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2015 Filing Update BILLINGS REGIONAL OFFICE BILLINGS, MONTANA PHONE: (406) 657-6447 1 This presentation highlights features of.

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Presentation on theme: "2015 Filing Update BILLINGS REGIONAL OFFICE BILLINGS, MONTANA PHONE: (406) 657-6447 1 This presentation highlights features of."— Presentation transcript:

1 2015 Filing Update BILLINGS REGIONAL OFFICE BILLINGS, MONTANA PHONE: (406) 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.

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4 Summary of Farm Bill Changes CLICK ON 4

5 Farm Bill – Coverage by Irrigation Practice  You may have separate Enterprise Units for irrigated and non- irrigated 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 and PM for guidance 5

6 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

7 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 8

9 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

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18 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,

19 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

20 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 post- secondary 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

21 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

22 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  percent coverage levels (80 and 85 levels require 3 or more commodities)  Premium rate discounts for multiple crop diversification  Reference: MGR

23 Farm Bill – Whole Farm Revenue Protection 23 Comparison FeatureAGR-LiteWFRP Liability Limit$1 Million$8.5 Million Animal LimitNone35% of expected revenue up to $1 million (maximum) Replant PaymentNoneUp to 20% of expected revenue for annual crop with 20 acres or 20% of crop needing replant Other Federal Crop Insurance OptionalOptional – at any buy-up level; no CAT level MPCI allowed Market readiness amounts in insured revenue NoYes Expanding operationsNoAverage historic revenue increased by10% if operation is expanding and approved by AIP Premium SubsidyBasic LevelWhole-Farm Level w/ 2 or more commodities

24 Whole Farm Revenue Protection Availability 24

25 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

26 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

27 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 T- Yield 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

28 APH Yield Exclusion 28

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30 Non-Irrigated Soybean YE Availability

31 Additional Information – 31

32 Summary of Filing Changes 32

33 Rate, Reference Yield and T-Yield Reviews  Fall Crops:  Alfalfa Seed  Spring Crops:  Canola  Millet  Mustard  Potatoes  Safflower  Sugar Beets 33

34 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

35 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

36 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

37 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

38 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

39 Trend Adjustment Participation 39 StateCrop2013 Policies w/TA 2014 Policies w/TA MontanaWheat North DakotaWheat Canola Corn Sunflowers Soybeans 4,029 1,077 5, ,632 5,859 1,549 5, ,276 South DakotaWheat Corn Grain Sorghum Sunflowers Soybeans 3,041 18, ,926 3,409 18, ,172 WyomingCorn4496

40 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

41 Annual Forage – PM  New program (North Dakota and South Dakota) in 2014  Covers annually planted crops for livestock feed and fodder which are either mechanically harvested, grazed or a combination  Farm Bill 12305(b)(1)(B) prohibits CAT coverage for crops and grasses used for grazing  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

42 Alfalfa Seed  Crop Provisions revised to incorporate changes made converting the program to permanent status  Crop Provisions replaced pilot provisions  Updated definition to include forage seed produced as hybrid seed 42

43 Specialty Canola, Corn, Soybeans  MGR (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

44 Canola – North Dakota  “No Irrigation Practice Specified” changed to “Irrigated” and “Non- irrigated”  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

45 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 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

46 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

47 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

48 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

49 Dry Peas  “No Irrigation Practice Specified” changed to “Irrigated” and “Non- irrigated”  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

50 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 Chico Frontier Luna and other Kabuli Chickpea varieties not otherwise designated. 50

51 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

52 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

53 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

54 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

55 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

56 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

57 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

58 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

59 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

60 2014 Harvest Prices Announced CommodityHarvest PriceChangeProjected Price Barley$3.16/bushel▼21.6%$4.03/bushel Canola$0.168/pound▼8.6%$0.184/pound Canola, Rapeseed$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

61 ARPI Popcorn (South Dakota) ARPI Plans 04, 05, and 06CCIP Plans 01, 02, and 03 61

62 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

63 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

64 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

65 Top 10 South Dakota Insured Crops in 2013 (by planted acres) 65

66 CY 2013 Loss Ratios - Corn 66

67 CY 2013 Loss Ratios - Soybeans 67

68 CY 2013 Loss Ratios - Wheat 68

69 CY 2013 Loss Ratios - Sunflowers 69

70 CY 2013 Loss Ratios - PRF 70

71 Questions? 71


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