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OBBBA Levels the Playing Field for Different Farm Business Structures for USDA Payment Limitations

Authors: Yangxuan Liu, Associate Professor, University of Georgia; Michael R Langemeier, Professor, Purdue University

The One Big Beautiful Bill Act (OBBBA) changes how U.S. Department of Agriculture (USDA) payment limitations apply to different farm business structures. On June 2, 2026, USDA released the final rule (link) explaining how this provision will be administered beginning with the 2026 program year.

Prior to passage of OBBBA, business structure affected the number of payment limitations an operation could receive. General partnerships and joint ventures were permitted to multiply the applicable payment limitation by the number of eligible partners. In contrast, a Limited Liability Company (LLC) or S corporation was generally treated as a single legal entity—and limited to a single payment limitation—regardless of the number of members actively engaged in the farming operation. As a result, many producers organized as general partnerships to preserve eligibility for multiple USDA payments, despite the additional personal liability associated with that business structure. This disparate treatment of entities was highlighted in a previous Southern Ag Today article (link) by Ferrell, Lashmet, and Fischer (2024).

To address this imbalance, OBBBA established the Qualified Pass-Through (QPT) Entity classification (Table 1). Eligible QPT entities include Partnerships, Joint ventures, S corporations, and LLCs that are not taxed as C corporations. Beginning with the 2026 program year, QPT entitiesmay qualify for USDA payment limitations based on the number of eligible members, provided each member satisfies USDA eligibility requirements, including the actively engaged in farming provisions. Now, Qualified Pass-Through LLCs and S corporations are treated similarly to general partnerships and joint ventures for USDA payment limitation purposes.

Table 1. Payment Limitations for Qualified Pass-Through (QPT) Entities Before and After the One Big Beautiful Bill Act (OBBBA).

Business Structure	Before OBBBA	After OBBBA
General Partnership	Payment limitation multiplied by the number of eligible persons or entities that comprise the ownership of the QPT entity	No change
Joint Venture	Payment limitation multiplied by the number of eligible persons or entities that comprise the ownership of the QPT entity	No change
Partnership (within the meaning of subchapter K of chapter 1 of the Internal Revenue Code of 1986)	One payment limitation per entity	Payment limitation multiplied by the number of eligible persons or entities that comprise the ownership of the QPT entity
S Corporation	One payment limitation per entity	Payment limitation multiplied by the number of eligible persons or entities that comprise the ownership of the QPT entity
LLC that are not taxed as C Corporation	One payment limitation per entity	Payment limitation multiplied by the number of eligible persons or entities that comprise the ownership of the QPT entity

As noted in Table 1, for LLCs that elect to be taxed as C corporations, the payment limitation remains unchanged. These entities continue to be limited to one payment limitation per entity.

The new QPT entity provisions are effective for the 2026 program year. As a one-time exception, for the 2026 program year, USDA will determine an operation’s business structure based on its organization status as of September 15, 2026. Beginning with the 2027 program year, the business structure determination date will revert to the standard June 1.

Example

Consider a family farming operation owned by four siblings, all of whom meet USDA’s eligibility requirements. Table 2 summarizes the changes in payment limitations under different business structures for this family operation before and after OBBBA.

Under the 2026 payment limitation of $164,000 per eligible person for the Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) programs, a family farm operating as a QPT LLC or S corporation may increase its maximum USDA payment eligibility from $164,000 to $656,000, while retaining the liability protection offered by these business structures. Importantly, while the changes in OBBBA make each member of this farm eligible for their own separate payment limitation, it does not guarantee a payment. Payments are still a function of losses incurred.

Table 2. Payment Limitation Changes for a Family Farming Operation with Four Siblings Before and After the One Big Beautiful Bill Act (OBBBA)

	Before OBBBA	After OBBBA
General Partnership	Four payment limitations	Four payment limitations
Joint Venture	Four payment limitations	Four payment limitations
LLC* or S Corporation	One payment limitation	Four payment limitations

*LLCs that are not taxed as C corporations.

Why Does This Matter?

The new rules have the potential to substantially increase total USDA program payments for eligible farms organized as QPT LLCs or S corporations. USDA programs include ARC, PLC, and certain USDA disaster assistance programs.

Perhaps more importantly, producers no longer must choose between maximizing USDA program benefits and obtaining the liability protection offered by an LLC or S corporation. This new QPT entity treatment gives eligible operations greater flexibility to organize their business structures to meet liability protection, legal, tax, succession, and management objectives while maintaining eligibility for multiple payment limitations under USDA programs.

Disclaimer: This article is for educational and informational purposes only. Because every operation is unique, producers are encouraged to consult with their attorney, accountant, and crop insurance agent before making any changes.

Additional Information:

Ferrell, Shannon L., Tiffany Dowell Lashmet, and Bart L. Fischer. “Paved with Good Intentions: Unintended Impacts of Farm Bill Payment Limitations.” Southern Ag Today 4(19.4). May 9, 2024.

Federal Register. Payment Limitation and Payment Eligibility. Department of Agriculture, Commodity Credit Corporation, 7 CFR Part 1400, [Docket ID FSA-2026-0100], RIN 0560-AI86. June 2, 2026. https://www.federalregister.gov/documents/2026/06/02/2026-11002/payment-limitation-and-payment-eligibility (accessed July 23, 2026).

Kristine A. Tidgren. USDA Issues New Payment Limitation and Eligibility Rules. Center for Agricultural Law and Taxation. Iowa State University. June 4, 2026. https://www.calt.iastate.edu/post/usda-issues-new-payment-limitation-and-eligibility-rules (accessed July 23, 2026).

U.S. Department of Agriculture, Farm Service Agency. Payment Limitations. https://www.fsa.usda.gov/tools/informational/payment-eligibility/payment-limitations (accessed July 23, 2026).

Recommended citation format: Liu, Yangxuan, and Michael R Langemeier. “OBBBA Levels the Playing Field for Different Farm Business Structures for USDA Payment Limitations.” Southern Ag Today 6(34.4). August 20, 2026. Permalink

August 20, 2026

August WASDE Brings New Acreage and Yield Estimates

The latest World Agricultural Supply and Demand Estimates (WASDE) report was released on August 12. As discussed in last month’s article (Gardner, 2026), the August WASDE marks an important point in USDA’s crop forecasting process. Beginning in August, USDA replaces the trend-line yields used earlier in the growing season with its first survey-based yield forecasts. These estimates incorporate considerably more information than was available earlier in the summer, including producer surveys, field observations, and satellite imagery. As a result, August often brings some of the more notable yield revisions of the growing season. The same information is also used to refine planted and harvested acreage estimates, and this month’s acreage revisions added another element of surprise to the report.

Corn planted acreage was revised 1.4 million acres higher in the August WASDE, bringing the national estimate to 96.7 million acres. The additional acreage more than offset a reduction in the U.S. corn yield forecast to 180.7 bushels per acre. As a result, estimated corn production actually increased by 13 million bushels from the July estimate. However, lower beginning stocks and stronger projected exports more than offset the increase in production, pulling 2026 ending stocks down to 1.65 billion bushels. That would be 292 million bushels below the previous marketing year. With a somewhat tighter and more price-supportive supply-and-demand outlook, USDA raised the season-average farm price to $4.50 per bushel.

Soybean planted acreage was also revised upward by 1.4 million acres, bringing the national estimate to 86.8 million acres. The U.S. soybean yield forecast was lowered slightly to 52.7 bushels per acre, compared with 53.0 bushels per acre last month. As with corn, the increase in acreage more than offset the lower yield estimate, raising projected production to 4.52 billion bushels. USDA also increased projected crush by 30 million bushels, reflecting strong crush margins and demand for soybean products, but ending stocks still increased by 10 million bushels to 320 million bushels. The season-average farm price was unchanged at $11.40 per bushel.

Following the same general pattern as corn and soybeans, cotton planted acreage was revised higher while the yield forecast was lowered. Cotton planted acreage increased by 620,000 acres to 10.47 million acres, while the U.S. yield forecast was reduced to 798 pounds per acre, down from 872 pounds per acre last month. Unlike corn and soybeans, however, the lower yield more than offset the increase in acreage, reducing projected production by about 90,000 bales to 13.61 million bales. With no changes to the demand side of the balance sheet, projected ending stocks declined to 4.0 million bales, down from 4.2 million bales last year. USDA also raised the season-average farm price to 75 cents per pound.

While the August yield forecasts incorporate considerably more information than estimates made earlier in the growing season, history shows that they can still change substantially before the final estimate. The chart below shows the difference between the final U.S. yield and USDA’s August forecast from 2010 through 2025. Over that period, the final corn yield differed from the August forecast by an average of 3.8 bushels per acre in absolute terms, while soybean yields differed by an average of 1.5 bushels per acre. Cotton experienced much larger revisions, averaging nearly 48 pounds per acre. The revisions have also occurred in both directions. Since 2010, final corn yields have averaged 1.5 bushels per acre below the August forecast, while soybean and cotton yields have averaged slightly above their August forecasts. This variability provides useful perspective for the 2026 estimates: the August forecasts represent USDA’s best assessment of current crop conditions, but there is still room for meaningful changes in yields, production, and ending stocks as the growing season progresses.

Recommended citation format: Maples, William E. “August WASDE Brings New Acreage and Yield Estimates.” Southern Ag Today 6(34.3). August 19, 2026. Permalink

August 19, 2026
Cull Cow Prices Continue Slow Slide

Cull cow and cow-beef prices have slowly declined from their peak. Auction prices in the Southern Plains peaked at $187 per cwt and have since declined to about $172 in early August. National average cutter cow values have declined from about $156 to $142 per cwt over the same period. While prices have declined, they remain higher than last year. Cow beef markets have declined in price along with the live cow market. The boxed cow-beef cutout has declined from about $361 to $353 per cwt over the last two months. Wholesale 90 percent boneless lean beef has declined about $8 per cwt over the same time period to $456 per cwt.

Cow culling is poised to increase, seasonally, led by larger dairy cow slaughter. For the year, dairy cow slaughter is up 4.6 percent, or 66,300 head, compared to last year. Weekly culling tends to increase by about 10 percent from mid-year to Fall. The larger dairy herd should support the increase in culling and likely a larger than normal seasonal increase.

Beef cow slaughter remains historically small. After experiencing its seasonal mid-year increase, slaughter has begun to decline, with the week of July 25^th only 36,500, one of the smallest non-holiday slaughter weeks on record. Over the last 4 weeks, total cow slaughter has been 2,500 head below last year. For the year to date, weekly total cow slaughter is 4,500 head lower than last year. The year-over-year decline in beef cow slaughter is narrowing.

Cow slaughter should continue to increase seasonally as dairy cow slaughter remains close to last year’s levels. Beef cow slaughter should remain below last year but increase into Fall after calf weaning. Beef demand remains strong, which will keep prices at historically high levels. But it’s worth remembering that cull cow prices tend to decline through the end of the year. Overall tight supplies kept cow prices from declining last year, and tight supplies this year will moderate any potential decline.

Recommended citation format: Anderson, David. “Cull Cow Prices Continue Slow Slide.” Southern Ag Today 6(34.2). August 18, 2026. Permalink

August 18, 2026
Cultivating Successful Business Partnerships

Many farms are involved in business arrangements, whether through a partnership (or multi-member LLC), a joint venture, a contractual agreement, or a handshake deal. Farm transition plans often include a business partnership between the generations as an in-between step.

Sometimes, business partnerships just happen, such as a farm family deciding to file a partnership tax return to save on taxes or reduce certain payment limitations. In any case, farm partners are stuck with each other for a while, so how does one cultivate a successful business partnership?

Choosing the Right Soil

The Southern Ag Today article “Before Doing Business Together” outlined considerations to keep in mind before entering a joint business arrangement with someone else. If the business arrangement is intentional, ensure an attorney prepares a legal agreement that spells out everything, especially how decisions are made, how money is handled, and how to unwind the partnership.

Amending the Soil

If things are going well, it is easy to forget that other people are involved in managing your business. But relationships change over time: expectations change, people change, and not always for the better. Sometimes one can inherit a new business partner due to the retirement or death of a previous business partner.

Expectations for a business partner’s performance may have been clearly stated in the past, but a reset may be needed. Ideally, this would involve revisiting and amending the business agreement. At a minimum, a farm business meeting should be held on a routine schedule (at least annually) to discuss expectations and performance among the group.

Getting Rid of the Weeds

Unresolved conflicts, no matter how small, are like weeds choking a business. Unchecked negative feelings can seriously affect business and family relationships. The only way to eradicate these infestations is by resolving the conflict. The responsibility for resolving conflict weighs equally on both parties, the one responsible as well as the one who is upset. Many times, the “offender” doesn’t even know that they have done anything wrong.

Regular business meetings are a great way to stay on top of expectations and resolve conflicts. If neither party can discuss the problem, it may be necessary to use a neutral third-party facilitator to get things out on the table.

Protecting from Diseases and Pests

Protect against further conflict by improving communication and planning techniques between business partners. An old friend, Dr. George Conneman, often spoke about the 7 Cs for family business success: communication, commitment, common objectives, compromise, cooperation, contribution, and consultation.

Knowing When to Replant

All business partnerships end at some point. It is best to have a plan for how this will happen. A properly documented exit plan will ease partnership dissolutions, minimizing the potential for conflict, hard feelings, and courtroom battles.

Resources

If you need personal assistance, Cooperative Extension agricultural agents and specialists have experience, resources, and referrals to help farm families discuss the topics mentioned above. If you would like to learn more about joint business arrangements, download this free workbook.

August 17, 2026
Don’t Lose the Farm: Know Your Rights Under the UPHPA

For generations, your family has farmed the same land that has passed down from grandparents to grandchildren. Now imagine suddenly receiving a demand to vacate the land because it no longer belongs to your family. For heirs property owners, this is an ever-present threat. Heirs property is land inherited by descendants of someone who died without a will or with an improperly written or probated will. As tenants in common, any co-owner can petition the court to sell the property. Historically, partition actions led to a courthouse auction for a fraction of fair market value. [1] Unscrupulous investors could thus acquire land against families’ wishes, sometimes without their knowledge.

To combat this, the National Conference of Commissioners on Uniform State Laws approved the Uniform Partition of Heirs Property Act (UPHPA) for adoption by the States in 2010.[2] The UPHPA helps keep property in the family by providing due process protection to heirs. Although the UPHPA was approved over a decade ago, implementation has been slow. Landowners should be aware of their rights and responsibilities under the UPHPA and proactively seek assistance from an experienced heirs property attorney in the event of a partition action to effectively protect their family land.

The UPHPA entitles heirs property co-owners to rights not available to heirs property owners in non-UPHPA states, including: notice of a partition action by placement of a conspicuous sign on the property, notice of the fair market value of the property as determined by a disinterested appraiser, the right to obtain a copy of the appraisal, the right to dispute the valuation within thirty days, and the right of first refusal to buy out the petitioner’s interest before the property goes to sale.

Additionally, in UPHPA states, courts are subject to additional requirements when dealing with partitions of heirs property. If buyout fails, courts are required to evaluate whether dividing the property (partition in kind) or sale of the whole property (partition by sale) is the most equitable option. Courts evaluate the following factors: the practicability of physical division, the value of the divided parcels, duration of the family’s ownership, sentimental attachment to the property, ongoing lawful uses and potential harm of disruption, co-tenants’ financial contributions to the property, and other factors the court deems relevant. After evaluation, if the property goes to sale, it must take place on the open market, at a price no lower than the determined fair market value.

So far, in the Southern Ag Today area, Alabama, Arkansas, Florida, Georgia, South Carolina, Texas, Maryland, Virginia, and Mississippi have adopted versions of the UPHPA.[3] Efforts to introduce and pass the UPHPA in other states are ongoing. Please find more information at the Alabama Heirs Property Alliance.[4]

[1] Rabinowitz, Adam, Justin Anderson, and Jamie Mardis. “Land Ownership and the Preservation of Family Farm Legacies.” Southern Ag Today 4(35.5). August 30, 2024; Richardson, Jesse. “Heirs Property and Agriculture”. Southern Ag Today 2(36.5). September 2, 2022.

[2] Uniform Partition of Heirs Property Act, Uniform Law Commission, Final Act, 2010, Uniform Laws, https://www.uniformlaws.org/viewdocument/final-act-97.

[3] Uniform Law Commission (2026, June 25). Partition of Heirs Property Act. Retrieved July 27, 2026, from https://www.uniformlaws.org/committees/community-home/librarydocuments?communitykey=50724584-e808-4255-bc5d-8ea4e588371d&LibraryFolderKey=&DefaultView=.

[4] Alabama Heirs Property Alliance – Alabama Cooperative Extension System

Recommended citation format: Keown, Katie. “Don’t Lose the Farm: Know Your Rights Under the UPHPA.” Southern Ag Today 6(33.5). August 14, 2026. Permalink

August 14, 2026