Information on falling numbers for wheat

Wheat harvest
30 Aug 2019
The 2019 wheat crop is proving to be a challenge for our area. The Special Provisions have many details on how claims and discounts will be handled. I have summarized the falling numbers discounts below. This summary is not inclusive of all of the fine print and details or additional discount factors that may apply, such as test weight under 50 or vomitoxin over 2.0 ppm. My focus is on falling numbers because that seems to be the largest issue at this time.

As always keep your production records separate by section (even if you have enterprise units) and keep samples by section. If you are delivering to an elevator ask that they put together and save a sample for each section (a blend from each load from the section) so that you can have a federal grain inspection test on each section. If you are storing on your farm and need to commingle sections the adjuster will pull a sample for each storage structure. The test done for each bin will apply to the sections that are commingled in that bin, so keep good records. If you have some very low falling numbers do your best to keep them in a separate bin if other fields have good falling numbers.

If your falling numbers range from 299 to 200 there is a table for what the discount factor will be. The falling numbers test needs to be done by a federal grain inspector.

Falling Number Range Discount Factor (DF)
299-275 0.052
274-250 0.086
249-225 0.121
224-200 0.155
Below 200 See Reduction in Value Below

Keep in mind for crop insurance purposes when production is discounted for falling numbers it is not eligible for a sprout damage discount. (You can only use one of the two discounts because the poor falling numbers are due to sprout damage.)

If your falling numbers are below 200 the adjuster uses a process that has 3 parts.

1. If you sell by the end of the insurance period (10-31) you will get a Reduction in Value (RIV) which is the price you receive, after deducting all discounts applied by the buyer, due to insurable quality deficiencies, divided by the local market price.

EXAMPLE

Price you receive after discounts: $3.60
Local Market Price: $4.60
Quality Adjustment Factor $3.60/$4.60 = .78
Prod to count 10,000 bu. * .78 = 7800 bu

2. If unsold at the end of the insurance period, 10/31 the discount factor will be 0.5 unless you elect to delay settlement 60 days to 12/30.

3. If you elect to delay settlement 60 days and production is still unsold (12-30) the discount factor will be 0 .5. If the production is sold during the 60 day extension, prior to 12-30, you will use the RIV in #1 above.

Ginger Harris
Written By: Ginger Harris
Sr. Insurance Specialist