Let’s run through the question: Why Does Yield Exclusion Matter?, especially this year.
One of the highlights of the 2014 Farm Bill is the response to producer’s requests to find a way to lessen the impact of successive years of low crop yields due to circumstances beyond our control. Yield Exclusion (YE) is the provision that allows that request to be addressed in most cases. However, for you as a wheat producer to be ready to take a look at the pro’s and con’s to YE, there are some very critical things you need to be aware of:
6 Critical Issues
- The opportunity to exclude and particular year is dependent on your county’s disaster status and yields for that year, not your own production.
- The USDA determines ahead of time the years that specific crops are eligible for YE in your county. That information is available thru your crop insurance agent.
- You can opt out in all eligible years, or just the ones that benefit you. Election is available on a crop by crop, farm by farm and year by year basis.
- In most cases, participating in YE will result in higher per acres guarantees, but also higher insurance premiums per acre. The degree of increases is determined by producer and farm.
- ALL of your production history must be in the Crop Insurance Companies database in order to get a summary by farm as to how much your guarantee and premium will increase if you choose to elect some or all of the years eligible. THIS INCLUDES PRODUCTION FOR 2015 WHEAT CROP!!
- Getting your production recorded early is vital, because you have only until Sales Closing Date of Sept 30th, 2015 to add YE to your policy if you want to utilize that option. Typically, unless we have a claim, production is not reported until October or the production reporting deadline of Nov 15th.
Early Recording Is The Key
The key, once again, is to get all of your production history recorded early this year in order to have time to evaluate the advantages and disadvantages of YE on a farm-by-farm basis. –
Here is an example of how Yield Exclusion would work:
Current APH History
APH Years = 10 years to count
APH Years after YE = 7 years to count
An increased guarantee on crop yields is a key improvement for many producers. With the increased cost of inputs and the lagging commodity prices, it can often be the difference in securing enough operating money to provide the best opportunity for a successful crop. For many, the YE option will be a beneficial option to use, but for others the increase in cost will not justify the additional guarantee.
Again, Early Recording Is The Key
The key, once again, is to get all of your production history recorded early this year in order to have time to evaluate the advantages and disadvantages of YE on a farm-by-farm basis.
As always, if you have any questions regarding the new opportunity to use Yield Exclusion, or if you have questions or concerns about anything else that we can help you with please feel free to contact us by phone, email, or just drop by and visit.