know, lack of education, but might be a dumb question I don't know.

00;14;39;00 - 00;14;40;10
Dr. Ryan Loy
But there's no dumb questions. Riley.

00;14;40;10 - 00;14;58;23
Riley Smith
Like, so when you talk about a micro-loan and on on a micro loan within the ownership loan, okay. On the ownership side, I would say you said it's, more pushed a ownership loan is more used. Is mostly used for real estate development.

00;14;58;25 - 00;14;59;03
Dr. Ryan Loy
Yep.

00;14;59;03 - 00;15;03;26
Riley Smith
So expansion that or the expansion or bettering your, your property.

00;15;03;28 - 00;15;04;09
Dr. Ryan Loy
Yeah.

00;15;04;09 - 00;15;15;21
Riley Smith
So in that case would that be say if you this summer wanted to do a micro loan project, would an example of that be like, say dirt panning or something like,

00;15;15;23 - 00;15;17;20
Dr. Ryan Loy
Zero grading those sorts of things?

00;15;17;20 - 00;15;19;01
Dr. Ryan Loy
Absolutely, absolutely.

00;15;19;06 - 00;15;41;10
Riley Smith
I was just talking about micro loaning. I was like, well, we're in land development. Where would that be considered? I mean, because most of the time when you talk about, you know, land development, you're talking about multiple thousands of dollars. Oh, yeah. You know, some of them even bigger than that. I didn't know in the case of what what an example of a micro-loan where where you would use a micro loan in farming.

00;15;41;12 - 00;16;01;25
Dr. Ryan Loy
So for this in this case for the ownership, you know, the maximum of 600,000. So you could say that's obviously for a large family farm. Right. But let's say for example, there's a specialty crop grower who who's just interested in putting up a new hoop house or fixing a hoop house that he has, but he doesn't need to, or that person, he or she does not need to borrow that much.

00;16;01;25 - 00;16;23;10
Dr. Ryan Loy
Right? So they have the micro loan options which have which carry different interest rates because it is a lower amount and essentially the amount of the micro loan is the same between the operating in the ownership. However, it's just what you're allowed to use it for. So you do have to, you know, verify with the FSA at the end, you know, what was this used in accordance with what we laid out in the terms.

00;16;23;10 - 00;16;32;08
Dr. Ryan Loy
So, you know, I can't go get a $50,000 micro loan and go to Disney World, right? And if I do that, the FSA is going to be a little upset.

00;16;32;11 - 00;16;42;26
Riley Smith
Well, and then once again, that might have been a dumb question, but I know that for some of our listeners, they may have been like well. You know, I've never used a micro, what do you use a micro-loan for?

00;16;42;28 - 00;16;48;00
Dr. Ryan Loy
I think I micro loans are becoming a little bit more popular, especially in the environment we're in.

00;16;48;02 - 00;16;48;14
Riley Smith
Right.

00;16;48;16 - 00;17;09;16
Dr. Ryan Loy
Because you don't, you know, it's it's kind of the a delicate balance, right? You don't want to borrow more than you really have to because you're paying interest expenses. Because we're not talking about lines of credit here. These are these are loans that lines of credit. So, those are two distinct, different things. Operating lines of credit may be a better option than micro loans.

00;17;09;19 - 00;17;14;28
Dr. Ryan Loy
Although I'm not 100% sure you can get a line of credit through the FSA. I don't believe you can.

00;17;15;00 - 00;17;19;19
Riley Smith
What do you what do you think? You would get a better interest on a micro loan than you would,

00;17;19;22 - 00;17;32;21
Dr. Ryan Loy
You should, you should. You should be able to. In fact, I'll pull up that. We're talking. You're.

00;17;32;24 - 00;18;00;23
Dr. Ryan Loy
Yeah. So right now, as it stands, it farm operating loans director at 5.125%. Farm ownership loans in 5.625%. And so you can see that, it would be me. It's just so much lower. Then then what? You would be, then what you're dealing with in the commercial lending, world, however, again, what's important here is just understanding that there are certain eligibility requirements.

00;18;00;25 - 00;18;19;19
Dr. Ryan Loy
And those are the things to kind of review. And, again, if you go to the online assistance tool, you don't even have to start a loan and you to just go through that loan assistance tool without any authentication before you start the actual loan process and work on your eligibility and determine those sorts of things.

00;18;19;21 - 00;18;27;11
Riley Smith
Let's switch gears real quick. And let's talk about farm operating loans.

00;18;27;14 - 00;18;54;25
Dr. Ryan Loy
Absolutely. So the farm operating loans, very similar to the ownership loans, they just carry a different, you know, maximum amount and they carry different, requirements for what it's used for. So farm operating loans are available for, you know, operating expenses, machinery and equipment purchases, minor real estate repairs, something maybe like a fence, or improvements in debt refinancing.

00;18;54;25 - 00;19;19;08
Dr. Ryan Loy
So if you need to refinance some debt, you can put that into an operating loan. And you can refinance with that. So direct operating loans can be for amounts up to about 400,000. Again, micro loan options are offered here through the FSA. And they'll guarantee so on the guaranteed side of things on the operating loan, they'll guarantee operating loans to commercial lenders for amounts up to 2.25 million.

00;19;19;15 - 00;19;38;20
Dr. Ryan Loy
So, you know, again, like I said, if you're doing the direct loan, you you have a maximum amount you can really you can really take from the FSA. That's that's fixed 400,000. But if you go to the commercial lending round, you can probably get more than 400,000 if you needed it. But the FSA is only going to back you up to 2.25 million.

00;19;38;20 - 00;19;58;28
Dr. Ryan Loy
So if you go over 2.25 million, you're you're on the hook for the losses. Essentially. And those repayment terms vary based on the loan purpose. But operating loans cannot exceed seven years. And that is a little bit different than form of ownership loans which carry about a 40 year maximum term. So again, it's it's the size of those purchases.

00;19;58;28 - 00;20;19;22
Dr. Ryan Loy
Right. That you in time you're going to pay them off. So to qualify for direct operating loans, you know, applicants must have a laundry list of eligibility plus demonstrate sufficient education, training, or at least one year of experience managing or operating a farm within the last five years. Now, to get that eligibility, there are many ways to do that.

00;20;19;25 - 00;20;41;23
Dr. Ryan Loy
Through the FSA office, they can have you do trainings. If you have a college degree in an agricultural field, you have the experience right there that counts as one of your years. And so there's a lot of intricacies with this. So if anybody has any questions, I'm willing to, to, to take those questions and, and kind of dive deeper into this.

00;20;41;25 - 00;21;00;16
Riley Smith
We're good. If y'all have any questions, please reach out to Doctor Ryan Loy. If you if you can't get Ahold of him and you can find my email or my phone number, you can get Ahold to me and I will pass the information along. Doctor Loy, if you want to, let's talk about eligibility requirements just a little bit.

00;21;00;16 - 00;21;02;22
Riley Smith
And, we'll wrap this thing up.

00;21;02;24 - 00;21;22;18
Dr. Ryan Loy
Absolutely. So there are some eligibility requirements that are kind of, you know, obvious I guess is the word and don't necessarily mean it obvious in a, in a bad way. But some are pretty easy to kind of check the box, others not necessarily. Right. And so, to really be eligible, you know, borrowers must be a family farmer.

00;21;22;18 - 00;21;44;06
Dr. Ryan Loy
So they have to be a family farm, okay? They have to have acceptable credit history. Now, acceptable credit history means that you you are delinquent on a bunch of things and you don't have an abysmal credit score, but maybe your credit score isn't good enough to go get reasonable rates at commercial lenders. So the FSA is going to help you here and kind of establish that better credit history.

00;21;44;09 - 00;22;09;26
Dr. Ryan Loy
You need to be a citizen of the United States. That includes Puerto Rico, U.S. Virgin Islands, American Samoa, all those territories. But you need to be a citizen of the United States. Or you can be a US noncitizen national or qualified alien under federal immigration law. So there are some there are some differences there. You know, if you're neither one of neither one of those three things, then you won't be eligible just based off that alone.

00;22;10;02 - 00;22;30;08
Dr. Ryan Loy
Okay. One of the most important things is that you need to be unable to obtain credit from other sources at reasonable rates and terms to meet needs. Now, depending on your FSA office, depending on your state and depending on the relationship you have with your FSA lender, the the the checks and balances for that are going to be a little bit different.

00;22;30;08 - 00;22;53;10
Dr. Ryan Loy
So if they know you, they know you know who you are and they know that you've tried to go get, you know, a loan in a commercial lender, they may not require you to show proof, but other lenders may. If this is a new thing, they may say, hey, we need proof. I need a letter from the bank saying they're not going to take you water at this rate just to show that, hey, you know, this, that I really do need this.

00;22;53;12 - 00;23;14;06
Dr. Ryan Loy
Another thing is you need to have no outstanding federal debt, you know, minus like, student loan debt, I believe, is one that they are okay with, medical debt now, as a few weeks ago, is no longer on your credit score. So I think medical and, and student debt are our, excuse from that. But if you have other ones, then that's it.

00;23;14;08 - 00;23;41;21
Dr. Ryan Loy
And then I think one of the most important ones too. And again, there is I'm really scratching the surface on eligibility requirements because again, they have these eligibility requirements because the FSA, their, their main job is to help farmers. Right. But the other thing they have to do is essentially be good stewards of tax money, because that's how they fund these loans from the direct side is, is it's taxable, it's taxpayer money that the federal government appropriates to them.

00;23;41;21 - 00;24;00;23
Dr. Ryan Loy
So they have to be good stewards of it and make sure that the people that are getting it, you know, is a good investment one, and that they're supporting somebody who could be supported, otherwise. But one of the most important things to that, I think, is kind of in that top ten for the eligibility list is federal drug convictions, if you have any federal drug convictions.

00;24;00;23 - 00;24;19;28
Dr. Ryan Loy
And that includes cultivating, planting, distributing anything along those lines. And it's a federal conviction you're ineligible for, FSA. So very similar to, how like voting would work for a felon. Like you kind of get that right, taken away. Same thing here. So, those are kind of the ones that that's that's part of the list.

00;24;20;00 - 00;24;28;28
Dr. Ryan Loy
There's a more extensive list in the newsletter and on our fact sheet and in the newsletter, I will, link FSA is kind of handbook that they have.

00;24;29;02 - 00;24;29;11
Riley Smith
Right.

00;24;29;14 - 00;24;33;12
Dr. Ryan Loy
Yeah. That were kind of kind of released as a complement for the university of Arkansas.

00;24;33;15 - 00;24;34;04
Riley Smith
That’ll be good

00;24;34;06 - 00;24;35;10
Dr. Ryan Loy
Before too long.

00;24;35;12 - 00;24;55;26
Riley Smith
And, that fact sheet will be definitely come in handy here soon. What? So real quick, my thought is, what you said, you were talking earlier in you said that the feds are releasing a new update next week.

00;24;55;28 - 00;25;16;26
Dr. Ryan Loy
Yeah. So next week, they have their Federal Open Market Committee, and we've talked about them before on this show. I don't want to get too deep in the woods, but essentially, they're the ones who decide, where's my monetary policy headed? And they're the ones who essentially decide it. For all intents and purposes here they do a lot of other things, but they're the ones who decide what direction are we going to change interest rates?

00;25;16;26 - 00;25;30;04
Dr. Ryan Loy
Are we going to change them? Are we going to increase it, or are we going to decrease it? Or are we keeping it? You know, what are we going to do to it? They're the ones who decide that. And they meet. They meet every month mostly I think I think it's like nine times a year. They skip some months.

00;25;30;07 - 00;25;38;07
Dr. Ryan Loy
But yeah, they're ones next week with expectations that they may cut it. A quarter percentage point, hopefully.

00;25;38;10 - 00;25;41;25
Riley Smith
Yeah. I think everybody's hoping for a decrease in interest.

00;25;41;27 - 00;26;02;16
Dr. Ryan Loy
I would think so. I would think so. But you have to be careful not to get in too much of a macroeconomic discussion here, because we're running out of time on the zoom. But you know, the reason why we don't just cut it and bring it all the way down is because, you know, you do that and you could, based on the economic principles, reignite the inflation they fought for the last three years.

00;26;02;18 - 00;26;14;15
Dr. Ryan Loy
And so, hypothetically, if they move, if they misstep and they move too quickly one way or the other, they're going to erase all the work they've done. Like literally one misstep could erase.

00;26;14;17 - 00;26;16;04
Riley Smith
Yeah. You got to take small bites.

00;26;16;04 - 00;26;18;08
Dr. Ryan Loy
You got to take small bites.

00;26;18;10 - 00;26;37;06
Dr. Ryan Loy
That's right. And so that, you know, while all of us want that to happen, and I would love for us to get down much, much lower. They, they've got to be careful because otherwise, you know, we'll be in a worse shape in our economy and how, how much we can afford things, just based off of that kind of a decision.

00;26;37;08 - 00;26;40;05
Dr. Ryan Loy
One, because.

00;26;40;07 - 00;26;46;28
Riley Smith
I know it's a bad analogy, but it's kind of like ripping off a Band-Aid. Yeah. So can you pull the Band-Aid off too early? Yeah.

00;26;46;29 - 00;26;49;23
Dr. Ryan Loy
That's right, that's right. We don't want that to happen.

00;26;49;28 - 00;27;10;18
Riley Smith
Now, if you want to, Ian, to ease into that a little bit. That's right. You know he'll get it. Well. But, Doctor Loy appreciate you jumping on here. Giving financial update. Definitely the farm loan, the structure of the USDA, FSA, farm loan, program. I think that's something that is very useful for our, growers out there.

00;27;10;20 - 00;27;31;05
Riley Smith
And I'm going to say I'm not sure in this situation, in time, most people probably already have their operating loan set up for this year. But definitely everybody needs to go, if you don't already, go look at that loan assistance program or loan assistance tool, and and go check out the check, fact fact sheet.

00;27;31;08 - 00;27;31;29
Riley Smith
Excuse me

00;27;32;05 - 00;27;38;27
Dr. Ryan Loy
And at the very least, check your eligibility because maybe you're eligible and don't don't realize it. You know, that has happened many times. And so.

00;27;39;00 - 00;27;55;08
Riley Smith
And definitely if, if you haven't studied it, micro-loan deal like I was questioning earlier, that might be something that you need to look into and take interest in, because it may, on the back side of things may help you in the long run. Taking a kind of like this, that kind of like the.

00;27;55;08 - 00;28;17;24
Riley Smith
What? We just talking about, you know, lowering the interest rate. Take small bites, goes a long way versus just taking a big chunk, may save may save your operation. You never know it in this time and frame where we're at right now in the economy and where farming is right now definitely trying to cross our T's. And dot our I’s to, to become better managers and and stewards of the ground.

00;28;17;26 - 00;28;21;15
Dr. Ryan Loy
That's right.

00;28;21;18 - 00;28;33;22
Riley Smith
Unfortunately, as economists, we can't change make farmers rich, but we just have to. They have to deal with what? The hand they've been dealt with. And so we're, just trying to make the pain a little less as possible, you know?

00;28;33;26 - 00;28;35;10
Dr. Ryan Loy
That's right.

00;28;35;12 - 00;28;41;11
Riley Smith
But anyway, thanks again, Doctor Loy, or I'll let you get off here so you can get ready to go.

00;28;41;14 - 00;28;43;21
Riley Smith
Hopefully shoot a couple pigs in Texas.

00;28;43;24 - 00;28;46;04
Dr. Ryan Loy
Yeah, that's the plan, man. I'm looking forward to it.

00;28;46;07 - 00;29;13;18
Riley Smith
Good deal. Well, y'all stay tuned market report thanks. All right, guys, back with your market report March 25 Corn current price is at $4.94 per bushel. Month agos price was at $4.48 per bushel. That's up $0.36. Year agos price is at $4.47 per bushel. That's up $0.37. March 25 Rice current price is at $14.82 per cwt. Month agos price is at $14.11 per cwt.

00;29;13;18 - 00;29;43;25
Riley Smith
That's up $0.71. A year agos price was at $17.44 per cwt. That's down $2.62. March 25 soybeans current price is at $10.56 per bushel. Month agos price was at $9.76 per bushel. That's up $0.80. Year agos price was at $12.40 per bushel. That's down $1.84. July 25 Wheat current price is at $5.78 per bushel. A month agos

00;29;43;26 - 00;30;08;16
Riley Smith
price is at $5.58 per bushel. That's up $0.20. A year agos price is at $6.13 per bushel. That's down $0.35. March 25 cotton current price is at $0.67 per pound a month agos price is at $0.69 per pound. That's down $0.02 and a year agos price is at $0.85 per pound. That's down $0.17 weekly, U.S Average for Peanuts current price is at $538 per ton a month agos

00;30;08;18 - 00;30;39;20
Riley Smith
price is at $434 per ton. That's up $104. Year agos price is at $526. That's down $12. That's up $12. Excuse me. That's your weekly commodity futures this week. Your fertilizer prices this week Urea is at nine $492.50 per ton, ammonium nitrate at $465 per ton, ammonium sulfates at $472.50 per ton. DAP is over $780.50 per ton, triple super phosphate at $704.50 per ton.

00;30;39;23 - 00;31;05;17
Riley Smith
Potash is at $438.50 per ton, and pellet lime is at $225 per ton Your, Diesel prices this week off road diesel is at $2.78 per gallon. Highway diesel is at $3.32 per gallon. And your Mississippi River level at Memphis, Tennessee this week. Current level is at 3.4ft, and a year ago at 7.68ft. We want to take the time right now to tell you guys that if you're not subscribed to our newsletter, go subscribe.

00;31;05;17 - 00;31;24;07
Riley Smith
This, our newsletter parallels with the podcast episodes. So whatever, which we have in the podcast, we talk about in this newsletter, as well as there's some other details that we, may skip over in the podcast that you can get on the newsletter. I just want to let y'all know that because we have changed the newsletter a little bit.

00;31;24;10 - 00;31;47;24
Riley Smith
When you look at the market update, we start including the, commodity futures for the upcoming harvest season as well as we've, started including including my bad, month ago and three month ago, fertilizer prices. We've been doing this long enough that we're starting to reflect back, looking at the price change in fertilizer as well as diesel prices.

00;31;47;27 - 00;32;00;10
Riley Smith
So y'all go check that out. Other than that, we want to thank you all again for tuning in to another episode of Morning Coffee and AG Markets. We hope you enjoyed it, and we hope you enjoy the rest of your workweek. But until next time, we'll catch you on the flip flop.

00;32;00;11 - 00;32;15;22
Riley Smith
Bye bye now.