PRODUCT MANAGEMENT BULLETIN: PM18-002




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

Date

January 11, 2018

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    1/11/2018

Subject:

2018 Crop Year Commodity Exchange Price Provisions (CEPP) – Peanut Factors – February 28, 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 January 15, 2018 to February 14, 2018. These factors apply only to states with a Sales Closing Date (SCD) of February 28, 2018. They are determined in accordance with the Peanut Price Methodology guidelines.
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 February 28, 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  -0.2345
 Cotton  Ect  0.3156
 Soybean Oil  Eso  0.8031
 Soybean Meal Esm  -0.3768

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

Variable   Abbreviation Value 
 Price Constant  C  0.1676
 Price Weighting Factor  W  0.9927

The values for the type factors are:

Type
Abbreviation Value
Runner Tru 1.00
Spanish Tsp
1.31
Valencia Tva 1.13
Virginia Tvi 1.13

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

Commodity Abbreviation Value
Wheat Gwh -0.2345
Cotton Gct 1.1547
Soybean Oil
Gso 0.4442
Soybean Meal
Gsm -0.0701

The value for the volatility weighting factor is:

Variable Abbreviation Value
Volatility Weighting Factor
V 0.4401
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