Master Yield (MY)

Master Yield (MY)

Here is a brief summary of what the Master Yield (MY) is all about from our friends over at RMA:

Master yields are based on acreage and production history from all acreage of the insured crop in the county in which you have/had a share in the crop’s production on the same basis as your approved yield. When applicable, your master yield will be your approved yield as authorized by approved FCIC procedures.

How a Master Yield works.

Basic “Rules”

• Master Yields are not available for all crops in all counties.  Refer to the table below for a current (at the time of writing this article) list of Approved Crops by State.

• Master Yields are not eligible on Catastrophe (CAT) policies
• Master Yields are for the County, Crop, Type, Practice, and Map Area
  • Cannot have a combination of Master Yields and Approved Yields*
    • *Acreage emerging from a USDA program (such as CRP), New Breaking acreage – initial year, or Native Sod.
      • These will have their own Approved Yields independent of the Master Yield.
    • *”Acreage transitioning to organic without an organic plan or written documentation from an organic certifying agent.”
• Master Yields follow the Operator (more on this later).
• Deadline to add/apply for the Master Yield is the Production Reporting Deadline (PRD) for the County, Crop, Practice, and Type.
  • The request must be signed by the farmer, and received no later then 30 calendar days after the PRD.
• Must have a minimum of 4 Years of Actual Production history for the County, Crop, Practice, Type, AND Map Area your are applying for.

Master Yields follow the Operator.

Understanding what/who the Operator is.

The following is directly from RMA’s MY presentation:

• Operator is the individual with largest insurable interest in the crop

  – If two or more individuals share equally and make management decisions

  equally, both will be considered operators

  ■ All operator history from both individuals will be combined for the master yield

Defining the Operator is crucial to understanding how the Master Yield program works.  You must be able to prove who the Operator is, typically by using the Named Insured and/or Significant Business Interests (SBI’s) on the crop insurance policy itself.

Once you define who the Operator is you can then, and MUST, use ALL of the history that Operator has for the appropriate County, Crop, Practice, Type, and Map Area.  You cannot pick and choose which history to use or not use.  ALL of the history must be used.  This is particularly important when the Operator is involved in multiple entities!

RMA does an outstanding job of explaining how the Operator process works in their 2023 Master Yield Certification Training Presentation.  I do not have a link to this presentation, so I am not certain if I can publish it on my website.  However, if you reach out to me directly I can share with you the presentation that all AIP Underwriters, crop insurance agents, etc. have access to.

Example

Let’s take a look at some made up entities, and their history to see how their Master Yields will play out.  Keep in mind that all of this data is made up, including the entity names and history.

Assumptions:

Let’s assume that all of the entities are growing the same crop, type, map area, in the same county.  Let’s also assume that all of this work is being done prior to the crop’s Production Reporting Deadline (PRD) as well.

Entities:

• Sarah Johnson – individual
• Michael Chen – spousal
• Green Harvest Farms
  • Owned 100% by Sarah Johnson
• Golden Fields Agriculture
  • Owned 100% by Michael Chen
• Harmony AgriSolutions
  • Partnership – 50% Sarah Johnson / 50% Michael Chen

Operators:

Based on the above information, and some behind the scenes verifications, we have determined that Sarah Johnson is an Operator on her policy, Green Harvest Farms policy, and Harmony AgriSolutions policy.

We have also determined that Michael Chen is an Operator on his policy, Golden Fields Agricultures policy, and Harmony AgriSolutions policy as well – RMA allows for two Operators if 50/50.

Master Yields (MY):

Sarah’s Master Yield (MY):

• Sarah’s history + Green Harvest Farms History + Harmony AgriSolutions

Michael Chen’s Master Yield (MY):

• Michael’s history + Golden Field Agriculture + Harmony AgriSolutions

Harmony AgriSolutions Master Yield (MY):

• Harmony AgriSolutions + Sarah’s history + Michael’s history + Green Harvest Farms History + Golden Field Agriculture

APH Databases for illustrative purposes:

Master Yields (MY):

Sarah’s Master Yield (MY): 43.8

• Sarah’s history + Green Harvest Farms History + Harmony AgriSolutions

Michael Chen’s Master Yield (MY): 49.9

• Michael’s history + Golden Field Agriculture + Harmony AgriSolutions

Harmony AgriSolutions Master Yield (MY): 47..7

• Harmony AgriSolutions + Sarah’s history + Michael’s history + Green Harvest Farms History + Golden Field Agriculture

Takeaways

Master Yields (MY) can get fairly tricky once you start identifying and pulling in Operator history.  You must pull in ALL Operator history for that particular crop, in that particular County.  You cannot pick and choose.

Disclaimer

There are a lot of rules behind this program, so the above information is very high level.  You will want to take a deeper dive into understanding the program before making a purchasing decision.  Keep in mind the above information is for informational purposes only, and does not replace anything found in the Crop Insurance Handbook, Loss Adjustment Manual, RMA’s website, etc.  Always consult the Crop Insurance Handbook, Loss Adjustment Manual, RMA’s website, etc. before making a purchasing decision.  Any discrepancy between the above information and the policy is not intended.  The information provided in this article does not supersede policy and procedure.  Any changes to the policy and procedures may make this material obsolete.