PRODUCT MANAGEMENT BULLETIN: PM–16-063
United States Department of Agriculture
Farm and Foreign Agricultural Services
Risk Management Agency
1400 Independence Avenue, SW
Stop 0801
Washington, DC 20250-0801
Date
To:
All Risk Management Agency Field Offices
All Other Interested Parties
From:
Subject:
- Background
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The CEPP peanut factors necessary to establish the insured’s amount of protection under the peanut program for the 2017 CY are identified below. The factors are applied to the commodity prices for wheat, cotton, soybean oil, and soybean meal during the discovery period of December 15, 2016 to January 14, 2017. These factors apply only to states with a Sales Closing Date (SCD) of January 31, 2017. They are determined in accordance with the Peanut Price Methodology guidelines published and available at: www.rma.usda.gov/policies/2015/15-cepp-pt.pdf.
- Action
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The factor values for the pricing of Yield Protection (01), Revenue Protection (02), and Revenue Protection with Harvest Price Exclusion (03) for peanuts in states and counties with a January 31, 2017 SCD as specified in the CEPP for the 2017 crop year are shown below.
The values for the exponent factors for each commodity exchange futures contract are:
Commodity Abbreviation Value Wheat
𝐸wh -0.4811 Cotton
𝐸ct
0.1813 Soybean Oil
𝐸so 1.0652 Soybean Meal
𝐸sm
-0.2065 The values for the price constant and price weighting factors are:
Variable Abbreviation Value Price Constant
𝐶 0.1691 Price Weighting Formula
𝑊 0.5292 The values for the type factors are:
Type
Abbreviation Value Runner
𝑇ru 1.00 Spanish
𝑇sp 1.31 Valencia
𝑇va 1.07 Virginia
𝑇vi 1.07 Additionally, the factor specifications for commodities utilized to determine price volatility are as follows:
Commodity Abbreviation Value Wheat
𝐺wh -0.2372 Cotton
𝐺ct
0.7054 Soybean Oil
𝐺so 0.3766 Soybean Meal
𝐺sm 0.3254 The value for the volatility weighting factor is:
Variable Abbreviation Value Volatility Weighting Factor
𝑉 0.5080 DISPOSAL DATE:
December 31, 2017