Actual production history (APH)

APH is the reference yield of a US crop policy: the simple average of yields actually produced and documented over four to ten consecutive years, by unit and by crop. It goes straight into the guarantee. An 80% Revenue Protection policy on a 180-bushel APH covers 144 bushels valued at the price. The rules around it say everything about the tradeoff between fairness and selection. Without four years of records, RMA fills the gaps with a county transitional yield (T-yield), often discounted. A disaster year can be replaced by 60% of the T-yield, which censors bad years and pulls the average up. The 2014 Farm Bill opened a more generous option, the yield exclusion: the grower can drop a year in which the county yield fell at least 50% below its ten-year average. In the corn example published by RMA, APH goes from 100 to 108 bushels once 2011 and 2012 are excluded. RMA raises the premium rate for those who elect exclusion, since the guarantee goes up. A cap also limits the year-over-year decline, and a floor protects farms that string bad years together. For an actuary, APH is a low-credibility estimate: ten data points at most, autocorrelated, with no trend adjustment by default. Not to be confused with the European Olympic average, which drops the best and worst of the last five years.