Actual Production History (APH)

Key Terms

• Basic Unit (BU) – Is all insurable acreage of the crop in the county which the insured has 100 percent share in the crop. (Premium discount may be applicable when not divided into optional units.)

• Optional Unit (OU) – OUs are available by sections.

• Enterprise Unit (EU) – EUs all insurable acreage of the same insured crop in the county. May qualify for separate EUs by IRR and NI practice.

• Whole Farm (WU) - WU all insurable acreage of ALL insured crops in the county.

Key Terms (Cont)

• Category B Crops – Annual crops i.e., corn, wheat, grain sorghum etc.

• Category C Crops – Perennial crops i.e., apples, peaches, grapes etc.

• Practice/Type – i.e., Irrigated, Non-Irrigated, Durum wheat,

• T-Yield Map Area – APH database established for each T-Yield map if different T-Yields are provided in the actuarial documents.

APH Database Base Period

10 most recent APH crop years:

Types of Yields in APH Databases

Actual yields

• from claim forms, or

• production reports.

Types of Yields in APH Databases

Temporary Yields

• are the prior year’s approved APH yield by unit• for the most recent year in the base period if an insured is unable to finish

harvest due to an insurable cause,

• it is a delayed claim, or

• records are unavailable from the processor or marketing outlets by the PRD.

Zero-planted acre yields for annual crops with zero-planted acres

• by unit.

Types of Yields in APH Databases

T-Yields

• Used when less than four years of actual and/or assigned yields are available for the database

• Variable T-Yield percentage is determined by the number of yields available for the crop in the county.

• To meet the four year base period, variable T-Yield % based on: • no years of actual/assigned yields, 65 percent of the applicable T-Yield.

• one year of actual/assigned yield, 80 percent of the applicable T-Yield.

• two years of actual/assigned yields, 90 percent of the applicable T-Yield.

• three years or more of actual/assigned yields, 100 percent of the applicable T-Yield.

Acceptable Production Reports Not Submitted

For carryover insureds when acceptable production reports are required but not submitted for all units the APH database will be updated with:

• actual yields and appraised potential production from loss claims

• assigned yields – 75% of prior year’s approved APH yield

• variable T-Yields;• when no prior approved yield exists, and

• there are less than 4 years of actual/assigned yields available for APH database

• will not qualify for OUs unless loss records account for all units or other exceptions apply

New Producer Qualifications

• Producer must not have produced the insured crop in the county for more than two crop years.

• For example:o Steve purchased a farm and first time planting corn in Stevens Co. Steve

would qualify for 100% of Stevens Co. RMA County T-Yield.

o Steve purchased a farm in 2017 (Sullivan Co.) and planted wheat for the first time in 2017. Steve would qualify as a New Producer as only grown wheat in Sullivan Co. for 1 year. However, Steve must provide the 2017 wheat production. 2018 Database would include 1 actual and 3 T-100% T-Yields.

Beginning Farmers and Ranchers (BFR)

• BFR Qualifications:

• Must not have operated farm/ranch for more than 5 years, excluding;

• BFR under age of 18,

• In post –secondary studies,

• Or active in the U.S. military.

Beginning Farmers and Ranchers (BFR)

• BFR Benefits:• Administrative Fees Waived

• Additional premium subsidy (10%)

• Use of production history which were previously involved in

• An increase, from 60 to 80% of the T-Yield in Yield Adjustment

• Note: Other USDA programs may have different BFR qualifications and benefits.

Ways to Use Someone Else’s Production History

Transfer of APH Data• When an insured transfers all or part of their operation to

another person;• The actual yields for the acreage being transferred from the insured

(transferor) to the other person (transferee), may be transferred when the transferee:• participated in the operation and establishment of the approved APH yield for the

acreage being transferred, or had a share of the crop being transferred

• participated in the mgmt. decisions regarding the acreage being transferred; and

• performed the physical activities necessary to produce the crop on the acreage being transferred.

• Provides AIP with verifiable evidence which indicates the transfer of the actual yields for the applicable acreage is appropriate

Use of Another Person’s History:Transfer of farming operation has not occurred

To use another person’s actual records the other person must:

• share in the crop on that land location for the current crop year; or• when APH data is transferred to the insured’s policy from another policy for

that land location on which the insured shared in the insured crop’s production.

Insureds must obtain either:

• permission to use the other person’s APH production reports/databases for the current crop year; or

• copies of the other person’s acreage and production records.

Use of Another Person’s History: Transfer of farming operation has not occurred (Cont)

Landlord and Tenant APH Yields:

• When share renting the same land• each party must file production reports; unless,• one party authorizes the other party to file

• Parties sharing in the crop may use production reports submitted by other insureds sharing in the crop, provided their use has been authorized by:• Power of Attorney: or• Other form of written authorization

Use of APH When Insureds Change or Land is Transferred to Another Person

If insuring crops previously produced, Production Reports (PR) must be filed for all land contained in their current operations

• if insured consists of more than one member,• The PR must include all land contained in the current farming operation upon

which crop(s) insured for the current crop year were produced by all members of the entity.

Use of APH When Insureds Change or Land is Transferred to Another Person (Cont)

Acceptable records must be provided to support the acres and certified production;

• Acres and production history must not be transferred from existing unit databases, unless;

• The new person is eligible to use the acreage and production history and

• The same acreage is involved.

Establish APH Database

• 4-10 crop years

• On a unit/P/T/ basis

• Based on production report provided by producer• Using actual yields, if production/acres provided in production report

• If <4 years, use T-Yields to complete 4 year base period

• No production report provided• Initial year of insurance, 65% of variable T-yield is used

Calculating Average, Rate and Approved APH Yields

Yield Limitations

• Cups (10% yield limitation compared to the prior years approved APH yield) and

• Yield floors are designed to mitigate the effect of catastrophic years on approved APH yields.• Yield floor is a percentage of T-Yield based upon the numbers of

• Only APH databases with at least one actual or assigned yield are eligible.

Cups-Category B Crops

The cup prevents:

• The approved APH yield from decreasing by more than 10% compared to the prior year's approved APH yield

• NOTE: This is for carryover insureds only

Yield Floor-Category B Crops

• Only additional coverage policies for new and carryover insureds.

• Keeps the approved APH yield:• from falling below a percentage of the applicable T-Yield

• based on the number of years of records for the crop and county.

MAXIMUM YIELD FLOOR YEARS OF RECORDS

PERCENTAGE OF APPLICABLE T-YIELD 1 YEAR 2 - 4 YEARS 5 OR MORE YEARS

80% 70% OF T-YIELD 75% OF T-YIELD 80% OF T-YIELD

90% OPTION 80% OF T-YIELD 85% OF T-YIELD 90% OF T-YIELD

100% OPTION* 90% OF T-YIELD 95% OF T-YIELD 100% OF T-YIELD

Yield Limitations – Category C Crops

Yield Floors and Cups

• Yield floors do not apply

• Cups may be authorized

• Cups prevent the approved APH yield from decreasing by more than 10%

• Cups are administered by APH database

Yield Adjustment (YA)

Insureds may elect to substitute 60% of the applicable T-Yield for actual yields that are less than 60% of the applicable T-Yield

• Elected by Previously Reported Data (PRD) for the crop

• Elected on crop/county basis and applied on an APH database actual yield basis by year

Yield Exclusion (YE)

• When elected, allows the:• Exclusion of actual yields for a certain crop year when RMA determines the county

per planted acre yield for a crop year was at least 50% below the simple average of the per planted acre yield for the crop in the county for the previous 10 consecutive crop years.

• When a crop year is:• Determined to be eligible for YE for a crop in a county, insureds in contiguous

counties will also be eligible to exclude actual yields for that crop year under YE.

• The YE option and eligible crop years for exclusion:• are identified in the actuarial documents.

• When YE is elected, insureds may exclude actual yields in any eligible crop year(s) that:• are identified in the actuarial documents.

Yield Exclusion

• Election:• By Sales Closing Date (SCD)

• Crop/County

• “YE” Option Code

• Availability: Must be on actuarial documents for crop/county

• Continuous Election: Unless cancelled in writing on cancellation date

Yield Adjustment (YA)

• Adjusted Yield = Average of annual yields• Without cups or floors

• Without YE

• With YA if elected• If no YA elected than adjusted yield = average yield

• Exception: with yield reductions adjusted yield must = approved yield

• Approved APH Yield will not be less than adjusted yield

Rate Yield Calculation

• Rate yield = average yield with YE

• Exceptions:

• Approved APH yield reduced for Inconsistent Approved APH Yields• Rate yield is = approved yield

• Approved Yield is reduced for Different Production Methods• Results in lower actuals yields

• Rate yield is = approved yield

Trend Adjustment (TA)

• Trend Adjusted APH is:

• Available for specific counties in authorized area

• Applicable to only the insurance offers for which a trend adjustment amount is provided in the actuarial documents

Eligibility for Trend Adjustment (YA)

• Election made by SCD on crop/county basis but applied on an APH database basis

• An actual yield in 1 of the 4 most recent crop years

• Not available for Catastrophic Crop Insurance (CAT)

• Continuous election

YA Example

• 2007 and prior years’ RMA T-Yield was 97 bushels

• 2014 RMA T-Yield is 105 bushels

• 2016 and 2017 RMA T-Yields are 110

• Prior year’s APH yield was 117 bushels which was calculated using YA/yield substitutions

• Insured has elected APH YA/substitutions for crop years 2008, 2014, and 2017

• Insured is eligible for APH Adjustment for crop year 2016; however, the insured did not elect the adjustment for crop year 2016

APH CALCULATION WITHOUT YA/SUBSTITUTIONS APH CALCULATION WITH YA/SUBSTITUTIONS

CROP

CORN

PRACTICE

NI

TYPE

GR

UNIT

00101

CROP

CORN

PRACTICE

NI

TYPE

GR

UNIT

00101

YEAR PROD ACRES YIELD YEAR PROD ACRES YIELD

2007 0 90.0 A0 2007 5220 90.0 A0/58

2009 16000 100.0 A160 2009 16000 100.0 A160

2010 10850 70.0 A155 2010 10850 70.0 A155

2011 7700 55.0 A140 2011 7700 55.0 A140

2012 11375 65.0 A175 2012 11375 65.0 A175

2013 13178 125.5 A105 2013 13178 125.5 A105

2014 0 100.0 A0 2014 5800 100.0 A0/58

2015 6300 100.0 A63 2015 6300 100.0 A63

2016 3510 90.0 A39 2016 3510 90.0 NA39

2017 0 100.0 A0 2017 0 100.0 A0/66

TOTAL 837 TOTAL 1019

METHOD AVG. YIELD YIELD FLOOR CUPADJ.

APHMETHOD

AVG.

YIELD

YIELD

FLOORCUP

ADJ.

APH

YIELD 837÷10= 84 110X .8 = 88 NA NA YIELD 84 88 NA101910

=102

PREMIUM $9.27 $9.37 PREMIUM $11.61

Example - YE and YA Elected

• The insured has elected YE for cotton in 2018 and has two OUs for non-irrigated cotton.

• The insured can exclude crop years 2016, 2014, and 2011.

• For OU 0001-0001, the insured has elected to exclude crop year 2011; not exclude crop years 2016 and 2014; and to use yield substitutions for crop years 2009 and 2014.

• For OU 0001-0002, the insured elected to not exclude any crop years, although 2016 was an eligible crop year, and did not plant any cotton in crop years 2014 and 2011

Yield Exclusion Selection Criteria

Year: 2018 Commodity: Cotton (0021) State: Xxxx (XX) Data: Example Plan:

Revenue Protection (02)

County: Xxxx (XXX)

Types / Practices T/P 01 T/P 02 T/P 03 T/P 04

Type No Type Specified 997 No Type Specified 997 No Type Specified 997 No Type Specified 997

Practice Non-IRR 003 Non-IRR Skip Row 063 IRR 002 Organic(Certified) Non-IRR 713

Yield Exclusions

LBS LBS LBS LBS

Eligible Yield Exclusion Years 2016 (P) 2016 (P) 2014 (P) 2016 (P)

2014 (P) 2014 (P) 2011 (P) 2014 (P)

2011 (P) 2011 (P) 2011 (P)

2018 Cotton

(0021)

NI

(003)

NTS

(997)

2018 Cotton

(0021)

NI

(003)

NTS

(997)

Yield limitation flag: 09 Yield limitation flag: 09

Unit # 0001-0001 OU Yield

DescYield

Unit # 0001-0001 OU Yield

DescYield

YE Opt

OutYear Prod Acres Year Prod Acres

2008 15500 50 A 310 2008 15500 50 A 310

2009 39600 200 A 198 2009 39600 200 A 198

2010 86600 100 A 866 2010 86600 100 A 866

2011 6250 50 A 125 2011 6250 50 A 125

2012 152800 200 A 764 2012 152800 200 A 764

2013 84900 100 A 849 2013 84900 100 A 849

2014 6700 50 A 134 2014 6700 50 YA 134 Y

2015 40400 200 NA 202 2015 40400 200 NA 202

2016 41500 100 A 415 2016 41500 100 A 415 Y

2017 38040 40 A 951 2017 38040 40 A 951

T-Yield = 350 Approved APH 499 T-Yield = 350 Approved APH 531

Average Yield 481 Adjusted Yield = 499 Average Yield 481

Rate Yield 481 Rate Yield 481

Unit 0001-0002 APH Database Before YE Unit 0001-0002 APH Database After YE

2018 Cotton

(0021)

NI

(003)

NTS

(997)

2018 Cotton

(0021)

NI

(003)

NTS

(997)

Yield limitation flag: 01 Yield limitation flag: 01

Unit # 0001-0002 OU Yield

Desc. YieldUnit # 0001-0002 OU Yield

Desc.Yield

YE Opt

OutYear Prod Acres Year Prod Acres

2008 11320 40 A 283 2008 11320 40 A 283

2009 0 0 Z 0 2009 0 0 Z 0

2010 80880 120 A 674 2010 80880 120 A 674

2011 0 0 Z 0 2011 0 0 Z 0

2012 64560 80 A 807 2012 64560 80 A 807

2013 0 0 Z 0 2013 0 0 Z 0

2014 0 0 Z 0 2014 0 0 Z 0 Y

2015 28080 120 A 234 2015 28080 120 A 234

2016 40080 80 A 501 2016 40080 80 A 501 Y

2017 35480 40 A 887 2017 35480 40 A 887

T-Yield = 350 Approved APH 564 T-Yield = 350 Approved APH 564

Average Yield 564 Adjusted

Yield = NA

Average Yield 564

Rate Yield 564 Rate Yield 564

And to you the American Farmer I say: THANK YOU