Think Break #16 Suppose planted and harvested 5,000 bu of soybeans and enroll all 5,000 bu for a Marketing Assistance Loan Soybeans has a $5.00/bu loan.

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Presentation transcript:

Think Break #16 Suppose planted and harvested 5,000 bu of soybeans and enroll all 5,000 bu for a Marketing Assistance Loan Soybeans has a $5.00/bu loan rate, so how much will your MAL be? Suppose you pay back the MAL on Feb 1st when the posted county price for soybean is $6.00/bu, What is your Loan Deficiency Payment? How much will you pay back? Suppose you pay back the MAL on Feb 1st when the posted county price for soybean is $4.50/bu,

Think Break #16: Answer How much will your MAL be? MAL = $5.00/bu x 5,000 bu = $25,000 What is your Loan Deficiency Payment? $0 How much will you pay back? $25,000 Suppose you pay back the MAL on Feb 1st when the posted county price for soybean is $4.50/bu, What is your Loan Deficiency Payment? 5.00 – 4.50 = $0.50/bu x 5,000 bu = $2,500 How much will you pay back? $25,000 – $2,500 = $22,500 (original loan – LDP)