To begin further crop insurance decisions, a farmer must establish the proven yield of their farm. This is done by recording the actual production history (APH). Guarantees are set by the APH yield under all the Federal Crop Insurance Corporation (FCIC)-backed insurance plans. Area Risk Protection Insurance (ARPI) Products are an exception.
To prove APH yield a minimum of four years, and a maximum of ten years, records are necessary for each insurance unit. Acceptable documents typically include sale receipts, farm or commercial storage records, and feed consumption records. Poor production years cannot be dropped but an exception can be made if the crop being insured was not planted in a certain year. A zero-acreage report is submitted, and continuous records are maintained even without data for that year. Growers who rotate crops will find this beneficial.
Transition Yield (T yield)
When four continuous years of yield records aren’t available, transition “T” yield must be substituted for each missing year. The T yield varies per county and is based on the 10-year historical county average. If a grower has no records at all, 65% of the T yield is used as their APH. One year of records receive 80%, two records 90%, and 3 records 100%. The APH is a simple average of the four years of recorded yields.
Yield Cup (YC)
As new yield records are added to an APH history, the proven yield is not allowed to decline by more than 10% in one year. This is known as a yield cup.
APH has a floor determined by the number of T yields and actual records used. The floor percentage increases with more years of actual yield records applied. If a grower has a one-year record, 70% of the T yield is used as their floor. Two to four years receive 75%, five or more years receive 80% of the T yield floor.
To learn more about the insurance products available for farm risk management, reach out to Chelsea Heatherington at Kingsgate Insurance.
Chelsea Heatherington, Farm & Ag Specialist
Call or Text: 515-302-8400