How Will 2022 Track 2 Allowable Gross Revenue be Calculated?

There are several changes to how allowable gross revenue will be calculated under 2022 ERP Track 2

Photo by Jon Flobrant on Unsplash

We have previously posted many times on how allowable gross revenue (AGR) is calculated under 2020/21 ERP Phase 2.

We now have the 2022 ERP Track 2 rules and there are some major changes compared to 2020/21 ERP Phase 2.

First, under 2020/21 ERP Phase 2, 2018 or 2019 benchmark revenue was multiplied by 70%. Under Track 2, this number will be 90% if the farmer paid for crop insurance. This is a major benefit to farmers.

Most of the other calculations for AGR are the same, however, hedging gains are now allowed to be counted. Not sure if hedging losses are excluded or not.

You will still be required to remove livestock related income and other USDA payments not related to crop production.

You will also still reduce crop insurance proceeds by crop insurance premiums and fees paid even if this results in a negative.

If your acres substantially increased or decreased in 2022 compared to 2018 or 2019, then substantial paperwork will likely be required. Those calculations are beyond the scope of this post. You will need to review the FSA application and related instructions to determine how to calculate revenue under those conditions.

Note that the progressive payment adjustment will be applied to any calculated payment amounts which means that most farmers will be lucky to receive 10-15% of their claims assuming their calculated amount is greater than $50,000 or so.