Author: Joe Outlaw

While far from over, the House version of the President’s reconciliation package—referred to by the President as the “One Big, Beautiful Bill”—contains significant improvements to the farm safety net.  We have previously discussed in Southern Ag Today the dire need for an improved farm safety net for this crop year, either from a farm bill or through this process.  As we write this, House leadership is still working to secure votes for passage.  Once that happens, the Senate will need to pass their version of the bill.  Assuming the House and Senate pass different bills, the differences would need to be reconciled and the conferenced bill would need to again be passed by both the House and the Senate before going to the President to be signed into law.  This sounds daunting, but one of the key elements of reconciliation (and why it has been used by both parties) is that the Senate only needs a simple majority (51) to pass the bill, whereas a normal bill would require 60 votes. 

The House reconciliation bill includes quite a few changes to the current 2018 Farm Bill that has been extended through September 30, 2025.  In terms of the farm safety net, the two primary commodity programs—Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC)—are extended through the 2031 crop year.  Most importantly, reference prices are increased 10% to 20% depending upon the commodity.  Reference prices would also increase 0.5% annually beginning in 2031, recognizing the need to keep up with inflation in the future.

The ARC coverage guarantee would be increased from 86% of the benchmark to 90%, and the payment band would increase from 10% to 12.5%.  The first change would make payments trigger sooner, and the second change would increase the amount of the payments.  Loan rates for most commodities would also be increased.

Combined payment limits for ARC and PLC would be increased from $125,000 to $155,000 and would be adjusted annually for inflation. The bill would also eliminate the LLC penalty (i.e., eliminate the payment limit on pass-through entities while maintaining the payment limit on owners of the entity) as previously highlightedin Southern Ag Today.

Premium assistance for crop insurance would see increases for individual yield or revenue coverage across all coverage levels.  The Supplemental Coverage Option (SCO) would also see an increase in premium subsidy from 65% to 80%.

The House bill also contains language to allocate a maximum of 30 million additional base acres to producers who have been planting more acres than they have base acres on farms. 

The bill has many other agriculture related provisions, but those listed above—if enacted—would strengthen the producer safety net beginning with the 2025 crop.

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Outlaw, Joe, and Bart L. Fischer. “Much Needed Producer Assistance in the House Reconciliation Bill.” Southern Ag Today 5(21.4). May 22, 2025. Permalink

Long before the 2018 Farm Bill expired on September 30, 2023, there appeared to be one voice among the entire U.S. food and fiber system asking Congress to get a new farm bill completed that would provide producers an improved safety net with meaningful protection from low prices, bad yields or both.  Since that time, the economic condition of U.S. crop farms has deteriorated significantly due to low prices and high costs as reported in Southern Ag Today here and here.  Now, the farm bill appears to be stalled behind other priorities, namely a budget reconciliation bill that will provide the funding needed to extend the expiring Trump tax cuts that were enacted in the President’s first term and to beef up border security, among other priorities.

As part of the budget reconciliation process, the instructions to the House Agriculture Committee were to cut $230 billion from the baseline over ten years while the instructions to the Senate Agriculture Committee were to cut at least $1 billion over ten years.  Figure 1 provides estimates of the 10-year baseline from FY 2025 to FY 2034 to provide some perspective on projected spending across farm bill titles.  The expectation is that Title IV (the nutrition title) of the farm bill is where the majority of savings will originate.  It should be noted that the farm bill that passed out of the House Agriculture Committee last year and the Senate Republican farm bill proposal added around $55 billion (House) and $40 billion (Senate) in spending above the baseline to make the safety net stronger, in addition to other enhancements.

It appears that some parts of the House and Senate farm bill proposals might be able to be added to the budget reconciliation bill.  The exact details of how that might happen are not entirely clear, but it does appear that option is being considered.  Suffice it to say that, in our opinion, that is the only realistic pathway to achieving meaningful enhancements to the farm safety net for the 2025 crop.  There are some who worry this might fragment the farm/food coalition that has generally worked together to get a farm bill across the finish line.  We would, however, point out that the coalition fell apart during the 2014 Farm Bill debate in the House of Representatives, where two separate bills (a nutrition bill and a farm-only bill) had to be passed out of the full House and then combined again during the conference process with the Senate.  While we recognize the importance of all parts of the farm bill, in the name of trying to protect a very vulnerable crop production sector, Congress may wish to consider moving away from all or nothing this time around.

Figure 1.  Farm Bill Titles with Mandatory Baseline, 10-Year Projected Outlays, FY2025-FY2034, billions.

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Outlaw, Joe, and Bart L. Fischer. “Does it Have to Be All or Nothing in Farm Policy?” Southern Ag Today 5(17.4). April 24, 2025. Permalink

Every once in a while, the stars align and our elected officials, political appointees, and career USDA employees get it right and, in this case, right on time.  On December 21, 2024, President Biden signed the American Relief Act of 2025—the continuing resolution (CR) that funds the government through March 14, 2025, and extended the 2018 Farm Bill provisions through September 30, 2025—into law.  Also included in the CR was $10 billion for economic assistance for farmers and $20 billion to cover losses due to natural disasters.  In a nod to the dire conditions in the countryside, Congress stipulated that USDA had 90 days to get the program developed and the assistance flowing.  Agricultural committee leadership in both the House and Senate kept the pressure on Congressional leadership to include help for our nation’s struggling farmers, and Congress delivered.  All that needs to be said is “well done and thank you.”

Between the time the CR was signed into law and Secretary Rollins was confirmed, career USDA-FSA employees were working on developing implementation details and software updates so they could meet the Congressional mandate of 90 days.  Once confirmed, Secretary Rollins made getting the funding out by the deadline one of her top priorities.  Again, all that needs to be said is “well done and thank you.”

As was reported by every agricultural news outlet, on March 18, 2025—and ahead of schedule—USDA-FSA announced that signup was open for the Emergency Commodity Assistance Program (ECAP), the economic disaster part of the CR that will provide up to $10 billion to eligible producers.  This program provides economic assistance payments to eligible producers of specific commodities to help mitigate the impacts of increased input costs and falling commodity prices during the 2024 crop year.  Specific program details are available from USDA here (https://www.fsa.usda.gov/resources/programs/emergency-commodity-assistance-program).

As my colleagues and I have written in Southern Ag Today multiple times over the past six months, the assistance was badly needed, and I know it is much appreciated.  Now farmers are beginning to email with questions about the timing and potential benefits from the natural disaster program.  I know that the Secretary and USDA are working diligently to finalize this program, but I have a favor to ask in the interim: send a “thank you” email to House and Senate Agricultural Committee leadership (and their staff) and Secretary Rollins thanking them for their hard work on getting this much needed assistance out the door.  All of their emails are easy to find, and if you do that you also deserve a … “well done and thank you.”

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Outlaw, Joe. “Signup for Economic Assistance Announced… Producers Turn Their Focus to Physical Disaster Assistance.” Southern Ag Today 5(13.4). March 27, 2025. Permalink

While on the road doing preplant meetings around the country, one of the questions we’ve been asked the most by farmers is: with reduced farm profitability, why haven’t land values declined?  Over the past year, there have been two Southern Ag Today articles that have addressed different parts of this issue.  Kim discussed the trends in Southern farmland values while Loy and Biram addressed the relative profitability of U.S. farms, looking at the disparity between crop prices received and input prices paid.  Table 1 indicates that, while not very often, Southern state cropland values have occasionally decreased (indicated by numbers in parentheses) over the past nine years. 

The question of why land values haven’t reacted to reduced profits requires a multifaceted answer that most farmers don’t like to hear.  The first part of the answer is that land values should follow farm profitability to a degree, but farm profitability isn’t the only factor. Long-term interest rates – or the cost of borrowing money – also matters.  With current interest rates relatively high, there should be downward pressure on farmland prices.

The part of the answer they like the least is also where we tend to get agreement from them: farmers are not the only people trying to buy farmland.  During almost every one of our Agricultural and Food Policy Center (AFPC) representative farm updates, the farm panel members talk about how hard it is to buy land at prices that can realistically be paid back with expected farm profits.  So, who else is buying land?  Nonfarm real estate investors such as publicly traded farmland real estate investment trusts (REITs), insurance companies, and just about anyone who wants to use real estate as an investment are actively investing in farmland across the United States.  The two farmland REITs that people talk about the most are Farmland Partners and Gladstone Land. Both REITs own land in multiple states.

Farmland values and agricultural profitability are related, but in today’s farmland markets, there are many other factors and players that influence the value of U.S. farmland.

Table 1.  Change in Southern State Cropland Values, Annually from 2016 to 2024.

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Outlaw, Joe, and Bart L. Fischer. “Why Haven’t Land Values Reacted to Reduced Farm Profits?” Southern Ag Today 5(7.4). February 13, 2025. Permalink

The current outlook for the major row crops in the U.S. is pretty dismal.  The Agricultural and Food Policy Center (AFPC) at Texas A&M University has been working with farmers across the country since 1983 to develop representative farms in major production regions.  Currently, AFPC maintains the data to analyze 92 crop (64) and livestock (28) operations in 30 states (Figure 1). From the beginning, the representative farms have been utilized to conduct “what if” policy analyses for the House and Senate agricultural committees to help craft agricultural legislation.  Another use of the farms is to provide policymakers with an early warning system or agricultural barometer under current policy conditions.  AFPC has partnered with and uses price projections from the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri to project the financial wellbeing of the representative farms.

In the 42 years that AFPC has been projecting farm financial performance, the most recent crop outlook for the representative farms is the worst in terms of the number of farms in each of the four commodity types (feed grains, cotton, rice and wheat) that are not currently expected to have a positive cash flow over the next 5 years.  What makes this so troublesome is there is not a crop that producers can switch to from their current crops that would generate a positive return.  In other downturns, we would see producers that can grow several types of crops taking market signals and moving to more profitable crops.  Part of developing representative farms is collecting all of the cost information for the farms.  This makes it possible to develop cost of production data for each of the crops being produced on the 64 representative crop farms.  The bottom line is very few of the representative farms appear to have profitable crops on them at prices that are projected by FAPRI for the 2025/26 marketing year – which is very troublesome.  While the economic and natural disaster assistance provided in the recent American Relief Act of 2025 will help in the near term, the need for a significant enhancement to the farm safety net over the next 5 years is imperative… and the sooner the better.

Figure 1.  AFPC Representative Crop and Livestock Farms.

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Outlaw, Joe L., and Bart L. Fischer. “Why the Current Economic Downturn is So Troublesome.” Southern Ag Today 5(5.4). January 30, 2025. Permalink