Category: Ag Law

As pressure for change in use on historically agricultural lands continues unabated, state and local governments and agricultural stakeholders wrestle with the extent prime soils classification may legally factor into development plans and permitting decisions to discourage changes in surface use. Prime farmland soils are generally defined by USDA, under authority of the Farmland Protection Policy Act (FPPA) via 7 CFR § 657.5, as possessing the optimal physical and chemical characteristics for high-yield food and fiber production. Prime soils have renewed focus as a policy matter at the intersection of utility-scale solar development and agricultural production, with efforts to limit their non-farm use and mitigate their impact. 

As a matter of federal policy, the FPPA requires federal agencies (such as the FAA or HUD) to minimize the “unnecessary and irreversible conversion” of prime soils to non-agricultural uses. Designation manifests through the Land Evaluation and Site Assessment (LESA) system, which scores potential sites. Projects exceeding a specific threshold are flagged, theoretically forcing agencies to consider alternative locations that spare high-quality soils. 

State governments have used prime soils (sometimes designated as soils of statewide importance) to positively score conservation easements applications, though prime soils as a factor in restricting development patterns (e.g. housing densities) and permitting decisions may draw more challenges. In Virginia, prime soils designation has found policy footing in the solar development realm with a new statutory and regulatory mitigation requirement for disturbed prime soils in solar development, requiring a 1:1 ratio of land to be protected under conservation easement (or a fee in lieu to fund conservation easement protection) for each acre developed, as a permitting requirement. It is yet to be seen what legal challenges lie ahead for that mitigation policy. Beyond the solar development realm, one may continue to expect local governments in some states to factor in prime soils as a land attribute that guides development, and perhaps legal challenges may illustrate whether such actions amount to impermissible land use regulations under constitutional takings standards.

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Branan, Robert Andrew. “Prime Soils Mitigation for Solar Development.” Southern Ag Today 6(9.5). February 27, 2026. Permalink

The European Deforestation Regulation (EUDR) has been postponed once again for another calendar year, but effects of the regulation are already being seen with Southern agricultural and timber lands. Forestland owners in the south are being told they may need to sign an attestation stating they will not convert their timberland to pasture or row crop production after timber is harvested. Failure to sign the attestation may bar a landowner from selling their timber if that product could end up in the European Union (EU). Because many larger timber and paper companies do business with the EU, this regulation could greatly limit the number of potential timber buyers in a geographical area or eliminate them entirely.

The EUDR is a regulation passed by the EU back in May 2023. The stated goal of the regulation is to reduce the EU’s impact on global deforestation and degradation by prohibiting the importation into the EU of certain products produced on land deforested or degraded after Dec. 31, 2023.

The products of importance to southern agriculture consist of wood, cattle, and soybeans. Companies importing these goods to the EU will need to certify that their products do not contribute to deforestation or degradation of forested lands.  Companies that are in violation of the new regulation are subject to potentially stiff financial penalties, including confiscation of the product being sold, up to 12 months of exclusion from the EU public procurement process, and fines up to 4% of the company’s total annual EU turnover from the preceding year after the fine is assessed. With penalties this large at stake, companies are looking for ways to comply with the EUDR, and the burden is being shared with southern landowners. 

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Rumley, Rusty. “The European Deforestation Regulation and the Impact on Southern Agriculture.” Southern Ag Today 6(5.5). January 30, 2026. Permalink

There are a number of considerations for farmers and ranchers when it comes to estate planning.  Things like determining the fair market value of their estate for tax purposes, or deciding the best way to organize their operation to ensure success for the next generation, or selecting the right person to serve as their medical power of attorney all come to mind.  One issue that is easy to overlook, however, is the importance of keeping beneficiary designations up to date.

There are certain assets that pass by contract outside the will, which are known as “non-probate assets.”  Common examples of these types of assets include life insurance policies, Transfer on Death bank accounts, and retirement accounts with a designated beneficiary.  For these assets, it is the beneficiary designation that will govern distribution at the person’s death, regardless of what a will or other estate planning tool might say.

An example of how failure to keep beneficiaries up to date was illustrated well in a 2016 case from the Dallas Court of Appeals in Texas.^[1]  There, Mr. Switzer passed away in 2014 with a will leaving everything to his wife, Patricia.  Prior to his marriage to Patricia, he was hired at the United States Postal Service, and a benefit of that employment was a life insurance policy.  He, being unmarried at the time, named his co-worker and then-girlfriend, Kay, as his beneficiary.  When Patricia contacted the life insurance company following his death, she learned that Mr. Switzer never made any updates to his beneficiary designations.  Despite his being married to Patricia and his will leaving everything to her as his wife, the life insurance was a non-probate asset and would only be paid to the designated beneficiary, the ex-girlfriend, Kay. 

It is easy to sign up for benefits or designate beneficiaries when a job is started early in one’s career, and then simply never look back to determine if those beneficiaries are up to date.  For many people, a substantial portion of their estate value is governed not by a will, but by these beneficiary designations.  Take the time today to do an audit of your own beneficiary designations to ensure they are current and reflect your wishes. 

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^[1] Switzer v. Vaughan, No. 05-15-00811-CV, Memorandum Opinion (Tex. Ct. App. – Dallas July 27, 2016). 

By: National Agricultural Law Center Attorney Staff

Agricultural law in 2025 was marked by developments with lasting implications for producers, agribusinesses, and rural communities. Attorneys at the National Agricultural Law Center have identified the following major trends that shaped the year.

• State restrictions on foreign ownership of farmland continued to expand. Six states amended existing laws and four enacted new restrictions, at the same time courts considered constitutional challenges. Recent cases involving Florida and Texas laws were dismissed on standing grounds, leaving the broader legal questions unresolved.
• Federal agencies proposed sweeping changes to environmental law. In November, EPA and the U.S. Army Corps of Engineers released a proposed revision to the definition of “waters of the United States” under the Clean Water Act, aligning it with the Supreme Court’s 2023 decision limiting jurisdiction to “relatively permanent” waters with a continuous surface connection. Meanwhile, the Fish and Wildlife Service and National Marine Fisheries Service issued four proposed rules revising Endangered Species Act implementation, including species listing, critical habitat designation, interagency consultation, and elimination of FWS’s blanket 4(d) rule for threatened species.
• Congress also reshaped hemp regulation through appropriations legislation that closed the “hemp loophole” created by the 2018 Farm Bill. The law redefined hemp based on total THC content and excluded synthesized cannabinoids such as delta-8 and delta-10, significantly affecting an industry largely focused on cannabinoid production when the changes take effect in November 2026.
• Food policy gained attention through the Make America Healthy Again (MAHA) movement, led federally by HHS and echoed by states. Legislative efforts included new food labeling requirements, restrictions on ingredients in school meals, bans on synthetic food dyes, and proposals to limit SNAP-eligible foods through USDA waivers.
• Pesticide litigation remained a major issue, particularly whether the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) preempts state “failure to warn” tort claims. While manufacturers argue federal label approval preempts liability, plaintiffs contend FIFRA requires adequate health warnings. The Supreme Court may resolve the issue in Monsanto Co. v. Durnell, with the Solicitor General urging review and preemption.
• Trade policy also shifted as the Trump Administration increased tariffs using the International Emergency Economic Powers Act (IEEPA). This unprecedented use of IEEPA authority was challenged in V.O.S. Selections, Inc. v. Trump, argued before the Supreme Court in November, while potential trade agreements remain preliminary.
• Labor issues intensified with changes to the H-2A foreign agricultural worker program. A court vacated the 2023 Adverse Effect Wage Rate rule, prompting reversion to an older formula and subsequent issuance of a new interim final rule, now subject to legal challenge.
• EPA actions on pesticide registration and labeling continued, including issuance of its Insecticide Strategy, proposed dicamba label revisions, and litigation over herbicides and neonicotinoids that could affect future availability.
• Competition concerns spanned the agricultural supply chain. DOJ and USDA investigated meatpacker conduct, while scrutiny expanded to seed, chemical, and fertilizer markets. In December, President Trump ordered agencies to investigate anticompetitive behavior across food industries.
• H.R.1—the One Big Beautiful Bill Act—reauthorized key farm bill programs, increased reference prices and payment limits, strengthened crop insurance, and made major tax provisions permanent, including an inflation-indexed increase to the estate tax exemption.

Looking ahead to 2026, many of the top issues from this past year will continue to develop. Additional areas to watch are challenges to Prop 12 and related statutes on issues of preemption, interest in state legislatures around the labeling and sale of cell-cultured proteins, and updates to the Colorado River operating plan.  We also expect to see issues related to financial distress in the farm economy and state level responses, such as amending or creating grain indemnity laws and financial assistance programs.  A link with more information about each of these stories is available at https://bit.ly/48SRX0p. 

Introduction

In October 2025, the IRS announced the revised federal estate tax exemption and gift tax limit for 2026.  The federal estate tax exemption will rise from $13.99 million in 2025 to $15 million in 2026.  The federal gift tax exclusion will remain at $19,000 per recipient.  Whether the value of a person’s estate falls above or below that limit, it is critical to develop an estate plan to assist in transitioning the farm to the next generation. Understanding the potential for estate and/or gift tax liability should be part of this planning process.

Federal Estate Taxes

For 2026, the federal estate tax exemption increases to $15 million for an individual and $30 million for a couple.  This increase is not due to inflation but, instead, to the passage of the One Big Beautiful Bill Act, P.L. 119-21, July 4, 2025. This made permanent the existing estate tax exemption passed initially in 2017.

One last note on federal estate taxes: a surviving spouse has an unlimited marital deduction.  This means a predeceasing spouse can transfer assets to the surviving spouse estate tax-free.  Additionally, the surviving spouse can include the predeceasing spouse’s unused federal estate tax limit in their federal estate tax limit. This concept is known as portability.  It is important to consult qualified estate planning attorneys and accountants to ensure that the surviving spouse satisfies the requirements for portability.

Federal Gift Tax Limit

Federal tax law allows each taxpayer to gift up to $19,000 per year to one individual without incurring federal gift taxes. The federal gift tax limit will remain at $19,000 in 2026. This exemption is tied to inflation but can only increase by $1,000 per year.

How Does This Impact Producers?

Benjamin Franklin once wrote, “In this world, nothing can be said to be certain, except death and taxes.” With that in mind, farm families concerned about an estate exceeding the federal estate tax exemption need to begin working on farm succession and estate plans to limit potential estate taxes down the road. Working with a tax advisor early on can help limit taxes and devise a tax plan to keep the farm in operation for future generations. Failure to properly plan can force surviving family members to sell family assets to pay taxes. Along with a tax advisor, producers should consider working with additional team members, such as an attorney and a financial planner, to begin developing a succession plan for their operation.

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Goeringer, Paul. “Federal Estate Tax and Gift Tax Limits Announced For 2026.” Southern Ag Today 5(51.5). December 19, 2025. Permalink