Corn salvage benefit for DON in 2018

​​​​​​​​​​​​​​November 1​4​, 2018 | Updated: November 15, 2018

The corn salvage benefit for 2018 covers cases where DON (deoxynivalenol) levels in harvested corn exceed five parts per million (5 ppm). The benefit is designed to help producers cover costs to harvest and then market, use as feed or find an alternative use for damaged corn.

Many producers have high corn yields for 2018. In these cases, the number of eligible bushels for the corn salvage benefit is the lesser ​of the customer's:

Production Insurance yield guarantee

OR

​Production Insurance yield guarantee minus total harvested bushels under 5 ppm

In cases where a customer's total harvested yield falls below their guarantee, they may be eligible for a salvage benefit for their bushels with DON levels over 5 ppm. They may also receive a production claim.  

While considering how the salvage benefit will work for individual situations, producers need to understand their claim positions and marketing options. See, "Consider your situation" section below.

How the salvage benefit works for DON-affected c​​​orn

For the 2018 crop, the corn salvage benefit will apply to harvested corn with DON levels over 5 ppm. The combined sum of bushels under 5 ppm and bushels covered by the salvage benefit cannot exceed a customer's guaranteed production.

Customers will be paid $0.79 per eligible bushel to cover the extraordinary costs of corn with DON levels over 5 ppm.  

To be eligible, customers must have supporting documentation, including weigh slips and DON level tests, and will be paid once their yield is finalized. 

Example calculations for scenarios

Scenario 1: Total yield of corn below and above 5 ppm is less than the guaranteed production

• Your guaranteed production (GP) is 10,000 bushels.
  
• Your total yield is 9,000 bushels.
  
• 6,000 bushels are under 5 ppm and 3,000 bushels are over 5 ppm.
  

Calculation​

Your salvage benefit is calculated as follows:

Claim

Through Production Insurance, the corn salvage benefit would cover all 3,000 bushels, totalling $2,370, which would help the producer achieve a total yield of 9,000 bushels. The producer would also receive a production claim on the 1,000-bushel shortfall from their guaranteed production.

Scenario 2: Total yield of corn below and above 5 ppm exceeds the guaranteed production 

• Your guaranteed production (GP) is 10,000 bushels.
  
• Your total yield is 12,000 bushels.
  
• 8,000 bushels are under 5 ppm and 4,000 bushels are over 5 ppm.
  

Calculation

Your salvage benefit is calculated as follows:

Claim

Through Production Insurance, the corn salvage benefit would cover 2,000 bushels, totalling $1,580, as this is the number of damaged bushels that are required in order to help the producer achieve their yield guarantee. 

Scenario 3: Total yield of corn below 5 ppm exceeds the guaranteed production

• Your guaranteed production (GP) is 10,000 bushels.
  
• Your total yield is 12,000 bushels.
  
• 11,000 bushels are under 5 ppm and 1,000 bushels are over 5 ppm.
  

Calculation

Your salvage benefit is calculated as follows:

Claim

No claim is payable. The producer's yield of corn under 5 ppm exceeds their guaranteed production and, therefore, they are not eligible for the salvage benefit or a production claim.

Consider your situation

Corn yields for 2018 are well above average, so it's important for farmers to know their claim position and marketing options before they make decisions about what to do with their crop. High yields may offset low yielding fields due to DON and result in no payment.

If a farmer's corn is affected by DON, they should call Agricorp immediately to report the damage. Agricorp adjusters are responding to customer reports on a priority basis, within two business days. Agricorp recommends customers take the following steps to support a Production Insurance claim investigation:

1. Take representative sa​mples. 
   DON levels are highly variable from region to region, from field to field, and within fields.
2. Have a DON level test completed.
3. Consider your opti​​ons.
   • What markets are available? While markets for some DON levels may not be available right now, this is changing daily.
   • Should I dry and store my crop until a market becomes available?
   • What is my Production Insurance claim position? Will my final yields be above or below my Production Insurance guarantee?
   • How many bushels above and below 5 ppm did I harvest compared to my guarantee?​
   • If I decide to market, use as feed or find an alternative use for my crop, will the corn salvage benefit help cover the costs?
4. ​ Confirm your decision with Agricorp.
   Adjusters can help producers understand their claim position and walk them through the process.​

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