December 2018

Production evidence for market facilitation program and crop insurance

Farmers are wrapping up harvest and applying for payments available with the new Market Facilitation Program (MFP). There are a couple things to keep in mind before you go to your local FSA office. The new form CCC-910 requires an actual production number by crop and the source of production evidence. You do not need to submit your records to the FSA.

The MFP is self-certification program, subject to spot check of your production evidence. This would be similar to the Loan Deficiency Payment (LDP) that farmers used extensively from 1996 through 2006. The easiest source of production evidence is likely "soft records" that crop insurance requires prior to determining if a crop insurance loss is likely. These records are typically yield monitor data or scales on grain carts with proof of calibration. Also, consider the use of self- measured grain bins in addition to scale tickets. The FSA doesn’t require you to come into their office with "hard records" verified by a third party. Examples include warehouse receipts, settlement sheets and certified grain bin measurements.

However, FSA will want you to use the net production or net weight of those bushels. This simply means they want production adjusted for dry weight bushels. So, you’ll adjust the gross production of wet bushels down to 13 percent moisture soybeans and 15 percent moisture corn just as you do for crop insurance purposes.

Expect to see soybean crop insurance claims

The USDA’s Risk Management Agency (RMA) recently released its harvest prices for figuring potential 2018 crop insurance losses to farmers who have revenue policies. These prices are $8.60 per bushel for soybeans and $3.61 per bushel for corn, respectively. These are the simple average daily closes in the month of October for November soybean and December corn futures.

That soybean price as compared to the spring projected price of $10.16 per bushel is a decline of over 15 percent. If your average 2018 soybean production was equal to your Actual Production History (APH) and you elected an 85 percent coverage level, you are at that threshold for a revenue loss payment. Expect several farmers to trigger losses for soybeans resulting from the adverse weather this past growing season. However, your crop insurance agent needs to know your production by farm in order to determine that potential loss payment.

Consider submitting these same "soft records" used for the MFP to your crop insurance agent. Use the same records with FSA that you used initially for crop insurance purposes and reduce both time and effort.

What about the soybean quality issues?

Some soybean fields were damaged by heavy rains just prior to harvest. Beans might have developed mold that added to foreign material or splits prior to being delivered to an elevator or processor. Depending on the amount of damage, there might have been a crop insurance loss payment for quality. Hopefully you notified your crop insurance agent about those concerns prior to harvest.

Elevators and processors may charge farmers soybean quality discounts beyond the moisture adjustment from gross production to net production. Most of these discounts are a reduction in the price per bushel - dollars and cents.

Consider visiting your FSA office and apply for the MFP payment as soon as you finish harvest and have actual production records compiled by crop. Keep in mind you are going into the office with one number, actual production by crop and indicate the source of production evidence.

Steven D. Johnson, retired extension farm management field specialist


Steven D. Johnson

retired extension farm management field specialist
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