Transcript 2015 RMA Spring Crop Update - Home

1
2015 Filing Update
BILLINGS REGIONAL OFFICE
BILLINGS, MONTANA
PHONE: (406) 657-6447
EMAIL: [email protected]
This presentation highlights features of Risk Management Agency Programs and is not intended to be comprehensive. The information presented neither modifies or
replaces terms and conditions of the basic policy, the crop provisions, or the county actuarial documents. Consult a crop insurance agent for further details.
2
3
4
Summary of Farm Bill Changes
WWW.RMA.USDA.GOV CLICK ON
Farm Bill – Coverage by Irrigation
Practice

You may have separate Enterprise Units for irrigated and nonirrigated crops

New option: You may elect separate coverage levels for irrigated
and non-irrigated crops (including within a Whole Farm Unit when
available)

Effective for 2015 spring seeded crops (contract change date of
November 30, 2014)

See PM-14-045 and PM-14-046 for guidance
5
Farm Bill – Conservation
Compliance

Highly-Erodible Land (HELC) and Wetland Conservation (WC)
compliance is required to be eligible for a premium subsidy

AD-1026 form (HELC and WC Certification) on file with FSA by June 1,
2015 to be eligible for 2016 crop insurance premium subsidy
6
Farm Bill – SCO (w/PLC coverage)

Supplemental Coverage Option (SCO) is area-based coverage for
a portion of your insurance deductible

Purchased in combination with a regular policy

Available 2015 for “combo” plans (Yield Protection, Revenue Protection,
Revenue Protection w/Harvest Price Exclusion)

Corn, Soybeans, Wheat, Grain Sorghum, Cotton, Spring Barley and rice

65% premium subsidy

Indemnity payments based on whether the final average yield or
revenue for an area falls below 86% of the expected level
7
8

Example:

Grower purchases an
individual revenue
policy, 80% coverage
SCO Data Source and Availability
(excluding cotton)


General guidelines to establish coverage for a county or district :

At least 20 of the most recent 30 years reported

At least 8 of 10 most recent years with an average of 10,000 or more planted
acres

At least 50 farms for the crop/county according to the most recent Census of
Agriculture
Considering use of crop insurance yield data beginning with 2016

Additional counties for current SCO crops (aggregation)

Additional practice-specific insurance offers

Additional crops (primary areas)
9
10
11
12
13
14
15
16
http://www.dvlpapps.rma.usda.gov/tools/RMAMobile.html
17
Farm Bill – Native Sod
“Acreage that has no record of being tilled … for the
production of an annual crop on or before February 7,
2014…”

Applies to: Iowa, Minnesota, Montana, Nebraska, North Dakota,
and South Dakota – all counties

Effective for annual crops with a contract change date on or after
June 30, 2014

When more than five acres of native sod (by policy) is tilled

Tilled and planted on or after February 7, 2014
18
Farm Bill – Native Sod
Benefits reduced for first four crop years:

Reduction of premium subsidy (50 percentage points)

Reduced insurance guarantee (65% of transitional yield)

No substitute yields in APH database (for low years)

Reference:

15-CCIP-Farm Bill Basic Provisions Amendment – Section 1 definition and
Section 9(e) and 9(f)

Informational Memorandum PM-14-027
19
Farm Bill – Beginning Farmer and
Rancher

“An individual who has not actively operated and managed a farm
or ranch…with an insurable interest in a crop or livestock as an
owner-operator, landlord, tenant, or sharecropper for more than
five crop years…”
(exclude years: under the age of 18, in full-time military service, in postsecondary education)

Guidance:

15-CCIP-Farm Bill Basic Provisions Amendment – Section 1 definition,
Sections 3(l), 7(e)(4), 7(g) and (h), and 36(c)

PM-14-028
20
Farm Bill – Beginning Farmer and
Rancher


BFR benefits (beginning with crops having a June 30, 2014 contract
change date and later):

Increased premium subsidy (10 percentage points)

Exempt from administrative fees

Allows use of yield history from previous farm or ranch operations

Yield substitution is 80% of the applicable transitional yield (instead of
60%)
Benefits are continuous until 5 year rule is met
21
Farm Bill – Whole Farm Revenue
Protection

Provides protection for diversified farms (all eligible commodities
under one insurance policy)

Replaces AGR and AGR-Lite / expanded availability

Coverage based on 5 consecutive tax years of historic average
revenue and expenses

50-85 percent coverage levels (80 and 85 levels require 3 or more
commodities)

Premium rate discounts for multiple crop diversification

Reference: MGR-14-021
22
Farm Bill – Whole Farm Revenue
Protection
23
Comparison Feature
AGR-Lite
WFRP
Liability Limit
$1 Million
$8.5 Million
Animal Limit
None
35% of expected revenue up to $1 million
(maximum)
Replant Payment
None
Up to 20% of expected revenue for annual crop
with 20 acres or 20% of crop needing replant
Other Federal Crop
Insurance
Optional
Optional – at any buy-up level; no CAT level
MPCI allowed
Market readiness amounts
in insured revenue
No
Yes
Expanding operations
No
Average historic revenue increased by10% if
operation is expanding and approved by AIP
Premium Subsidy
Basic Level Whole-Farm Level w/ 2 or more commodities
Whole Farm Revenue Protection
Availability
24
APH Yield Exclusion

Allows a higher approved yield for producers on eligible crops in
eligible counties (and contiguous) that have been hit with severe
weather

Available for 2015 spring crops (not dual wheat counties)

Eligible 2015 crops are: corn, soybeans, wheat, cotton, grain sorghum,
rice, barley, canola, sunflowers, peanuts and popcorn

Yield Exclusion option available when the county yield is at least 50
percent below the average of the previous 10 consecutive crop years

Must be elected by the Sales Closing Date

Reference: Section 5 in the 15-CCIP-Farm Bill Basic Provisions
Amendment
25
APH Yield Exclusion

You may choose any of the following options within a database:

Yield Exclusion (YE)

Yield Adjustment (YA)

Trend Adjustment (TA)

You may only apply either yield exclusion or yield adjustment to an
actual yield within a database

When an actual yield is excluded, the excluded actual yield cannot
be considered for trend adjustment.
26
APH Yield Exclusion

If APH YE lowers your actual production history to less than 4 crop
years of production history in your APH database, the applicable TYield will be substituted for the excluded years

Written Agreements are not allowed (YE must be provided in the
actuarial documents)

Personal T-Yields (ND only):

When an actual yield is excluded in an APH database, that actual yield
is not excluded for the purposes of calculating the Personal T-Yield (PTY)
27
APH Yield Exclusion
28
29
Non-Irrigated Soybean YE Availability 2015
30
Additional Information – www.rma.usda.gov
31
32
Summary of Filing Changes
Rate, Reference Yield and T-Yield
Reviews

Fall Crops:


Alfalfa Seed
Spring Crops:

Canola

Millet

Mustard

Potatoes

Safflower

Sugar Beets
33
Organic


T-Yields reviewed and updated for 2015 based on additional history

Canola (MT & ND) factor changed from 95% to 90%

Millet (ND) factor changed from 70% to 65%

Millet (WY) factor changed from 65% to 70%

Potatoes (MT, ND, SD, WY) factor changed from 80% to 85% (based on
national data only)
New distinct organic price elections (no contract required)

Grain sorghum, popcorn, flax, millet, corn silage
34
New Breaking Statement

Revised Special Provisions statement in Prairie Pothole States (all
counties): Iowa, Minnesota, North Dakota, South Dakota, Montana,
Nebraska

Requires approved yield to be held at 65% of the T-Yield for the first
four crop years of planting when breaking native sod

New yield indicator required (SP)
35
Cover Crop Statements
(in counties with cc and sf practices)

New statements in the Special Provisions clarify that if cover crops
are grown on land during a fallow year, that the subsequent crop
must be insured under the continuous cropping practice
If a crop or cover crop is planted on summerfallow acreage in a fallow
year, the following planted crop will not meet the summerfallow practice
definition until the acres lie fallow for a full crop year. If the acreage did
not lie fallow the preceding full crop year, the acreage may be insured
under the continuous cropping practice provided all other provisions of
that practice are satisfied.

Guidance in CIH Para. 821B(3)(b) and Para. 911
36
2015 Trend Adjustment Availability


Montana

Wheat: 48 of 54 program counties

Canola: 6 of 18 program counties

Corn: 10 of 24 program counties
North Dakota

Wheat: 53 of 53 program counties

Canola: 38 of 53 program counties

Corn: 46 of 53 program counties

Sunflowers: 51 of 53 program counties

Soybeans: 35 of 48 program counties
37
2015 Trend Adjustment Availability


South Dakota

Wheat: 55 of 66 program counties

Corn: 62 of 66 program counties

Grain Sorghum: 19 of 59 program counties

Sunflowers: 23 of 52 program counties

Soybeans: 46 of 48 program counties
Wyoming

Corn: 7 of 11 program counties
38
Trend Adjustment Participation
State
Crop
2013 Policies
w/TA
2014 Policies
w/TA
Montana
Wheat
612
602
North Dakota
Wheat
Canola
Corn
Sunflowers
Soybeans
4,029
1,077
5,310
5,632
5,859
1,549
5,528
354
7,276
South Dakota
Wheat
Corn
Grain Sorghum
Sunflowers
Soybeans
3,041
18,552
113
13,926
3,409
18,492
163
486
16,172
Wyoming
Corn
44
96
39
Whole Farm Units – Coverage Level
by Practice

New SP statement – CCIP Revenue plans for Barley, Canola, Corn,
Grain Sorghum, Sunflowers, Soybeans, Wheat

In addition to section 34(a)(5)(i)(A)(3) of the Basic Provisions which
requires all crops within a whole-farm unit to be insured at one
coverage level, you may elect separate coverage levels for all irrigated
crops and all non-irrigated crops within your whole-farm unit in
accordance with section 3(b)(2) of the Basic Provisions. For example, all
irrigated crops may be insured at the 65 percent coverage level and all
non-irrigated crops may be insured at the 70 percent coverage level.
40
Annual Forage – PM-14-030

New program (North Dakota and South Dakota) in 2014


Farm Bill 12305(b)(1)(B) prohibits CAT coverage for crops and grasses
used for grazing


Covers annually planted crops for livestock feed and fodder which are
either mechanically harvested, grazed or a combination
New 2015 Special Provisions statement clarifies this
NAP will be offered for any annual forage crop planted with an
intended purpose that includes grazing

Producers cannot obtain both NAP and AF at a buy up level for the
intended use of grazing
41
Alfalfa Seed

Crop Provisions revised to incorporate changes made converting
the program to permanent status

Crop Provisions 15-0107 replaced pilot provisions 12-0107

Updated definition to include forage seed produced as hybrid seed
42
Specialty Canola, Corn, Soybeans

MGR-13-002.1 (2014 and succeeding crop years) – Separate APH
databases to use contract price OR do not separate databases
and do not use contract price

Specialty types affected:

High Oleic Canola

High Amylase Corn

Blue Corn

Low Linolenic Acid Soybeans
43
Canola – North Dakota


“No Irrigation Practice Specified” changed to “Irrigated” and “Nonirrigated”

T-yields and rates were duplicated for both offers

Irrigated offers were not attached to maps

Montana offers were already split into irrigated and non-irrigated
Producers can now take advantage of separate units by irrigation
practice provisions
44
Corn


Non-Irrigated Grain Corn added to:

Adams, ND

Perkins, Shannon, SD
Non-Irrigated Silage Corn added to:


Carter, MT
Quality – low test weight

Farm Bill, Section 11013 mandates additional time to settle claims for
corn with low test weight (below 44 lbs.)

Quality statement in Special Provisions revised to allow 120 days to settle
claims (instead of 60 days allowed for other issues)
45
Dry Beans

NOTE: As in 2014…

Montana, South Dakota, and Wyoming have only the APH plan

North Dakota has YP, RP, and RP w/HPE plans

Cranberry type added to Pembina and Walsh, ND

Tebo type added to Barnes, Steele and Walsh, ND

Enterprise units now available (all plans)

Contract Price option for certified organic practice now available
for YP, RP and RP w/HPE plans (only APH had this option in 2014)
46
Dry Beans – New Variety
Statements

Tebo (new type in the region)


Approved Tebo Varieties include: Fuji and Hime. Varieties not approved
above will be insurable only by written agreement.
Cranberry (Etna added)

Approved Cranberry Varieties include: Capri, Cran 09, Cran 34, Cran 74,
Etna, Hooter, Messina, and Taylor Hort. Varieties not approved above
will be insurable only by written agreement
47
Dry Peas


NOTE: As in 2014…

North Dakota and Montana have YP, RP, and RP w/HPE Plans

South Dakota and Wyoming have APH Plan only
Program Expansion to Laramie County WY

Smooth Green or Yellow type only (both irrigated and non-irrigated)

Dates: 3/15 Earliest Planting and Sales Closing, 4/30 Final Planting, 7/15
Acreage Reporting

Enterprise units now available for all plans

Contract Price option now available for YP, RP and RP w/HPE plans
for certified organic practice (only APH had this option in 2014)
48
Dry Peas


“No Irrigation Practice Specified” changed to “Irrigated” and “Nonirrigated”

T-yields and rates were duplicated for both offers

Irrigated offers were not attached to maps
Producers can now take advantage of separate units by irrigation
practice provisions
49
Dry Peas – New Chickpea Variety
Statements

Approved Large Kabuli Chickpea Varieties:
Dwelley
Dylan
Sierra
Troy
Xena
Yuma
Varieties not listed above will be insured as the Small Kabuli Chickpea type unless designated otherwise by written
agreement.

Approved Small Kabuli Chickpea Varieties:
Alma,
Amit (B-90)
Chi Chi
Chico
Frontier
Luna and other Kabuli Chickpea varieties not otherwise designated.
50
Dry Peas – New Rotation Statement

Spring Austrian Peas, Spring Forage/Feed Peas grown for seed,
Spring Smooth Green or Yellow types:

Insurance will not attach to any acreage on which field peas (Austrian
Peas, Forage/Feed Peas Grown for Seed and/or Smooth Green or
Yellow Peas) were planted in either of the previous two (2) crop years or
on which chickpeas or lentils were planted in the previous crop year.
Chickpeas that were planted and then all plant growth is terminated by
chemical or mechanical means prior to June 15, will not be considered
planted for rotational purposes only. The insured is responsible to provide
proof of insurability. This statement applies to field peas, lentils, and
chickpeas grown either as a grain, cover crop or in a cover crop
mixture.
51
Dry Peas – New Rotation Statement

Spring Lentil type:

Insurance will not attach to any acreage on which lentils were planted
in either of the previous two (2) crop years or on which chickpeas or
field peas were planted in the previous crop year. Chickpeas that were
planted and then all plant growth is terminated by chemical or
mechanical means prior to June 15, will not be considered planted for
rotational purposes only. The insured is responsible to provide proof of
insurability. This statement applies to lentils, field peas, and chickpeas
grown either as a grain, cover crop or in a cover crop mixture.
52
Dry Peas – New Rotation Statement

Chickpea types:

Insurance will not attach to any acreage on which chickpeas
(garbanzo beans) have been planted in any of the three previous crop
years. Chickpeas that were planted and then all plant growth is
terminated by chemical or mechanical means prior to June 15, will not
be considered planted for rotational purposes only. The insured is
responsible to provide proof of insurability. This statement applies to
chickpeas grown either as a grain, cover crop or in a cover crop
mixture.
53
Livestock

New “Margin Protection Program for Dairy” (MPP-Dairy)

Administered by FSA

Available September 1, 2014

CAT and buy-up coverage offered

Producers may not participate in both MPP-Dairy and LGM-Dairy

More information in MGR-14-005
54
Potatoes – North Dakota

Added Processing Quality (PR) option to 17 counties:
Barnes, Benson, Cass, Cavalier, Dickey, Eddy, Emmons, LaMoure, McLean,
Mercer, Morton, Pembina, Ramsey, Ransom, Richland, Steele, Stutsman

Fresh varieties (Russet Norking and Russet Norkotah) are not eligible

Contract price now available for certified organic practice

Two potato maps were changed: Grand Forks and Pembina


Rate areas no longer apply; unrated areas do apply
Two rate area potato maps were deleted: Traill and Walsh counties
55
Soybean Program Expansion


3 North Dakota counties: Divide, Grant, Stark

All types and practices

6/10 Final Planting Date
South Dakota

“Non-Conventional”

Now NC-Irrigated and
NC-Non-irrigated
56
Wheat, Oats, Barley

New Special Provisions statement to conform to Section 1206 of the
Farm Bill (all plans)
In addition to Section 29 of the Basic Provisions, if you elect to obtain a
Farm Service Agency Graze-Out Payment for acres of this crop grazed by
livestock and not otherwise harvested, you are not eligible for an
indemnity.
57
Map Updates (all in North Dakota)

Incorporated high rate areas into adjacent standard rate areas:
Burke, Ransom, Richland, and Sargent Counties

Incorporated unrated areas into adjacent rated areas: Pembina

Cleaned split fields: Dickey, Nelson, Sioux

Deleted potato rate area maps: Grand Forks, Pembina, Traill, Walsh
58
Farm Bill – CAT Premium Change

Finding: CAT experience is generally better than it is rated

Action: 2015 CAT rating differential has been reduced (by 50% in
most cases)

Producer payment remains $300 administrative fee
59
2014 Harvest Prices Announced
Commodity
Harvest Price
Change
Projected Price
Barley
$3.16/bushel
▼21.6%
$4.03/bushel
Canola
$0.168/pound
▼8.6%
$0.184/pound
Canola, Rapeseed
$0.223/pound
►
$0.223/pound
Corn
$3.49/bushel
▼24.5%
$4.62/bushel
Corn, Organic
$6.77/bushel
▼24.5%
$8.97/bushel
Grain Sorghum
$3.37/bushel
▼24.4%
$4.46/bushel
Popcorn
$0.1487/pound
▼24.4%
$0.1968/pound
Soybeans
$9.65/bushel
▼15%
$11.36/bushel
Soybeans, Organic
$16.24/bushel
▼15%
$19.12/bushel
Sunflowers, Oil
$0.174/pound
▼16.7%
$0.209/pound
Sunflowers, Confectionery
$0.239/pound
▼12.8%
$0.274/pound
Wheat, Spring
$6.17/bushel
▼5.2%
$6.51/bushel
Wheat, Durum
$6.87/bushel
▼5.2%
$7.25/bushel
60
ARPI Popcorn (South Dakota)
ARPI Plans 04, 05, and 06
61
CCIP Plans 01, 02, and 03
ARPI Popcorn (South Dakota)

ARPI Popcorn FPD – 6/14

Different than corn (5/25 or 5/31) or popcorn (5/20)

Same as ARPI corn

Consistent with the practices of the industry, insured acreage must
be covered under a contract with a popcorn buyer

Expected and final county yields/revenues are determined by NASS
data (corn multiplied by a factor)
62
ARPI – Wheat, Corn, Soybeans
(+ Popcorn)

New Special Provisions statement clarifying the protection factor for
CAT coverage:

In lieu of section 6(b) of the Basic Provisions, you may only choose a
protection factor of 120 percent for catastrophic risk protection.
However, in accordance with section 8(m) of the Basic Provisions, if you
do not submit a production report to us by the production reporting
date specified in the actuarial documents, your protection factor for
your catastrophic risk protection policy in the following crop year will be
limited to the lowest protection factor available. The provisions of
section 5(d)(1) of the Basic Provisions are also applicable for
catastrophic risk protection on native sod acreage.
63
Written Agreements

Complete the request form completely – including:

Farm, Tract and Field #s

Crops, types and practices (specific to those offered in county actuarial
documents)

Any narrative sections – use attachments if needed

Better to provide too much information rather than not enough
Write clearly – unreadable information causes delays
 Review Written Agreement Handbook for specific WA type and submit
all required information – missing information causes delays



Exhibit 5 of the WAH is an excellent reference

Maps need to be readable – very large % are inadequate
2015 signed APH (or signed 2014 production report & unsigned 2015
APH) is always required.
64
Top 10 South Dakota Insured Crops in 2013
(by planted acres)
65
CY 2013
Loss Ratios - Corn
66
CY 2013
Loss Ratios - Soybeans
67
CY 2013
Loss Ratios - Wheat
68
CY 2013
Loss Ratios - Sunflowers
69
CY 2013
Loss Ratios - PRF
70
71
Questions?
[email protected]