RMA TO BEGIN USING PACK FACTORS

WASHINGTON, Jun 29, 2004 - Based on recommendations from a recent study, RMA will incorporate FSA pack factors into the appropriate loss adjustment standards handbooks for the 2005 crop year for corn, soybeans, wheat, rice, oats, barley, grain sorghum, canola, flax, mustard, safflower, sunflower seed, crambe, lentils, peas, and chickpeas.

Pack factors help account for the fact that grain settles or packs when stored. Risk Management Agency (RMA) contracted with Milliman USA, Inc. to perform a pack factor review, determine whether pack factors should be used in determining the amount of farm-stored production for crop insurance purposes, and make recommendations.

The Milliman study (PDF, 1207 Kb) recommended utilizing the existing Farm Service Agency (FSA) pack factors, which have been used in farm loans and other FSA programs. Pack factors increase the overall accuracy of the loss adjustment process, provide a more equitable distribution of payments to producers, and help data reconciliation attempts with FSA. This process will also align the two agencies more closely when determining the level of farm-stored production.

Questions, comments, or concerns should be addressed to Dave Bell, Chief, Loss Adjustment Standards Branch at 816-926-2397, or Dave.Bell@rma.usda.gov.