Marketing Assistance Loans (MAL)
Loans now repayable during a government shutdown. Storage facility loans expanded to include propane storage for agricultural production. Sugar loan provisions clarified.
What MAL does
Marketing Assistance Loans (MAL) let producers of eligible commodities pledge their crop as collateral for short-term USDA loans. Loans are typically 9 months at favorable interest rates.
Producers can either:
- Repay the loan (with interest) when prices recover
- Forfeit the commodity to USDA at the loan rate (effectively a price floor)
- Repay at the lower of the loan rate or current market price (Loan Deficiency Payment scenario)
What changed in the Farm Bill 2.0
1. Repayable during shutdowns
Producers can now repay marketing assistance loans during a lapse in appropriations (a government shutdown) when USDA employees may otherwise be furloughed. This activity is now classified as “excepted”, meaning USDA staff can process loan repayments during shutdowns.
This is a quiet but meaningful change. In past shutdowns, blocked loan repayment exposed producers to interest accruals and price risk.
2. Propane storage facility loans
USDA’s Farm Storage Facility Loan Program previously covered loans for grain, oilseeds, pulses, hay, and biomass storage. The Farm Bill 2.0 adds propane storage facilities used primarily for agricultural production.
Useful for:
- Grain dryers
- Poultry barn heating
- Greenhouse operations
3. Sugar loan provisions
Sugar marketing assistance loan provisions get technical clarifications consistent with the new “Strengthening Domestic Food Production Supply Chains” provision.
Who MAL matters for
- Producers of corn, wheat, soybeans, cotton, rice, peanuts, sugar, oilseeds, pulses
- Grain dryers and propane-using operations (new storage loan eligibility)
- Producers managing through volatile prices