Understanding the Silage Sorghum Insurance Program

Who can be insured?

1)       The crop insured will be on all of the silage sorghum planted in the county for which a premium rate is provided by the county actuarial documents, in which the insured has a share; and:

a.       That is adapted to the area based on days to maturity and is compatible with agronomic and weather conditions in the area; and:

b.       That is planted for harvest as silage, and is not:

                                                               i.      a grain sorghum hybrid (a variety insurable under the terms of section 5(d) of the Coarse Grains Crop Provisions);

                                                              ii.      a variety developed for haying or grazing only;

                                                            iii.      interplanted with another crop; or

                                                             iv.      planted into an established grass or legume.

2)       Any acreage of the insured crop damaged before the final planting date, to the extent that the majority of producers in the area would normally not further care for the crop must be replanted unless the insurance provider agrees that it is not practical. Refer to the Loss Adjustment Manual (LAM) for replanting provision issues. Refer to Section 4 of this handbook for replanting payment procedures.

3)       No written agreements may be authorized under the Pilot Silage Sorghum Endorsement to modify any terms of the contract or to extend coverage to any county for which actuarial documents are not filed.

Knowing Some Key Definitions

Approved Yield	The actual production history (APH) yield, calculated and approved by the verifier, used to determine the production guarantee by summing the yearly actual, assigned, adjusted or unadjusted transitional yields and dividing the sum by the number of yields contained in the database, which will always contain at least four yields. The database may contain up to 10 consecutive crop years of actual or assigned yields. The approved yield may have yield adjustments elected under section 36, revisions according to section 3, or other limitations according to FCIC approved procedures applied when calculating the approved yield.
Approved (indexed) Yield	The insureds approved yield as defined in the Common Crop Insurance Policy Basic Provisions multiplied by the yield index.
Average County Yield	If the insured reported at least four years of actual production history, the sum of the county average yields shown in the actuarial documents for the same years for which the insured reported actual production history divided by the number of years that the insured reported. In all other cases, average county yield is the sum of the county average yields shown in the actuarial documents for the last ten crop years divided by ten.
County Average Yield	The estimate of the average productivity per acre of silage sorghum for a previous crop year contained in the actuarial documents. This value represents the estimated total production of silage sorghum in the county divided by the estimated planted acres for a crop year.
County Expected Yield	A value included in the actuarial documents that represents the estimate of the county average yield that would be achieved for the crop year under normal production conditions. This value is based on statistical analysis of the trends in production in the county.
Yield Index	The ratio calculated by dividing the county expected yield by the average county yield.
	The Yield Index is used to adjust the Approved APH Yield for purposes of calculating the production guarantee (per acre) for Silage Sorghum.
Buyer	A business enterprise regularly engaged in feeding livestock for the production of animals or animal products, that possesses all licenses and permits that may be required to operate the business, and that fed a sufficient number of livestock to utilize at least the contracted quantity of silage in the twelve months ending on the acreage reporting date for the crop year, and in which you or a member of your household has no financial interest.
Coarse grains	In addition to the definition of coarse grains contained in section 1 of the Coarse Grains Crop Provisions, for the purposes of this Endorsement only, the term coarse grains includes silage sorghum.
Maximum price election	The price determined by multiplying the price election for corn silage by 80 percent.
Production guarantee (per acre)	In lieu of the definition of production guarantee (per acre) contained in section 1 of the Coarse Grains Crop Provisions, the term production guarantee (per acre) means your approved (indexed) yield per acre multiplied by the coverage level percentage you elect.
Silage sorghum purchase contract	An agreement between a buyer of silage sorghum and you executed in writing on or before the final planting date for a crop year containing, at a minimum:
	(a) Your promise to plant silage sorghum and deliver a specified quantity or the production from a specified number of acres to that buyer;
	(b) The buyers promise to purchase the stated amount of silage sorghum from you; and
	(c) Either a fixed price per ton of the silage sorghum or a formula to determine its price. Any formula for establishing the value must be based on data provided by a public third party that establishes or provides pricing information to the general pubic, based on prices paid in the open market (e.g., commodity futures exchanges), to be acceptable for the purpose of this policy.
Yield index	The ratio calculated by dividing the county expected yield by the average county yield.

Other Things You Need to Know

Insurance Guarantees, Coverage Levels, and Prices for Determining Indemnities

In addition to the requirements of section 2 of the Coarse Grains Crop Provisions, you may elect a price election for all of your silage sorghum grown in the county on insurable acreage based on:

1)       The maximum price election; or

2)       The price specified in your silage sorghum purchase contract subject to the following:

a.       The silage sorghum purchase contract must cover all of your share of the production guarantee from the insurable acreage of silage sorghum in the county;

b.       If the price received under your silage sorghum purchase contract exceeds $2.00 over the maximum price election, your price election will be $2.00 over the maximum price election; and

c.        If you select the contract price, you may use one of the following options subject to paragraph (2):

                                                               i.      If your silage sorghum purchase contract contains only a fixed price, that fixed price will be your price election;

                                                              ii.      If your silage sorghum purchase contract contains both a fixed price and a formula-determined price, the formula driven price can be your price election only if the price under such formula can be determined not later than the final planting date, otherwise your fixed price will be your price election; or

                                                            iii.      If your silage sorghum purchase contract contains only a formula-determined price, the formula driven price will be your price election only if the price under such formula can be determined not later than the final planting date, otherwise your price will be the maximum price election.

Cancellation and Termination Dates

In accordance with section 2 of the Basic Provisions, the cancellation and termination dates are the same as stated in section 4(a) of the Coarse Grains Crop Provisions for corn and grain sorghum.

Insurance Period

In addition to section 7(c) of the Coarse Grains Crop Provisions, for all counties where silage sorghum is produced, the calendar date for the end of the insurance period is the October 15 immediately following the date the crop is planted.

Replanting payments

In addition to the provisions contained in section 9 of the Coarse Grains Crop Provisions, the maximum amount of any replanting payment per acre insured under this endorsement will be the lesser of 20 percent (20%) of the production guarantee per acre or 1.0 ton, multiplied by your price election, and by your insured share or the share determined in accordance with the provisions of section 9(c) of the Coarse Grains Crop Provisions, whichever is applicable.

Report of Acreage

In addition to the requirements of section 6 of the Basic Provisions, if you have a silage sorghum purchase contract, you must provide a copy of all such contracts on or before the acreage reporting date. If you fail to provide a copy of the silage sorghum purchase contracts on or before the acreage reporting date, the price election for all your silage sorghum will be the maximum price election.

Duties in the Event of Damage or Loss

In addition to the requirements in section 14 of the Basic Provisions, you must notify us at least seven (7) calendar days prior to any acreage of the silage sorghum crop being utilized in any manner other than for the production of silage. Other uses may include (but are not limited to) harvest as grain or hay, or grazing. You must leave representative samples of the crop for our inspection. We will assign an appraisal of not less than the production guarantee for any such acreage you do not provide the required notices or if you do not leave the required number and size of representative strips.

Settlement of Claim

The provisions in section 11 of the Coarse Grains Crop Provisions will apply to the silage sorghum covered by this Endorsement unless otherwise specified herein.

1)       In addition to the crops listed in section 11(b)(1) of the Coarse Grains Crop Provisions, the provisions in section 11(b)(1) will also apply to silage sorghum covered by this Endorsement.

2)       In addition to the provisions of section 11(c) of the Coarse Grains Crop Provisions, the production to count of silage sorghum will be measured in tons.

3)       Sections 11(d), (e), and (f) of the Coarse Grain Crop Provisions do not apply to silage sorghum.

4)       In addition to the provisions contained in section 11 of the Coarse Grains Crop Provisions, all production to count of silage sorghum will be increased to a 32 percent dry matter basis equivalent (68 percent moisture basis) if it is harvested or appraised after the normal end of the harvest period or after the calendar date for the end of the insurance period.