By Ariel Singerman
Between the 2021–22 and 2023–24 citrus seasons, Florida orange growers were more likely to receive indemnity payments under the Actual Production History (APH) crop insurance policy compared to the Dollar Amount policy. Moreover, when indemnities were paid, the APH policy provided a higher average payout. This raises the question: Will APH continue to be advantageous for Florida orange growers in the future?
THREE KEY CONSIDERATIONS
There are three important considerations that growers should consider going forward.
First, APH standards include a procedure for testing the grower’s yield history for a downward trend. If the conditions for this test are met, and the adjustment is triggered, the grower’s APH yield will be reduced by 20%.
Second, there is a minimum production requirement for acreage to be insurable under APH. Currently, blocks that are at least eight years old must have produced at least 100 boxes per acre in one of the three previous seasons. There is an ongoing discussion that the requirement will be lowered to 75 boxes per acre. If a block does not meet the requirement, a request could be submitted to Risk Management Agency (RMA) to obtain coverage. However, in such cases, the determined yield may not exceed 80% of the average yield for the APH database.
Third, due to the continued negative impact of HLB on Florida citrus yield, the net indemnities under APH are decreasing over time. This is because premium rates are increasing and APH yield is decreasing.
Looking ahead to future seasons, some growers may have blocks that either trigger the downward trend test adjustment or fail to meet the RMA’s minimum production requirement. In both cases, the grower’s APH yield would be reduced by 20%, which will make any potential APH net indemnities significantly smaller, if any.
In addition, if yields improve in some blocks in response to oxytetracycline trunk injections, the probability of receiving substantial net indemnities, as in previous seasons, decreases.
TAKE-HOME MESSAGE
Growers are encouraged to carefully evaluate their own APH databases to determine the optimal APH coverage level for their groves in future seasons. The crop insurance sales closing date is Nov. 1.
Ariel Singerman is an associate professor and Extension economist at the University of Florida Institute of Food and Agricultural Sciences Citrus Research and Education Center in Lake Alfred.
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