Quality Loss Exclusion Option (QL)

The Quality Loss Option Endorsement is now available as a coverage option on the MPCI Coverage pages (Add New Policy, Add/Maintain/View Coverage) when available in the actuarials.

When QL is elected on the coverage, users will have the ability to elect "QL" for an applicable Crop Year within the APH database (a) using the APH Utilities grid and key Pre-Quality Production and Pre-Quality Yield values (b).

For the 2021+ RY, any time a Pre Quality Production and/or Yield value is applied to a CY (c), the QL indicator ("Q") will be set for that CY. This indicator displays in the Pre Quality column next to the CY that qualifies for QLO because PreQuality information is available. It does not mean QLO is actually applied to a given CY(s). Only the QL checkbox (shown with a above) indicates QLO is actually applied to a CY(s).

NOTE: An APH is eligible for the Quality Loss Exception Option as long as a Notice of Loss (NOL) was filed during the Crop Year the quality reduction occurred. QL can apply to prior CYs with quality losses in the current year’s APH database (with supporting documentation).

Once set, the only time the QL checkbox can be removed for a given CY is if the Pre Quality Production and Pre Quality Yield values are both removed for that CY. This determination will happen upon save of the APH database.

When More Than One Option Applies

The System WILL NOT allow for yield floors to be applied if the “QL” option is applied within the APH. The APH will only allow 1 of the 3 crop options available to be selected for a Crop Year (QL, YA, and/or YE). The user may elect all three BUT only ONE option can be applied to an actual yield for an eligible Crop Year (CY) within the database. If a CY qualifies for all 3 elections:

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YE will apply unless the Grower excludes YE.

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If YE is excluded QL will apply unless the Grower excludes QL.

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IF QL is excluded, include pre-quality production, BUT do not include the pre-quality actual yield.

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If QL is excluded and the Crop Year (CY) qualifies for YA, YA will apply (using the standard Yield for that CY).

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If the Grower excluded YA, use the NA yield type as normal.

Written Agreements are eligible for Quality Loss unless it is not available for that County/Crop; the Written Agreement types of TC, TP or XL will not be allowed with Quality Loss.

The System was updated for MY, PTY, CC/SF, and SA T-yield functionality to account for the new Quality Loss (QL) procedures. The new procedures for QL state the simple average calculation will use the adjusted yield in the simple average calculation rather than the approved yield IF the QL option is applied to the APH. If QL option is not applied to the APH the approved yield will be used in the simple average calculations. The Master Yield (MY), Personal T-yield (PTY), CC/SF, and SA T-yield calculations were updated: 

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Master Yields (MY) are a summary APH database that are created by the System when the user selects to create a Master Yield (MY) via the Additional Functions dropdown on the detail lines tab. This summary APH database is the combined history (up to 10 years) of all APHs for the same practice/type/t-yield map area. The approved yield calculated for the MY is then applied to all APHs for the same practice/type/t-yield map area (non-summary units). The new Quality Loss (QL) procedures say to apply the QL replacement to the eligible actual yields before the annual yields from non-summary APH databases have been summarized on the MY summary. No change is needed as QL will be submitted on non-summary records, which is how the System currently works, and the approved yield will still match across all Master Yield summary records. Note, Master Yields are only available for certain state/crops.

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Personal T-Yields (PTY) are also a summary APH database created by the System when the user selects to create a PTY unit via the Additional Functions dropdown. This summary unit is also a combined history (up to 10 years) of all APHs for the same practice/type/t-yield map area. However, rather than the approved yield being applied as the approved yield on the non-summary APHs, the approved yield calculated for the PTY summary unit is used in place of the t-yield for non-summary units with less than 4 years of actual/assigned history and/or to determine the adjusted yield for YA. PTY is only available in North Dakota. The new Quality Loss (QL) procedures state that the pre-quality yields are not used to determine the PTY summary unit. The standard production and actual yield values are used for calculating the PTY summary unit, pre-quality amounts are not used.

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When APHs exist for both a continuous cropping (CC) practice and a summer fallow (SF) practice in a state/county with separate t-yields by CC and SF practices, the CC/SF rule allows the SF APH database to utilize the “higher” of the approved yield calculated for the CC APH or that calculated for the SF APH proved less than three years of history exist in the SF APH.

The new procedures for the QL option state the quality loss (QL) option must be applied to both the CC and SF APH databases, if applicable, prior to determining the “higher” approved yield to be used for the SF practice APH. Note: Similar functionality for YE to apply YE before determining the “higher” yield was implemented with TFS 20359, and also for YC with TFS #82973.

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SA T-Yield may be applicable when a new APH database is created for a crop, practice or type the producer has grown within the farming operation, but not within the unit or APH database and/or when land is added to the insured’s farming operation. If either of these scenarios exist and the agent or AIP determines a simple average applies, the user will set the APH Override to ‘New Crop P/T’ or ‘Added Land – Simple Average’. The system then takes the user through a series of questions to determine if the APH qualifies for an SAT-Yield. If the APH qualifies and if the simple average is higher than standard t-yield, the system applies the SAT-Yield.

The SA T-Yield is calculated as the average of all yields for APH databases for the same crop/practice/type/t-yield map area (TMA). For APH databases that are not utilizing a trend adjusted (TA option) yield and do not have a year for which a yield has been excluded (YE option), the approved yield is used in this calculation. For APHs with a trend adjusted yield and/or a year that has been excluded, the adjusted yield is used in the calculation. The Trend Adjustment calculation uses the QLO pre-quality yield when determining the TA limit.