To be eligible for the APH yield, a farmer must:

1. Be located in a county where the TA-APH endorsement is offered

2. Have at least one actual yield in the last four years.

An actual yield is based on yields from a farm, not simply transitional yield (T-yield) which is a plugged value when actual yields do not exist, or other changes occur in the insured unit.

Other details include:

  • The decision to use the TA-APH endorsement must be made by the sales closing date of March 15.
  • The TA-APH yield endorsement will be made on a crop/county basis. A farmer could choose to insure corn with the TA-APH yield endorsement and not use it for soybeans.
  • The TA-APH endorsement is a continuous policy. The TA-APH yield will continue as long as the farmer does not change the election or RMA does not end the endorsement. If a farmer switches companies, the endorsement will have to be re-elected.
  • There must be four yields in the last twelve years for the full trend adjustment to be received. The percent of trend adjustment by actual yields are:
  • 100% adjustment for four or more yields in last 12 years
  • 75% adjustment for three years in last 12 years
  • 50% adjustments for two years in last 12 years
  • 25% adjustment for one year in last 12 years
  • Total premiums (the farmer-paid portion and risk subsidy) will be the same for the same guarantee level for policies with and without the TA-APH yield. Take a 160-bu. APH yield and a 170-bu. TA-APH yield, and a projected price of $6/bu. An 85% revenue protection (RP) policy without the TA-APH will have a guarantee of $816/acre (160 APH yield x $6 projected price x 85% coverage level) and an 80% RP with the TA endorsement will also have an $816 guarantee (170-bu. TA-APH yield x $6 projected price x 80% coverage level). Because these two policies have the same guarantee, the two policies will have the same total premium. The farmer would pay less for the TA-APH policy because subsidy levels are higher for lower coverage levels.
  • In general, non-actual yields are not eligible for a trend adjustment. You will need to discuss details with your crop insurance agents to identify cases eligible for the Trend Adjustment.

Summary

The vast majority of corn and soybean farmers will find the TA-APH yield endorsement an attractive option. The TA endorsement causes the yield used in guarantee calculation to more accurately reflect actual production. In addition, the TA-APH yield endorsement eliminates penalties for long yield histories, as yields in the past are updated to reflect current yields.

 

Read the article at farmdocdaily.com.