Program Submission Response: NAP NCT prices

ISSUE:

Handbook 1-NAP paragraph 4B states STC shall establish average market prices and payment factors at least 120 calendar days before the sales closing date for the crop.

FACTS:

The average market prices and payment factors are not posted until after the closing date so producers have no way to accurately estimate risk management.

SOLUTION:

Set the software to lock the prices loaded by 120 days before the sales closing date for the crop.

NATIONAL OFFICE RESPONSE:

Thank you for your submission.  The purpose of the requirement to have the STC establish the average market prices and payment factors at least 120 calendar days before the application closing date for the crop is so producers will know the potential coverage and can make an informed decision as to whether or not obtaining NAP coverage is a good risk management tool for them in advance of the application closing date.  It was because of this requirement that the rules were changed to no longer require the most recent crop year when establishing the price or yield because we knew those prices and yields might not be available far enough in advance to establish the crop data timely.

Based on the issue that was raised in your email, it seems as though the applicable state does not understand the importance of not only establishing the average market price and payment factors, but updating that information in the NCT in a timely manner.  We will look for the best method to communicate to State Offices the importance of both of those things because as the submitter indicated, producers should be aware of their potential coverage in advance of making the decision of whether or not to obtain NAP coverage.