Here's How the Indemnity Plan Works
It's based on depreciation value of the hen coupled with the future egg production as specified in 9 CFR part 56.4 (a) (1).
When calculating the depreciation value, using the pullet costs in cents per dozen, starting in 2014 down to 2010, that value is 9.53, 10.13, 10.14, 9.51, 8.26 for a hen's deprecation value average of 9.51 cents per dozen.
Future egg production is based on whether you have Hyline W-36 or Lohlman-Lite. At 95 weeks of age, both will produce just over 36 dozen eggs. The 5-year average profit starting with 2014 down to 2010 is 33.17 cents, 9.35, 0.02, 2.20, and 7.57 for an average profit per dozen at 10.46 cents.
With the depreciation value and future egg production, we can start calculating indemnity.
At 20 weeks of age, the hen is most valuable. Her depreciation value is based on 9.51 cents per dozen eggs she would have produced or a value of $3.42 (9.51 x 36 dozen). Her production (36 dozen eggs) expected would have been valued at (36 x 10.46) is $3.77.
At 20 weeks, we expect federal indemnification to be $7.19 per bird. That's the peak value and will go down for each week of age before depopulation. At the 95th week of age her value is the last dozen eggs she produces 10.46 cents and 9.51 cents (hen depreciation) for a total of 19.97 cents.