How is the policy trigger revenue calculated in an Area Revenue Protection with Harvest Price Exclusion (ARPwHPE) plan?

In an Area Revenue Protection with Harvest Price Exclusion (ARPwHPE) plan, the policy trigger revenue is calculated using the expected county yield multiplied by the projected price. This method is used because it allows for revenue determination based on average expected yields within a specific area and the projected market price for the crop for that growing season. The expected county yield reflects the average yield that farmers in the area can anticipate based on historical data, while the projected price is determined before planting and reflects the market conditions expected during the harvest.

This approach helps to establish a benchmark for the revenue that can be expected from the crop, which is essential for risk management in agriculture. The projected price and expected yield work together to give farmers information regarding the revenue safety net they have put in place through their insurance policy. Other options may not provide the same level of tailored protection and understanding of potential revenue.