Presentation is loading. Please wait.

Presentation is loading. Please wait.

Trend Adjusted APH (TA). Trend Adjusted APH (TA) Availability Available on Corn, Cotton, Grain Sorghum, Rice and Soybeans. – Excludes corn insured as.

Similar presentations


Presentation on theme: "Trend Adjusted APH (TA). Trend Adjusted APH (TA) Availability Available on Corn, Cotton, Grain Sorghum, Rice and Soybeans. – Excludes corn insured as."— Presentation transcript:

1 Trend Adjusted APH (TA)

2 Trend Adjusted APH (TA) Availability Available on Corn, Cotton, Grain Sorghum, Rice and Soybeans. – Excludes corn insured as silage – Excludes soybeans insured as specialty type – Excludes crops grown under organic or transitional farming practice

3 Trend Adjusted APH (TA) New for 2012 New product for 2012 Informational Memorandum PM – October 14, 2011 – The Trend Adjusted APH adjusts eligible yields, in qualifying APH databases, to reflect long term increases in the countys historical yield. – Trend Factor provided in the actuarial documents

4 Trend Adjusted APH (TA) Availability Limited Availability: Certain counties in Texas for Corn, Cotton, Soybeans, Rice and Grain Sorghum. County Trend Adjustment Factor- set by RMA. Different factors for different crops.

5 Trend Adjusted APH Expanded Map

6 Trend Adjusted APH Cotton Counties Deaf Smith, Parmer, and south Donley, Collingsworth and south Not in Randall or Armstrong counties

7 Trend Adjusted APH Corn Counties Dallam, Sherman, Hansford, Ochiltree, Hartley Moore, Hutchinson, Carson, Gray, Deaf Smith Randall, Parmer, Castro, Swisher, Briscoe Lamb, Hale and Floyd

8 Trend Adjusted APH Grain Sorghum Counties Wheeler, Collingsworth, Childress and Donley

9 Trend Adjusted APH (TA) Am I Eligible? To qualify, you must – Grow an eligible crop in an eligible county – Have at least one APH database with an actual yield in one (1) of the four (4) most recent crop years. – Elect Trend Adjusted APH (TA) on an application / policy change form By the applicable Sales Closing Date On a Crop / County basis

10 Trend Adjusted APH (TA) How Does it Work? A trend adjustment is made to each actual yield in the database based on 1.The number of actual yields in the database 2.The year of the actual yield 3.The county Trend Adjustment

11 Trend Adjusted APH (TA) How Does it Work? 1. Actual yields in the database – The percentage of the trend adjustment used is based on the number of actual yields in the previous 12 crop years within the database Number of Actual Yields in Database Percentage of Trend Adjustment allowed 125% 250% 375% 4 or more100%

12 Trend Adjusted APH (TA) How Does it Work? 2. The year of the actual yield – The year of the actual yield is subtracted from the current crop year to determine the multiplier Current Crop Year Actual Yield Crop Year Multiplier = = = =1

13 Trend Adjusted APH (TA) How Does it Work? 3. The county Trend Adjustment – Varies from county to county - Found in the RMA county actuarial rates

14 Trend Adjusted APH (TA) How does it Work - Sample Example: – Producer has met eligibility requirements – The database contains 4 actual yields – 4 or more = 100% of Trend Adjustment – The county Yield Adjustment found in the actuarial is 2 – The producer has 100% share on the unit – The producer chose a 70% coverage level – 100 acre unit

15 Trend Adjusted APH (TA) How does it Work Simple Example APH Database Prior to TA YearProductionAcresYield Desc A A A A Approved APH179 Average Yield179 Rate Yield179

16 Trend Adjusted APH (TA) How does it Work Simple Example – Trend Adjusted APH Calculations Current Crop Year - Actual Yield Crop Year =Multiplier X Trend Adjustment= Adjusted Trend Adjustment + Actual Yield= Trend Adjusted Yields =4x2=8+150= =3x2=6+193= =2x2=4+176= =1x2=2+197=199 APH ( ) = 716 / 4 = 179 Trend Adjusted APH ( ) = 764 / 4 = 184 Bushel guarantee per acre (70%): APH: 125 TA: 129

17 Trend Adjusted APH (TA) Is there a Trend Limitation? The Trend Adjusted APH cannot exceed YearProductionAcresYield Desc A A A A Approved APH179 Average Yield179 Rate Yield179 The highest actual yield in the database plus The Trend Adjustment In our example or199

18 Trend Adjusted APH (TA) What does it Cost? Additional Liability and Cost Calculation Steps New Terms – Effective Coverage Level Percent – Rate Differential Factor and Previous Year Rate Differential Factor

19 Trend Adjusted APH (TA) What does it Cost? Effective Coverage Level Percent Calculation – Coverage Level x (Trend Adjusted Yield divided by the higher of the Adjusted Yield) rounded to hundredth 70 x 184 / 179 = ( ) 72% Effective Coverage Level Percent

20 Trend Adjusted APH (TA) What does it Cost? Rate Differential Factor (RDF) Calculation – Created using the difference between the Effective Coverage Level percentage and the Actual Coverage Level – Used throughout premium calculation to determine addition premium – Greater Coverage Adjustment = Greater Premium 70 x 184 / 179 = 72% 70 x 190 / 179 = 74%

21 Trend Adjusted APH (TA) What does it Cost? Example Previous Example Revenue Protection (02) Cost Estimate Estimate using 2011 price ($6) and volatility factor (.29) – Fairfield, Ohio Coverage Level APH Liability TA Liability APH Grower Premium TA Grower Premium 8591,32093,8407,2767, ,92088,3204,8425, ,58082,8003,2653, ,18077,2802,2742, ,84071,7601,6961, ,44066,2401,1291, ,10060, ,70055,

22 Trend Adjusted APH (TA) What does it Cost? Example Previous Example Revenue Protection (02) Cost Estimate Estimate using 2011 price ($6) and volatility factor (.29) – Pipestone, MN Coverage Level APH Liability TA Liability APH Grower Premium TA Grower Premium 8591,32093,8406,1546, ,92088,3203,9944, ,58082,8002,6072, ,18077,2801,7321, ,84071,7601,2061, ,44066, ,10060, ,70055,

23 Trend Adjusted APH (TA) More Details Applies to actual Yields only, the following yields are not eligible for TA – New Producer T-Yields – Added Land SA T-Yields – North Dakota Personal T-Yields (PTY) – Written Agreements, except for High Risk Land Written Unit Agreements

24 Trend Adjusted APH (TA) More Details Available on Additional Buy-Up Coverage only (not available at the CAT level) Yield Adjustment (YA) if elected applies and the Trend Adjustment is added to the YA yield – Example: Actual yield of 79 adjusted by YA to 90. The Trend Adjustment is = = 81 Correct Incorrect

25 Trend Adjusted APH (TA) More Details Cups and Floors do not apply Yield reductions if applicable, still apply – Excessive Yields – Inconsistent Yield Reductions – Production Method Reductions – Trend Reductions

26 Trend Adjusted APH (TA) Continuous Election Once timely requested and applied to policy, TA is continuous unless – Cancelled in writing before applicable cancellation date – Pilot is terminated by FCIC

27 Trend Adjusted APH (TA) Cancellation If timely cancelled – Trend adjustments to yield will no longer apply – 10% cup will not apply the initial year – Standard APH procedures will apply – Yield Substitutions and Yield floors may apply

28 Trend Adjusted APH (TA) Transfers Policy Transfer - If the policy is transferred from one AIP to another, – The election is considered cancelled – The insured may elect TA with the assuming AIP on or before the SCD

29 Trend Adjusted APH (TA) Additional Example YearProductionAcresYield Desc Trend Adjusted Yield Calculation A +20=153 TA A +18=163 TA A +16=183 TA A +14=136 TA A TA A TA A TA A TA A TA A TA T-Yield = 130 Trend Adjustment Limitation = 199 (197+2) Approved Yield174TA 174 Average Yield163 Rate Yield years of actual history In the most 12 years 100% of Trend Adjustment 2 x 100 = 2.0 All years qualify for TA

30 Trend Adjusted APH (TA) Additional Example YearProductionAcresYield Desc Trend Adjusted Yield Calculation T +N/A= Z 2005 Z A +9=154 TA 2007 Z 2008 Z A +4.5=156.5 TA 2010 Z A +1.5=149.5 TA T-Yield = 130 Trend Adjustment Limitation = 154 Approved Yield148TA 148 Average Yield144 Rate Yield144 3 years of actual history in the most recent 12 years 75% of Trend Adjustment 2 x 75% = 1.5 T-Yield does not qualify for TA

31 Trend Adjusted APH (TA) Additional Example 2 years of actual history in most recent 12 years 50% of Trend Adjustment 2 x 50% = 1 TA applied to YA Yield in 1996 YearProductionAcresYield Desc Trend Adjusted Yield Calculation A-YA 78+19=97 TA A +16=154TA A +14=161 TA 2005 Z 2006 Z 2007 Z A +4=205 TA 2009 Z 2010 Z A +1=168 TA T-Yield = 130 Trend Adjustment Limitation = 203 Approved Yield157TA 157 TA Average Yield131 Rate Yield YA Adjusted Yield

32 Trend Adjusted APH (TA) Additional Example 1 year of actual history in most recent 12 years 25% of Trend Adjustment 2 x 25% =.5 TA does not apply to T-yields YearProductionAcresYield Desc Trend Adjusted Yield Calculation T +NA= T +NA= T +NA= A +.5= TA (rounded to 147) T-Yield = 130 Trend Adjustment Limitation = 148 Approved Yield134TA 134 Average Yield134 Rate Yield134

33 Trend Adjusted APH (TA) Additional Example Unit does not Qualify for TA There are no actual yields in the database YearProductionAcresYield Desc Trend Adjusted Yield Calculation L +NA= L +NA= L +NA= L +NA= Z 2011 Z T-Yield = 154 Trend Adjustment Limitation = NA Approved Yield154L TA NA Average Yield154 Rate Yield154

34 Trend Adjusted APH Questions


Download ppt "Trend Adjusted APH (TA). Trend Adjusted APH (TA) Availability Available on Corn, Cotton, Grain Sorghum, Rice and Soybeans. – Excludes corn insured as."

Similar presentations


Ads by Google