Yield Exclusion (YE) and Trend Adjustment (TA)

In the world of federal crop insurance, the Actual Production History (APH) is the cornerstone of most policies. It determines the amount of coverage a producer can buy and the premium they will pay. However, a single year of extreme weather—such as a localized drought or a widespread flood—can drag down a producer's APH for several years, resulting in lower coverage levels when they need protection the most. This is where enhancements like Yield Exclusion (YE) and Trend Adjustment (TA) come into play.

These options are designed to make the APH more representative of a producer's actual productive capacity by either removing statistical outliers or adjusting for technological advancements in farming. For students preparing for the exam, understanding the mechanics of these adjustments is crucial, as they directly impact the calculation of the Approved Yield. For a broader overview of how these fit into the federal program, refer to our complete Crop exam guide.

Yield Exclusion (YE), formally known as the Actual Production History Yield Exclusion, allows a producer to exclude a specific crop year from their APH database if the county yield (or a contiguous county's yield) for that year was at least 50 percent below the average of the previous 10 consecutive crop years.

Key characteristics of Yield Exclusion include:

• Automatic Eligibility: The Risk Management Agency (RMA) determines which years in which counties are eligible for exclusion. Producers do not have to prove their own loss; they simply need to be in an eligible county for that specific year.
• Impact on APH: When a year is excluded, it is removed from the calculation entirely. The average is then calculated based on the remaining years in the database.
• Contiguous Counties: If a county is eligible for YE, the exclusion is also available in all adjacent (contiguous) counties.

By removing these "disaster years," the producer's APH remains higher, which provides a more accurate reflection of their yield potential during normal growing conditions. You can test your knowledge on YE triggers by visiting our practice Crop questions.

The Trend Adjustment (TA) option recognizes that farming technology—such as improved seed genetics, better fertilizers, and advanced machinery—improves yields over time. Without TA, a producer's 10-year APH would be weighted down by older yields that do not reflect current capabilities.

The TA option allows a producer to increase their historical yields in the APH database by a fixed amount for each year. The Trend Adjustment Factor is determined by the RMA for specific crops and counties. For example, if the TA factor for corn in a specific county is 2.0 bushels, the producer can add 2.0 bushels to the yield from one year ago, 4.0 bushels to the yield from two years ago, and so on, up to the maximum years allowed in the database.

Important Note: TA is generally only available for yields that are based on actual production records, not for assigned yields or transitional yields (T-Yields).

Producers often have the option to use both Yield Exclusion and Trend Adjustment on the same policy, provided the crop and county are eligible for both. When used together, the YE is applied first (removing the bad year), and then the TA is applied to the remaining years to bring them up to current standards.

To utilize these options, the producer must:

• Elect the Option: This must be done by the Sales Closing Date for the crop.
• Pay Additional Premium: There is typically a higher premium cost associated with these options because they result in a higher liability for the insurer (since the Approved Yield is higher).
• Follow Administrative Guidelines: Producers must have at least one year of actual yields in their database to qualify for certain adjustments.