All Risk Management Agency Field Offices
All Other Interested Parties
Background
The CEPP peanut factors necessary to establish the insured’s amount of protection under the peanut program for the 2016 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, 2015 to January 14, 2016. These factors apply only to States with a Sales Closing Date (SCD) of January 31, 2016. They are determined in accordance with the Peanut Price Methodology guidelines published and available at: www.rma.usda.gov/policy-procedure/crop-policies/commodity-exchange-price-provisions-peanuts-15-cepp-pt.
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 January 31, 2016 SCD as specified in the CEPP for the 2016 crop year are shown below.
The values for the exponent factors for each exchange commodity futures contract are:
| Commodity | Abbreviation | Value |
|---|---|---|
| Wheat | 𝐸𝑤ℎ | -0.2557 |
| Cotton | 𝐸ct | 0.3137 |
| Soybean Oil | 𝐸so | 0.8784 |
| Soybean Meal | 𝐸sm | -0.4014 |
The values for the price constant and price weighting factors are:
| Variable | Abbreviation | Value |
|---|---|---|
| Price Constant | 𝐶 | 0.1541 |
| Price Weighting Formula | 𝑊 | 2.5619 |
The values for the type factors are:
| Type | Abbreviation | Value |
|---|---|---|
| Runner | 𝑇ru | 1.00 |
| Spanish | 𝑇sp | 1.41 |
| Valencia | Tva | 1.20 |
| Virginia | 𝑇vi | 1.20 |
Additionally, the factor specifications for commodities utilized to determine price volatility are as follows:
| Commodity | Abbreviation | Value |
|---|---|---|
| Wheat | Gwh | -0.2988 |
| Cotton | Gct | 0.8104 |
| Soybean Oil | Gso | -0.0715 |
| Soybean Meal | Gsm | 0.6046 |
The value for the volatility weighting factor is:
| Variable | Abbreviation | Value |
| Volatility Weighting Factor | 𝑉 | 0.6161 |
DISPOSAL DATE:
December 31, 2016