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Product Management Bulletin-PM-18-005

Date
To
All Approved Insurance Providers
All Risk Management Agency Field Offices
All Other Interested Parties
From
Richard H. Flournoy, Deputy Administrator
Subject
2018 Crop Year (CY) Commodity Exchange Price Provisions (CEPP) – Peanut Factors – March 15, 2018 Sales Closing Date

The CEPP peanut factors necessary to establish the insured’s amount of protection under the peanut program for the 2018 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 February 1, 2018 to February 28, 2018. These factors apply only to states with a Sales Closing Date (SCD) of March 15, 2018. They are determined in accordance with the Peanut Price Methodology guidelines.

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 March 15, 2018 SCD as specified in the CEPP for the 2018 crop year are shown below.

The values for the exponent factors for each commodity exchange futures contract are:

Commodity Abbreviation Value
Wheat ??ℎ -0.1639
Cotton ?ct 0.3255
Soybean Oil ??o 0.7505
Soybean Meal ??m -0.3793

The values for the price constant and price weighting factors are:

Variable Abbreviation Value
Price Constant ? 0.1614
Price Weighting Factor ? 1.2818

The values for the type factors are:

Type Abbreviation Value
Runner Tru 1.00
Spanish Tsp 1.31
Valencia Tva 1.11
Virginia Tvi 1.11

Additionally, the factor specifications for commodities utilized to determine price volatility are as follows:

Commodity Abbreviation Value
Wheat Gwh -0.0304
Cotton Gct 0.5179
Soybean Oil Gso 0.1198
Soybean Meal Gsm -0.3501

The value for the volatility weighting factor is:

Variable Abbreviation Value
Volatility Weighting Factor V 7.3651