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Loan forfeiture

Under commodity program rules, a producer or processor who pledges a stored commodity as collateral to the Commodity Credit Corporation to obtain a nonrecourse loan can settle the repayment obligation by forfeiting the commodity without any penalty. This happens, by design, if forfeiture is more profitable than selling the commodity in the marketplace. In this way the loan program serves a price support function.


Selected Loan forfeiture links:

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