Farmers now have more time to repay Marketing Assistance Loans (MAL) as part of the U.S. Department of Agriculture’s implementation of the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020. The loans now mature at 12 months rather than nine, and this flexibility is available for most commodities.

“Spring is the season when most producers have the biggest need for capital, and many may have or are considering putting commodities under loan. Extending the commodity loan maturity affords farmers more time to market their commodity and repay their loan at a later time,” U.S. Secretary of Agriculture Sonny Perdue said. “We are extremely pleased that USDA can offer these marketing flexibilities at this critical time for the agriculture industry and the nation.”

Farmers of eligible commodities now have up to 12 months to repay their commodity loans. The maturity extension applies to nonrecourse loans for crop years 2018, 2019 and 2020.

Eligible open loans must in good standing with a maturity date of March 31, 2020, or later or new crop year (2019 or 2020) loans requested by September 30, 2020. All new loans requested by Sept. 30, 2020, will have a maturity date 12 months following the date of approval.

The maturity extension for current, active loans will be automatically extended an additional three months. Loans that matured March 31 have already been automatically extended by USDA’s Farm Service Agency (FSA).

Farmers who prefer a nine-month loan will need to contact their local FSA county office.

Loans requested after Sept. 30, 2020, will have a term of nine months.

Eligible commodities include barley, chickpeas (small and large), corn, cotton (upland and extra-long staple), dry peas, grain sorghum, honey, lentils, mohair, oats, peanuts, rice (long and medium grain), soybeans, unshorn pelts, wheat, wool (graded and nongraded); and other oilseeds, including canola, crambe, flaxseed, mustard seed, rapeseed, safflower, sunflower seed and sesame seed. Seed cotton and sugar are not eligible.

About MALs
Placing commodities under loan provides farmers interim financing to meet cash flow needs without having to sell their commodities when market prices are low and allows farmers to store production for more orderly marketing of commodities throughout the year.

These loans are considered nonrecourse because the commodity is pledged as loan collateral, and producers have the option of delivering the pledged collateral to the Commodity Credit Corporation (CCC) for repayment of the outstanding loan at maturity.

MAL Repayment
Under the new maturity provisions, farmers can still repay the loan as they would have before the extension:

  • repay the MAL on or before the maturity date;
  • upon maturity by delivering or forfeiting the commodity to CCC as loan repayment; or
  • after maturity and before CCC acquires the farm-stored commodity by repaying the outstanding MAL principle and interest.

Marketing Loan Gains
A Marketing Loan Gain occurs when a MAL is repaid at less than the loan principal. If market gain is applicable during the now-extended loan period, producers can receive a gain on the repayment made before the loan matures.

For more information on MALs, contact the nearest FSA county office.

USDA Service Centers, including FSA county offices, are open for business by phone appointment only, and field work will continue with appropriate social distancing.

While program delivery staff will continue to come into the office, they will be working with farmers by phone and using online tools whenever possible.

All Service Center visitors wishing to conduct business with the FSA, Natural Resources Conservation Service, or any other Service Center agency are required to call their Service Center to schedule a phone appointment.

More information can be found at farmers.gov/coronavirus.