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Product Management Bulletin-PM-15-006 2015 Crop Year Commodity Exchange Price Provisions – Peanuts Factors – March 15, 2015 Sales Closing Date

Date
To
All Approved Insurance Providers
All Risk Management Agency Field Offices
All Other Interested Parties
From
Tim B. Witt, Deputy Administrator /s/ Tim B. Witt
Subject
2015 Crop Year Commodity Exchange Price Provisions – Peanuts (CEPP) Factors – March 15, 2015 Sales Closing Date

Background

The Federal Crop Insurance Corporation Board of Directors approved the CEPP for revenue peanuts beginning with the 2015 CY. The factors necessary to establish the insured’s amount of protection under the peanut program for the 2015 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, 2015 to February 28, 2015. These factors apply only to States with a Sales Closing Date (SCD) of March 15, 2015. They are determined in accordance with the Peanut Price Methodology guidelines published in November 2014.

 Action

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, 2015 SCD as specified in the CEPP for the 2015 crop year are shown below. The values for the exponent factors for each exchange commodity futures contract are: 

CommodityAbbreviationValue
WheatEwh-0.2974
CottonEct0.3072
Soybean OilEso0.9704
Soybean MealEsm-0.4297

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

VariableAbbreviationValue
Price ConstantC0.1514.
Price Weighting FormulaW4.1276

The values for the type factors are:

TypeAbbreviationValue
RunnerTru1.00
SpanishTsp1.33
ValenciaTva1.16
VirginiaTvi1.16

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

CommodityAbbreviationValue
WheatGwh-0.0647
CottonGct0.5811
Soybean OilGso0.0717
Soybean MealGsm-0.2271

The value for the volatility weighting factor is:

VariableAbbreviationValue
Volatility Weighting FactorV3.0392

DISPOSAL DATE:
December 31, 2015