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Durum Wheat Pricing Methodology

Summary

Durum wheat is not a traded commodity on any futures exchange. With the design of the 2011 Common Crop Insurance Policy Basic Provisions (Basic Provisions) it is necessary to calculate a price in real time based on a commodity futures exchange. Risk Management Agency’s (RMA) authority to derive this factor is found in the Commodity Exchange Price Provisions (CEPP) which utilizes an exchange price multiplied by a factor “as determined by RMA” to establish the durum prices. This paper is to inform stakeholders regarding the methodology used to derive this factor.