Category: Policy

Authors Joe Outlaw and Bart L. Fischer

We have all heard the old proverb “it takes a village to raise a child.”  Indeed, an entire community is needed to interact with and guide a young person to grow into a well- rounded adult.  If the last 2 years are any proof, the same could be said about farm policy. Against the backdrop of exploding input costs and falling prices, the various components of the Federal government ultimately came together to begin addressing the bleak economic outlook. For example:

• While Congress was unable to get a farm bill done in 2024, they ultimately provided $30.78 billion in assistance for both economic and natural disaster losses from the 2023 and 2024 crop years.  Within 90 days of passage, the newly minted Secretary of Agriculture, Brook Rollins, had implemented the Emergency Commodity Assistance Program (ECAP) and quickly followed with the initial round of the Supplemental Disaster Relief Program (SDRP).

• As 2025 unfolded, when it became apparent that a bipartisan farm bill was unlikely, the Chairmen of the House and Senate Agricultural Committees along with the leadership in each chamber and the administration worked to include more than $60 billion in enhancements to the farm safety net in the One Big Beautiful Bill Act (OBBBA). OBBBA was passed through the reconciliation process and was signed into law on July 4^th of last year, with the enhanced provisions taking affect for the 2025 crop which was already well underway. While the marketing year average prices that determine the amount of assistance are still being determined, it is safe to say that all of the efforts that were put into getting the enhanced safety net provisions in the OBBBA will be felt and greatly appreciated by producers when payments are distributed after October 1^st for those crops that trigger assistance. And, at the moment, it looks like virtually all crops will trigger.  

• As we approached the end of 2025 with economic and trade-related losses still outstripping the assistance that will eventually arrive under the OBBBA, the Trump Administration stepped in and announced the creation of the Farmer Bridge Assistance (FBA) program that will inject an additional $12 billion of operating capital on farms by the end of February. 

• The agricultural leaders in the U.S. Congress are considering taking this even further, with some reports suggesting yet another $15 billion in assistance could go out the door to address other 2025 crop year losses, including those of special crop and sugar producers that were not included in FBA and have yet to be addressed by USDA.

Getting the regulations completed for all of these program changes—and for the new programs—takes the effort of everyone from the Farm Service Agency (FSA) and Risk Management Agency (RMA) at USDA to the Office of Management and Budget (OMB) in the White House to the congressional agricultural committee staff, just to name a few. Despite all of the disfunction and infighting in Washington, “the village” has still managed to come together to make positive changes to address the bleak outlook facing U.S. farmers.

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Outlaw, Joe, and Bart L. Fischer. “It Takes a Village.” Southern Ag Today 6(4.4). January 22, 2026. Permalink

Authors Natalie Graff and Henry Nelson

Program decisions for the 2026 crop year are fast approaching. This article considers the risk management options for cotton producers in light of current price projections and relevant changes in the One Big Beautiful Bill Act (OBBBA) signed into law on July 4, 2025.  Given the commodity program and crop insurance changes in OBBBA, producers likely will want to re-evaluate their Title I program and crop insurance decisions for 2026 and beyond. 

OBBBA strengthened the Title I programs Price Loss Coverage (PLC) and Agriculture Risk Coverage (ARC) by raising reference prices and increasing the coverage ARC provides, along with other changes. The Stacked Income Protection Plan (STAX) is an area-wide crop insurance policy exclusively for upland cotton producers, and cotton acres with a STAX policy are not eligible to sign up for ARC or PLC on the upland cotton base acres. In light of the recent improvements to ARC and PLC (and the prohibition on combining coverage with STAX), cotton producers should evaluate potential ARC/PLC payments before making their decision about STAX.

The Supplemental Coverage Option (SCO) is another area-wide supplemental crop insurance policy available for cotton and other major commodities.  OBBBA improved SCO in two significant ways.

1) The premium subsidy increased from 65% to 80%, now equal to the STAX premium subsidy. 

2) The restriction on ARC and SCO was removed. Prior to OBBBA, producers could combine SCO and PLC, but not SCO and ARC.  

Cotton producers, especially those that utilized STAX in the past, may wish to consider SCO for 2026 instead (note that producers cannot have both STAX and SCO for the same crop on the same acres).  SCO provides supplemental area-wide coverage – operating similarly to STAX – without causing producers to forgo potential ARC or PLC payments. 

As a result, one strategy to consider involves (1) enrolling cotton base in ARC or PLC, (2) purchasing an individual crop insurance policy like Revenue Protection (RP) on your cotton acres, and (3) supplementing the RP policy with an area-wide endorsement like SCO. Producers may also wish to add a supplemental Enhanced Coverage Option (ECO) endorsement as well. 

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Graff, Natalie, and Henry Nelson. “Producer Decisions for 2026 – STAX or SCO in light of OBBBA Changes.” Southern Ag Today 6(2.4). January 8, 2026. Permalink

Joe Outlaw and Bart L. Fischer

On Monday, December 8^th, President Trump and USDA Secretary Rollins announced the creation of the Farmer Bridge Assistance (FBA) Program, a new round of economic assistance totaling $12 billion for the 2025 crop, with $11 billion for row crop farmers. While details such as individual commodity payment rates have not been made available, it was announced that the structure of FBA would be similar to the Emergency Commodity Assistance Program (ECAP) that producers received earlier this year due to low commodity prices received for the 2024 crop. Recall the ECAP program provided assistance based on a producer’s planted acres of eligible commodities and 50% of acres that were prevented from being planted. According to USDA, acres that were prevented from being planted will not be eligible for FBA.

Individual payment rates are expected to be announced the week of December 22^nd. Payments are expected to be released by February 28, 2026. It was announced that payment limits would be different from ECAP. Payment limits will be $155,000 per person or legal entity, and the AGI limits will be $900,000. In ECAP, producers could double their limit if 75% of their AGI was from farming. The new assistance does not have this provision.

The last two years have been terrible financial years for most crop farmers across the United States. While producers will be grateful for the assistance, their estimated losses for the 2025 crop exceed $40 billion. The previous ECAP program paid 26% of losses to producers for the 2024 crop. Based on the estimates of loss for the 2025 crop, it appears the newly announced program will likely cover a similar portion of producer losses.

The announcement and subsequent details of the program when released will allow lenders to include the amount of the assistance in producer’s loan packages which should help those producers who are trying to secure operating loans for the 2026 crop year.

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Outlaw, Joe, and Bart L. Fischer. “Administration Providing Economic Assistance Payments to Struggling Farmers.” Southern Ag Today 5(50.4). December 11, 2025. Permalink

We think we can all agree on one thing: we’re all sick of talking about the state of the farm economy. After 8 years of ad hoc disaster assistance propping up the farm economy, most producers we know are desperate for market prices to return to levels that will at least cover their costs of production which have exploded over the last several years. They want to move on from ad hoc assistance, in part, because there are growing concerns that much of that assistance is simply finding its way into even higher land values (or higher cash rents) or higher input costs. Further, while the One Big Beautiful Billmade a significant down payment on improving the standing farm safety net beginning with the 2025 crop year, most of that assistance will not arrive until October 2026. Even then, once that assistance arrives, it will still fall far short of the losses currently facing producers. The trade discussion has injected even more uncertainty into the markets, although the recent agreement with China has provided somewhat of a reprieve (even if it’s not yet clear how and when China will fulfill the commitments they’ve made).

While all of these issues were reaching a fever pitch earlier this fall, the government shutdown over the past 2 months sucked most of the oxygen from the room. Congress recently reached an agreement to open the government, including passing a few of the appropriations bills, but that deal did not address impending losses for the 2025 crop year or uncertainty going into the 2026 crop year. 

We are growing increasingly concerned that too little attention is being paid to the challenges growers continue to face. Yes, there is some talk about trade aid, but that is just one element of the challenges facing growers. Last year, Congress provided $30.78 billion for economic ($10 billion) and natural disaster ($20.78 billion) losses. As noted in Figure 1, the losses facing producers (on prices and costs of production alone) in 2025 eclipse those from 2024—yet Washington has been eerily quiet on the topic, having committed $0 at this point for 2025 losses. 

In examining Figure 1, soybeans is the only crop to see an improvement in projected losses from 2024 to 2025, owing largely to the announced agreement with China and the projected $0.50 per bushel rebound in prices in USDA’s latest World Agricultural Supply and Demand Estimates. Even then, soybean producers are still projected to lose in excess of $100 per acre this year. In fact, all of the major commodities for which USDA reports costs of production are expected to face losses in excess of $100 per acre, with some crops like rice seeing losses double the amount of last year. And, Figure 1 is only covering losses for those crops for which USDA tracks cost of production. Other crops—for example, sugar—are also facing enormous losses. In virtually all cases, chronically low commodity prices—exacerbated by trade uncertainty—coupled with stubbornly high costs of production are the main culprits.

With news of thawing tensions on trade, the hope is that policymakers in Washington will be able to turn their attention to the huge issues facing row crop producers as they work to wrap up 2025 and prepare for the 2026 crop year. And, while growers may be growing wary of ad hoc assistance, we see little alternative in the short run. Ideally, efforts to craft a Farm Bill 2.0 will eventually make additional needed improvements to the farm safety net so we can close this nearly decade-long chapter on ad hoc assistance.

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Fischer, Bart L., and Joe Outlaw. “Disaster Assistance for 2025: Is it Coming or Not?” Southern Ag Today 5(47.4). November 20, 2025. Permalink

Over the past few months, we have been asked by producers on multiple occasions…since the ARC and PLC programs aren’t going to help very much why don’t we just forget it and use the money on crop insurance that does help?  This article contains the answer we typically give to that question. 

First, remember that the producer safety net is made of three parts: ARC and PLC, marketing assistance loans, and crop insurance.  Over the past few years, ARC and PLC have not kept up in trying to offset producer losses that have occurred because of low commodity prices and extremely high costs of production.  The marketing assistance loan program provides a harvest time loan to producers who need the cash flow but do not want to sell at harvest, which is typically the lowest prices of the year.  Not all producers utilize the marketing assistance loan program; however, in the South, cotton producers have routinely used this program.  At the same time, producers have reported that crop insurance programs (especially revenue insurance) have been a very useful safety net for their operations and that crop insurance was the most important part of the safety net.  We cannot disagree with this assertation. 

However, going forward, the One Big Beautiful Bill significantly increased reference prices used in both ARC and PLC while changes were made to the ARC program that will trigger payments sooner while covering bigger potential losses.  These changes will help increase the value of ARC and PLC to producers.  At the same time, in the current low-price environment, crop insurance will become relatively less helpful as insurance prices—which are based on a month of futures market daily closing values—are likely to be significantly lower than producers’ costs of production.  Losses will still be covered; however, producers will be indemnified at levels far below recent years because the futures market prices are low.   

The good news in all of this is when market prices eventually rise, insurance prices will rise with them.  With higher prices, the ARC and PLC program will be less likely to trigger assistance.  The marketing assistance loan program will still be useful to offer storage loans to allow producers to pay their bills while waiting for prices to increase.  In this situation, what we see is that each of the three parts of the producer safety net are important and are designed to complement one another, but there will be times when each are relatively more important.

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Outlaw, Joe, and Bart L. Fischer. “A Reminder That All Three Parts of the Producer Safety Net Matter.” Southern Ag Today 5(45.4). November 6, 2025. Permalink