2022 ERP & ELRP Have Been Announced

Last Friday, USDA announced 2022 ERP will be rolled out soon. We don't have all the details but will review what we do know.

On Friday May 19, USDA announced some details for 2022 Emergency Relief Program (ERP) and Emergency Livestock Relief Program (ELRP). The actual program has not been released as far as how to apply, etc. but we can review what we know now.

2022 ERP for Crop Producers

This will be very similar to 2020 and 2021 ERP. If you participated in crop insurance and received a payment, they will automatically increase the payment. We don’t know by how much or other details, but it will be streamlined just like previous ERP.

For those who did not collect crop insurance proceeds, we now have the dreaded Allowable Gross Revenue (AGR) to deal with. You will need to show some type of decrease in revenues due to a qualifying disaster, but we don’t know what the reference year or years will be. Will it again by the higher of 2018 or 2019 or will it refer to 2020 or 2021.

The issue with using tax return information to compare years is that farmers typically defer income in good years and bring in part of that deferred income in bad years. This tends to distort the amount of “loss” that a farmer might show. It appears that FSA continues to not understand this principle and relies only on tax information. Until they fix this issue, the amount of payment under “phase 2” will be likely lower than their expectations.

We think this will happen with 2020 and 2021 ERP Phase 2 payments. They will be lower than expected which means there may some type of top off on Phase 1 payments. Too soon to know for sure.

2022 ELRP for Livestock Producers and Close Out of ELRP for 2021

If a ranchers suffered at least a D2 drought (severe) or higher during 2022 for at least eight weeks, they will qualify for ELRP. Also, if wildfires destroyed their forage will be a qualifying event too. This assumes they had already applied for the 2022 Livestock Forage Program (LFP).

Producers will not be required to apply for payment. They essentially will have an increased payment automatically delivered to them.

Additional assistance will be issued to producers for 2021 drought or wildfires. No details on how or when on this assistance.

Timing

The release indicates that additional details will be available in the “coming months”.