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USDA/FSA

RIN: 0560-AI09

Publication ID: Fall 2010

Title: ●Financing Poultry and Livestock Contract Grower Facilities
Abstract: The Farm Service Agency (FSA) is preparing an advance notice of proposed rulemaking (ANPR) to request comments on what regulatory changes, if any, FSA should make to its loan regulations to address the impacts of recent changes in market conditions for poultry and swine contract growers and integrators. Poultry and pork integrators are companies that use contract growers to raise poultry or swine, and process and market poultry and pork products. Recent increases in energy and feed costs, accompanied by reduced demand, have reduced integrator profit margins and returns. Some integrators have closed processing plants and not renewed grower contracts, or renewed contracts for fewer years. Many contract growers have FSA direct or guaranteed loans. Typically, the loans to finance the construction of grower facilities have a term of 15 years, but the contracts are for fewer years. Before the loan is repaid, integrators have required costly additional capital improvements or declined to renew the contract, thus reducing the ability of the grower to repay the loan. These market conditions have resulted in multiple farm failures and significant losses to the growers, lenders and FSA. FSA has seen defaults in its portfolio of loans in these industries increase and anticipates that this trend of loan losses will continue. The ANPR will allow the public to provide input on the role FSA loan programs should have in financing in the poultry and pork integrator industries, and to suggest potential changes to the FSA loan program regulations.
Agency: Department of Agriculture(USDA)	Priority: Other Significant
RIN Status: First time published in the Unified Agenda	Agenda Stage of Rulemaking: Prerule Stage
Major: No	Unfunded Mandates: No
CFR Citation: 7 CFR 761    7 CFR 762    7 CFR 764
Legal Authority: 5 USC 301    7 USC 1989

Legal Deadline:  None

Timetable: Action Date FR Cite ANPRM  12/00/2010

Regulatory Flexibility Analysis Required: No	Government Levels Affected: None
Small Entities Affected: No	Federalism: No
Included in the Regulatory Plan: No
RIN Data Printed in the FR: No
Agency Contact: Deirdre Holder Branch Chief, Regulatory Analysis and PRA Requirements Branch Department of Agriculture Farm Production and Conservation Business Center, 1400 Independence Avenue SW, Washington, DC 20250-0572 Phone:202 205-5851 Email: deirdre.holder@usda.gov