The U.S. Department of Agriculture’s Farm Service Agency (FSA) today announced the 2016-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. 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 2016-crop differential schedules are applied to 2016-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 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:usda.gov