INFORMATIONAL MEMORANDUM: PM17-071




1400 Independence Avenue, SW
Stop 0801
Washington, DC  20250-0801

Date

December 08, 2017

To:

All Approved Insurance Providers
All Risk Management Agency Field Offices
All Other Interested Parties

From:

Richard H. Flournoy Deputy Administrator /s/ Richard H. Flournoy    12/8/2017

Subject:

2018 Crop Year Commodity Exchange Price Provisions (CEPP) – Peanut Factors - January 31, 2018 Sales Closing Date
BACKGROUND:

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 December 15, 2017 to January 14, 2018. These factors apply only to states with a Sales Closing Date (SCD) of January 31, 2018. They are determined in accordance with the Peanut Price Methodology guidelines published and available at www.rma.usda.gov/policies/2015/15-cepp-pt.pdf.

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, 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  Ewh  -0.1683
 Cotton  Ect  0.3282
 Soybean Oil  Eso  0.7470
 Soybean Meal  Esm  -0.3787

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

Variable Abbreviation  Value 
Price Constant C 0.1685
Price Weighting Formula W 0.9443

The values for the type factors are:

Type Abbreviation  Value 
Runner Tru 1.00
Spanish Tsp 1.31
Valencia Tva 1.08
Virginia Tvi 1.08

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

Commodity Abbreviation  Value 
Wheat   Gwh  -0.0178
 Cotton  Gct  0.8643
 Soybean Oil  Gso  0.1975
 Soybean Meal  Gsm  -0.5615
                             

The value for the volatility weighting factor is:

Variable Abbreviation  Value 
Volatility Weighting Factor V 4.8144
           
USDA is an Equal Opportunity Employer and Provider