Florida citrus growers have been hit hard by HLB, or citrus greening. For the 2023-24 season, the USDA estimated Florida citrus growers had harvested 17.96 million boxes of oranges. Compared to the 244 million boxes harvested in the 1997-98 season, it’s easy to see that Florida citrus is in dire straits. While growers wait to see yield and quality increases from OTC injections and researchers continue work into treatments and solutions, Florida citrus growers would be wise to consider the federal crop insurance called Actual Production History (APH) insurance.
APH Insurance Defined
APH insurance differs from the more popular dollar amount insurance; the USDA Risk Management Agency began offering APH insurance as another option for Florida citrus growers in 2022.
The APH option uses the average of a grower’s yield from the prior 10 seasons — called the APH approved yield — to create the policy. Both the policy’s guarantee—the yield amount the insurance will cover—and the premium—the cost of the coverage for the grower policy holder—are set by the APH approved yield.
A Dollar Amount policy, in contrast, provides coverage using a referenced maximum dollar amount per acre that is set by RMA.
Comparing Oranges to Oranges
UF/IFAS associate professor and Extension economist Ariel Singerman crunched the numbers to compare the two insurance policies using data from the 2022-23 season. In that season, 1,198 dollar amount policies were issued to Florida citrus growers; the largest percentage — 60%, or 723 grower policy holders — bought a policy with 60% coverage. This represented 157,810 acres, or 72% of all the acreage covered under the Dollar Amount policies. The average premium was $15.98 an acre.
In the 2022-23 season, at the 60% coverage point for Dollar Amount insurance, 226 policies, or 31%, received a payoff under the policy; the average payoff was $110 an acre.
On the other hand, under the APH insurance, there were a total of 209 policies issued. The second largest percentage —34%, or 72— of grower policyholders chose 60% coverage; this represented 18,863 acres or 49% of the acres covered under the APH insurance. The average premium was $11.69 an acre.
In the 2022-23 season, at the 60% coverage point for APH insurance, 48 policies, or 67%, received a payout from the insurance; the average payout was $459 an acre.
To sum it up, first, APH policy holders paid a smaller—albeit similar—premium compared to Dollar Amount policy holders. Then, nearly double the percentage of growers receive a payoff under APH versus Dollar Amount policies; and, lastly, those growers that did receive a payoff were given an amount that was over four times greater than the payoff growers received under the Dollar Amount insurance.
While Florida citrus growers wait for all of the research into treatments and cures of the last several years to pay off in terms of citrus yield and quality, they should consider APH insurance to increase their Federal crop insurance payoff safety net.
