The lack of transparency in the wool market has created problems determining wool prices for USDA loan prepayment rates and subsequent Loan Deficiency Payment rates. Montevideo, Minnesota sheep producer Bob Padula says confidentiality rules are one of the issues. “If there’s only a couple of firms left they can’t reveal these prices because the competition will know what’s going on. That’s hindered the wool marketing loan program because the USDA was relying on the Ag Marketing Service reports to determine prices for wool.” The trade dispute with China and COVID continue to depress wool prices making price discovery difficult. “The USDA’s loan program didn’t indicate that and they’ve changed some of their recalculations now to be more reflective of international markets.”
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