Key Takeaways

• Farm bill credit programs help farmers and ranchers access financing when they cannot obtain sufficient credit through traditional commercial lenders.

• Access to credit is increasingly important as farmers face historically high production costs and multiple years of tight or negative margins.

• In fiscal year 2025, FSA obligated $6.74 billion across 27,792 farm loans, up 25% in dollars and 13% in the number of loans from fiscal year 2024.

• Beginning farmers accounted for 15,552 loans totaling $3.53 billion in fiscal year 2025, representing approximately 56% of all FSA farm loans and 52% of dollars obligated.

Farming requires significant capital. Producers pay for seed, fertilizer, feed, fuel and other inputs months and sometimes years before crops are harvested or livestock are sold. Buying farmland, machinery and other long-term assets often require even more financing.

Those needs are growing. USDA projects total production costs for major field crops to reach new highs in 2027. At the same time, commodity prices have not kept pace with expenses. This leaves farmers operating below break-even, or at a loss per acre. Higher costs and several years of weak margins can drain working capital and weaken farm balance sheets, making access to affordable credit increasingly important.

Most agricultural credit comes from private lenders, but not every producer can qualify for enough commercial financing. Beginning farmers may have limited equity or credit history, while established farms can face credit challenges after natural disasters, poor yields or several years of low returns. Title V, the credit titleof the farm bill, helps fill some of these gaps through farm loan programs administered by USDA's Farm Service Agency, or FSA.

How Farm Loan Programs Work

FSA provides credit in two main ways. Direct loans are made and serviced by FSA and generally serve farmers who cannot obtain sufficient commercial financing at reasonable rates and terms. Guaranteed loans are made by private lenders, with FSA guaranteeing up to 90% of most loans and up to 95% in certain cases. This reduces the lender’s risk and can help farmers qualify for financing.

Within those structures, FSA offers several types of financing.

• Farm Ownership Loans provide longer-term financing to purchase or enlarge farms, construct or improve buildings, make certain conservation improvements and cover other eligible real estate expenses.

• Operating Loans provides working capital for the ongoing costs of farming. Eligible uses can include seed, fertilizer, feed, livestock, fuel, equipment and other production expenses.

• Microloans provide smaller direct loans through a more streamlined application process. They provide another financing option for smaller farms, beginning producers and operations with more limited capital needs.

• Emergency Loans provide financing to eligible producers following qualifying natural disasters. They can be used to restore or replace essential property, cover certain production costs and help producers recover from disaster-related losses.

Together, these programs provide different pathways to credit depending on a producer's financing needs and ability to obtain private capital. 

FSA Lending Increased Sharply in 2025

In fiscal year 2025, FSA obligated $6.74 billion across 27,792 farm loans, compared with $5.39 billion across 24,555 loans in fiscal year 2024. Total dollars obligated increased 25%, while the number of loans increased 13%. The average amount obligated per loan also increased, rising from approximately $220,000 in fiscal year 2024 to nearly $243,000 in fiscal year 2025.

Farm ownership lending accounted for most of the dollars obligated. FSA provided $2.33 billion in direct Farm Ownership Loans and $2.09 billion in guaranteed Farm Ownership Loans. Combined, ownership financing totaled approximately $4.42 billion, or nearly two-thirds of all FSA farm loan dollars obligated during the year.

Operating loans, however, represented the largest share of lending by number. FSA made 14,170 Direct Operating Loans and 2,291 Guaranteed Operating Loans in fiscal year 2025. Combined, operating loans accounted for nearly 60% of all FSA farm loans.

Guaranteed lending experienced particularly strong growth. Guaranteed Operating Loan obligations increased 37% from fiscal year 2024, while Guaranteed Farm Ownership Loan obligations increased 41%. The number of guaranteed operating and ownership loans increased 21% and 24%, respectively.

Emergency lending remained a relatively small share of total FSA activity but increased sharply. Emergency Loan obligations rose from approximately $8.5 million in fiscal year 2024 to $26 million in fiscal year 2025, while the number of loans increased from 43 to 177.

Beginning Farmers Are Major Users of FSA Credit

FSA lending is especially important for beginning farmers, who often have less equity, fewer assets for collateral and shorter credit histories than established producers.

In fiscal year 2025, FSA obligated 15,552 loans totaling $3.53 billion to beginning farmers. They accounted for approximately 56% of all FSA loans and 52% of total dollars obligated. Beginning farmers were particularly active in direct lending, receiving about 55% of direct Operating Loans and 65% of direct Farm Ownership Loans. Farm ownership financing accounted for more than 70% of all FSA dollars obligated to beginning farmers, totaling approximately $2.51 billion.

The data highlights the role FSA credit programs play in helping new producers establish operations. Veteran farmers also received 787 loans totaling approximately $141 million in fiscal year 2025. (Note, that borrower classifications can overlap.)

Rising Costs Put More Pressure on Existing Loan Limits

The 2018 farm bill increased direct Farm Ownership Loans to $600,000 and direct Operating Loans to $400,000, while establishing a $1.75 million statutory base for guaranteed ownership and operating loans, adjusted annually for inflation.

Since then, land values and production costs have risen substantially. USDA projects record-high production costs for several major crops in 2027, meaning existing loan limits will cover a smaller share of producers' capital and working capital needs.

The Agricultural Act of 2026 would significantly increase FSA loan limits:

• Direct Farm Ownership: $600,000 to $850,000

• Guaranteed Farm Ownership: $1.75 million statutory base to $3.5 million

• Direct Operating: $400,000 to $750,000

• Guaranteed Operating: $1.75 million statutory base to $3 million

• Microloans: $50,000 to $100,000

Higher ownership limits would provide more financing capacity for farmland and long-term assets, while higher operating limits would better reflect the growing working capital needed to cover annual production expenses.

The Bottom Line

Farm credit is essential to keep farms operating and investing for the future. Producers need financing to cover annual production costs and purchase land, equipment and other long-term assets, particularly when cash flow is tight.

FSA farm loan programs provide an important source of credit when commercial financing is not sufficient. In fiscal year 2025, FSA obligated nearly $6.75 billion, 25% more than the previous year, and beginning farmers accounted for more than half of all loans.

But the cost of farming has changed substantially since current loan limits were set. Record production expenses, higher land values and several years of tight margins mean those limits do not stretch as far as they once did. Updating the credit title in the next farm bill would help ensure ownership, operating and microloan programs better reflect the capital needs of today’s farm economy. For farmers trying to stay in business, expand an operation or get started in agriculture, access to adequate and affordable credit can be the difference between an opportunity and a closed door.

Read Article on FB.org

USDA estimates that farmers will spend more money on interest payments in 2026, after adjusting for inflation, than at any other time on record. Stephanie Hoff learns more.

Read Article on FB.org

Launched as single trailer with two modules to bring agriculture to students in 20-30 schools annually, Idaho Farm Bureau’s Moving Agriculture to the Classroom (MAC) Trailer program has grown to include three trailers and four modules that engage more than 11,000 students in 75 schools each year.

Designed by a committee of Farm Bureau parents in their 30s to provide interactive modules with the “wow factor,” the lessons are state standard aligned, easy to transport and free for schools.

The program launched with one trailer and two modules: dairy, the state’s top commodity by value, and wheat, which is grown throughout the state.

Beefing up the Modules

Not long after launch, the program expanded with a water module showing how snowmelt and wet springs can cause flooding and how dams and reservoirs store water for use during dry seasons.

In 2023, a beef module was added, illustrating the life cycle of cattle from birth to harvest and highlighting the array of beef byproducts used in cosmetics, paint, medical supplies and sports equipment.

Counties have also developed additional modules related to farm safety, forestry and conventional and organic farming for their fairs and events.

Going Big(ger)

Each module is anchored by an eight-page “Big Book,” with each 4x4-foot page showcasing a different commodity. The students aren’t just reading about agriculture though, they experience it hands-on through activities that allow them to shake cream into butter and milk a life-size cow during the dairy lesson; grind wheat into flour and make pancakes in the wheat module; watch a valley flood and then be saved by a dam in the water module; and explore the many byproducts of beef that go far beyond food.

Far surpassing the 20-30 schools Idaho Farm Bureau hoped to bring their one trailer to annually, today the program reaches more than 75 schools and 11,000 students each year and includes two more trailers, and additional Big Books and hands-on learning tools.

The MAC trailer is also a popular attraction at 12 county fairs and the Idaho State Fair, where more than 25,000 children interact with the exhibits annually. Idaho Farm Bureau also sponsors the state fair’s largest agriculture attraction, giving 220,000 attendees the chance to connect with farm animals and agriculture displays.

Ag Education as a Member Engagement Opportunity

Idaho Farm Bureau’s MAC Trailer program serves the dual purpose of bringing Idaho agriculture to students in an interactive format and providing members who have aged out of the Young Farmers & Ranchers program a meaningful opportunity to remain involved with the organization by sharing agriculture in their children’s classrooms and local schools.

In addition, students who participated in MAC activities are returning as FFA members to help teach modules. And some are choosing careers in agriculture and leadership roles within Farm Bureau.

State Awards of Excellence

Idaho Farm Bureau’s Moving Agriculture to the Classroom Trailer program was recognized with a 2026 Award of Excellence in the Engagement and Outreach category. The award was presented at the 2026 American Farm Bureau Convention in January in Anaheim.

Read Article on FB.org

Key Takeaways:

1. The Senate Agriculture Committee's farm bill, the Agricultural Act of 2026, modernizes essential farm programs, authorizes year-round sales of E15 to strengthen markets for American agriculture, and includes measures to help reduce input cost volatility. As farmers and ranchers navigate one of the most challenging farm economies in a generation, this legislation provides much-needed certainty and support. The Senate Agriculture Committee should advance the bill in a bipartisan manner.

The farm bill is one of the most significant pieces of legislation affecting food and agriculture. While Congress reauthorizes the legislation every five years, the 2018 farm bill has been extended three times, and the current extension will expire on Sept. 30, 2026.

Through reconciliation in H.R. 1, the farm safety net and some conservation and research programs typically addressed in a farm bill received significant investment. Farmers and ranchers are thankful for the investments in risk management programs that will be felt on the farm this fall. However, hundreds of programs still must be updated in a full, 12-title farm bill. As farmers navigate one of the most challenging farm economies in a generation, they need the certainty that comes with a modern, comprehensive farm bill.

The Road to a New Farm Bill

In the 118th Congress, the House Agriculture Committee advanced the Farm, Food, and National Security Act of 2024 out of committee, but it was not taken up on the House floor. The Senate Agriculture Committee also released legislative text but did not hold a markup to consider it. In this current 119th Congress, Chairman G.T. Thompson released the Farm, Food, and National Security Act of 2026, which passed the House floor on a bipartisan vote of 224-200, marking the first time a farm bill passed the House floor since 2018.

Sen. John Boozman (R-Ark.), chairman of the Senate Agriculture Committee, released updated text on July 31 for his farm bill.

Aug. 6 Senate Ag Committee Farm Bill Markup

On Aug. 6, the Senate Ag Committee held a markup of the Agricultural Act of 2026, but the bill failed to advance. Various amendments were debated, voted on, and agreed to throughout the markup. A bipartisan en bloc package including 34 amendments was agreed to favorably via voice vote. These amendments included several Farm Bureau priorities of, including transferring the Food for Peace Program from the Department of State to USDA. Several standalone amendment votes were taken, including a favorable 17-6 vote for Leader Thune’s amendment to require USDA and USTR to determine a path forward to re-establish mandatory country of origin labeling requirements for beef in a manner compliant with the U.S.’s obligations under the World Trade Organization. Despite the bipartisan amendment process, the bill failed to advance out of committee during this markup due to partisan gridlock over the Supplemental Nutrition Assistance Program (SNAP) state cost share. Chairman Boozman recessed the committee allowing him to bring the members back to consider the legislation when the Senate is back in session in September.

The Time is Now for a 5-Year Farm Bill

Farm Bureau believes Chairman Boozman’s farm bill includes important support for farm families across the country, and the Senate Agriculture Committee should quickly advance this bill out of markup in a bipartisan manner. Farm Bureau is also calling on Congress to address priorities that are not currently included in the draft: protecting interstate commerce from a patchwork of state laws and providing economic assistance to farmers facing historic production costs and financial losses.

Agriculture is important to the nation's economy, energy security, environment, and national security, and must be treated as a strategic national resource in policy at every level. A comprehensive five-year bill is essential to providing certainty for farmers and ranchers, strengthening rural communities, and protecting the nation's food and agricultural security.

Below is an overview of key provisions within each title of the current Senate Agriculture Committee farm bill (note: this does not include amendments debated during the Aug. 6 markup). AFBF grassroots policy is also included below for reference.

Title I: Commodities

Strengthens assistance for producers:

• Upfront Tree Assistance Program payments for orchardists/nursery growers to plant alternative varieties, planting densities, and locations.

• A sales-based framework for timely assistance to specialty crop producers during market disruptions or economic crises.

• State block grants for uncovered livestock, poultry, crop, and tree disaster losses.

Supports a robust farm safety net:

• Continues marketing assistance and sugar loans during funding lapses.

• Reauthorization of key dairy programs through 2031, including the Dairy Forward Pricing Program, Dairy Indemnity Payment Program, and Dairy Promotion and Research Board.

• Codifies dairy processing cost reporting.

Improves producer flexibility and risk management for elevated input costs:

• Expands storage facility loans for propane, fertilizer, and related equipment.

• USDA evaluation of new safety net options for dry bean producers.

Title II: Conservation

Strengthens conservation programs:

• Reauthorizes the Conservation Reserve Program with reformed rental rates targeting marginal land.

• Drought-related updates across conservation programs.

Enhances land conservation efforts:

• Creates new programs supporting forest land and state/local conservation initiatives.

• Improves easement administration to protect working farms, grasslands, and wetlands.

Improves program delivery for farmers:

• Streamlines Technical Service Provider certification for broader access to conservation planning.

Title III: Trade

Helps expand markets for American farmers:

• Builds on H.R. 1 export promotion investments by directing the new funding to the Market Access program and the Foreign Market Development program.

Supports international food assistance efforts:

• Bolsters U.S. agricultural products through reauthorization and support of international food assistance efforts such as the McGovern-Dole Food for Education Program, Food for Progress, and the Bill Emerson Humanitarian Trust.

• Addresses trade barriers

• Prioritizes the protection of common food names in foreign markets and strengthens USDA’s support for specialty crop exports.

Title IV: Nutrition

Expands access to U.S. farm products:

• Reinforces buy American requirements, allows all forms of fruits and vegetables to be purchased by low-income families, enhances dairy incentives for SNAP purchases, and bolsters the commodity distribution program.

• Supports science-based dietary guideline review.

Strengthens local and regional food systems:

• Creates a USDA-state cooperative agreement program to boost local food purchasing.

Supports SNAP program integrity:

•  1-year delay in implementation of the SNAP state benefit cost-share passed in H.R. 1.

• Makes SNAP online purchasing permanent and supports enhanced cybersecurity efforts to prevent fraud.

• Supports staffing for SNAP administration.

Title V: Credit

Expands access to agricultural credit:

• Increases Farm Service Agency direct and guaranteed loan limits.

• Updates the guaranteed ownership loan inflation benchmark to reflect current land values.

• Improves financing for farmers, exporters, and commercial fishing operations.

Strengthens support for farmers:

• Makes it easier for beginning and distressed farmers to access financing.

• Expands the USDA Conservation Loan Program for precision agriculture equipment.

Modernizes rural lending:

• Accelerates USDA loan delivery.

• Allows Farm Credit institutions to partner with community lenders on rural and Tribal facility financing, including childcare, healthcare, and public safety.

Title VI: Rural Development

Expands rural broadband access:

• Codifies the ReConnect broadband program and prioritizes underserved areas to improve broadband speeds and expand connectivity for farms and ranches to support precision agriculture.

Strengthens rural communities and local economies:

• Increases support for rural healthcare, childcare, small meat and poultry processors, and rural entrepreneurs.

Invests in essential rural infrastructure:

• Improves drinking water and wastewater systems, emergency preparedness, and cybersecurity for rural water systems.

Title VII: Research

Strengthens agricultural research and innovation:

• Invests in specialty crop mechanization and automation research.

• Reauthorizes key USDA research programs like the Agriculture and Food Research Initiative (AFRI) and the Advanced Research and Development Authority (AgARDA).

• Advances research on emerging pests, diseases, aquaculture, and animal health.

Invests in the future agricultural workforce:

• Expands workforce training grants and supports community/junior colleges and 1890 land-grant institutions.

Increases services for farmers and rural communities:

• Expands resources for the Farm and Ranch Stress Assistance Network to improve access to mental health services.

Title VIII: Forestry

Improves forest management and wildfire resilience:

• Expands active forest management tools, streamlines environmental reviews, and updates forest restoration and watershed protection programs.

Modernizes forestry programs:

• Enhances forest inventory/data collection and wood innovation initiatives.

• Updates policies to better support sustainable forest management and the use of wood products.

Strengthens conservation and public land stewardship:

• Extends key restoration programs and strengthens state, local, and Tribal partnerships.

Title IX: Energy

Strengthens the bioeconomy and domestic manufacturing:

• Expands the BioPreferred program.

• Improves federal purchasing of biobased products and supports biorefineries.

Supports renewable energy in rural America:

• Improves the Rural Energy for America Program (REAP) with simplified applications and expanded technical assistance.

Accelerates biofuel and biobased innovation:

• Supports development and prioritization of sustainable aviation fuel as an important fuel and market for farmers.

Title X: Horticulture

Strengthens support for specialty crops and local markets:

• Reauthorizes market development and food safety programs.

• Maintains Local Agriculture Market Program (LAMP) funding while expanding food hub eligibility.

• Eliminates Specialty Crop Block Grant matching requirements and requires states to consult with producers when setting funding priorities.

Advances agricultural innovation:

• Expands support for urban and emerging agriculture through grants, technical assistance, and expanded access to USDA programs.

• Studies biostimulants as a tool to help support plant growth and inform a clearer federal regulatory framework.

• Establishes a USDA Office of Biotechnology Policy to coordinate biotechnology initiatives.

Improves science-based regulation and program integrity:

• Strengthens EPA-USDA pesticide regulation coordination and supports EPA’s robust risk-based registration review requirements.

• Modernizes organic oversight and inspections.

• Increases National Organic Program authorized funding and improves traceability for imported organic products.

Title XI: Crop Insurance

Strengthens risk management tools for specialty crop producers:

• Establishes a Specialty Crop Advisory Committee for greater Federal Crop Insurance Corporation (FCIC) board representation.

Expands and improves crop insurance:

• Enhances coverage for revenue losses beyond natural disasters.

• Increases premium support for veteran farmers and ranchers.

Modernizes agricultural risk management:

• Updates FCIC governance to better reflect the breadth of agriculture.

• Directs USDA to develop new risk management tools for livestock and crop commodities including lamb and oilseeds.

Title XII: Miscellaneous

Delivers year-round E15:

• Permanently authorizes nationwide year-round sales of E15 and includes small refinery exemption reform to provide long-term regulatory certainty.

Supports animal disease preparedness and response programs:

• Expands animal disease prevention and traceability funding, surveillance, biosecurity, and vaccine stockpiles.

• Advances livestock health programs like the National Poultry Improvement Plan and U.S. Swine Health Improvement Plan.

Supports livestock, poultry, and seafood producers:

• Supports small meat and poultry processors with scale-appropriate food safety guidance.

Improves agricultural security and market transparency:

• Modernizes foreign ownership reporting requirements for U.S. agricultural land by extending reporting to leases.

• Creates a crop input economist position at USDA with responsibility for reporting on prices, supply and demand, trade flows, and supply-chain risks across crop inputs.

• Creates a mandatory price reporting system for fertilizer.

Bottom Line

The Senate Agriculture Committee's farm bill is strong legislation that delivers much-needed certainty and support for America’s farmers and ranchers. We urge Senate Agriculture Committee members to advance the bill out of committee in a bipartisan manner and send it to the full Senate for consideration. Congress must still address remaining priorities not currently in this farm bill draft, including protecting interstate commerce from a patchwork of state laws and providing economic assistance to producers facing record-high production expenses and historic inflation. Together, these actions will strengthen the farm economy, support rural communities, and reinforce agriculture's role in the nation's food, energy, and national security.

AFBF Policy Supports:

1. Strong, timely, and accessible risk management tools for farmers and ranchers during times of market disruption or natural disaster to support financial stability for producers.
2. Conservation and environmental policies that balance agricultural productivity with natural resource stewardship through science-based, voluntary, and market-oriented approaches that respect private property rights and ensure timely program delivery and technical assistance for farmers and ranchers.
3. U.S. policies that strengthen global food security and economic development by leveraging American agriculture and American-grown products, expanding market opportunities, and ensuring international policies protect the interests of U.S. farmers and ranchers.
4. Science-based nutrition policies and food assistance programs that expand access to wholesome agricultural products, strengthen nutrition research and education, recognize the nutritional value of dairy and other farm products, and reduce food insecurity while creating new market opportunities for America's farmers and ranchers.
5. Modernizing USDA farm loan programs by streamlining the application process, ensuring loan limits keep pace with rising production costs, and prioritizing access to credit for young, beginning, and financially distressed farmers and ranchers.
6. Strengthening local economies by expanding processing and marketing opportunities, prioritizing broadband deployment in underserved communities, increasing access to essential services such as childcare, and updating infrastructure in rural communities.
7. Strong, sustained investments in agricultural research, Extension, and education through public-private partnerships and coordinated federal, state, and university efforts to advance innovation, strengthen U.S. agricultural competitiveness, and deliver science-based solutions that benefit farmers, ranchers, and consumers.
8. Sustainable forest management practices that recognize forestry as a valuable renewable resource and promote healthy, resilient forests through science-based management tools on both public and private forests.
9. Programs and policies that strengthen the nation’s energy security and rural economies and support expanded markets for American-grown products.
10. Expanding market opportunities for specialty crop producers, recognizing the growing role of urban agriculture, supporting a strong and credible USDA organic accreditation system, and promoting science-based collaboration between USDA and EPA on pesticide regulation.
11. Robust crop insurance programs and the expansion of insured commodities to include specialty crops.
12. Strengthening animal health preparedness strategies for potential outbreaks of animal disease, expanding local and regional processing capacity and market opportunities for producers, and enhancing the security and resilience of the nation's food and agricultural system across the whole government.

Read Article on FB.org

American Farm Bureau Federation President Zippy Duvall commented today on his meeting with President Trump and the executive orders signed today, which address several issues impacting America’s ranchers.

“I had the important opportunity today to speak with President Trump after the Oval Office event to let him know that the plan to increase beef imports is hurting farm families. I shared with him that we have witnessed significant price drops for cattle across the country. It has caused a setback to rebuilding the U.S. herd. We’ll continue to urge the administration to reverse the decision to increase imports before cattle prices fall further.

“America’s beef producers were the focus of today’s meeting at the White House. Among the topics covered under the executive orders is a call for an interagency review of mandatory country of origin labeling for beef. Farm Bureau policy supports voluntary Country of Origin Labeling (COOL) that conforms with COOL parameters and meets World Trade Organization requirements.

“We appreciate the president’s support for small processors by exploring new opportunities and expanded inspection access. Creating competition benefits both ranchers and consumers.

“The executive order also recognizes advances made in the recovery of Mexican and gray wolves in the United States. Farmers and ranchers share a commitment to healthy wildlife populations, and we support updated status reviews. The ESA is designed to help protect and recover species, and when populations recover, we should celebrate those successes and give oversight to the states for continued responsible management.”

Read Article on FB.org

• Foreign beef importers gain while ranchers lose immediately. Waiving the 26.4% tariff on 300,000 MT of beef delivers foreign sellers an estimated $650 million reduction in tariffs for foreign-sourced beef trimmings, just as ranchers sell calves at prices $300 to $400 per head below levels from two months earlier.

• The Federal Crop Insurance Corporation is now on the hook too. Due largely to nontraditional risks, i.e., federal intervention to influence prices, projected livestock crop insurance indemnities have jumped over 400%, from approximately $100 million in mid-May to more than $624 million by Sept. 1, with much of that cost increase expected to fall on the Federal Crop Insurance Corporation and Approved Insurance Providers.

• Consumer savings aren't guaranteed. There is a positive correlation between beef imports and retail beef prices – meaning additional imports are unlikely to lower consumer beef prices. Additionally, nothing in the proclamation compels retailers to lower prices, and supply-chain and ad-cycle lead times mean any benefit would take weeks to reach grocery store shelves, if it arrives at all.

In late August, President Trump issued a proclamation temporarily expanding the tariff-rate quota (TRQ) for lean beef trimmings by 300,000 metric tons – equivalent to more than 660 million pounds of beef. This move effectively suspends the 26.4% tariff on out-of-quota beef imports and opens the door to a substantial surge of imported beef over the coming months – at the same time hundreds of thousands of ranchers are marketing their calves into the fall selling window. Beef imports to the U.S. through the first half of 2026 are record high at more than 1.1 million metric tons, and up 12% over prior year levels.

The Unbalanced Rancher and Importer Tradeoff

The additional 300,000 metric tons are allocated across four specific tariff lines: fresh or chilled certified-organic lean beef trimmings, fresh or chilled lean beef trimmings classified as "other," and their frozen counterparts. According to USDA’s Foreign Agriculture Service (FAS), through the first half of 2026, beef imports under these tariff lines have totaled more than $3 billion on just over 370 thousand metric tons – with an average import value of nearly $8,200 per metric ton or $3.71 per pound.

Importantly, by raising the TRQ for the 300,000 metric tons, the out-of-quota tariff rate of 26.4% is effectively waived. With an estimated current market value of $2.5 billion for 300,000 metric tons of beef trimmings, the waived tariff amount equates to nearly $650 million in waived tariffs for foreign-sourced beef – at the expense of hard-working American ranchers who are now selling calves at prices that are $300 to $400 below prices just two months ago.

Crop Insurance Picks Up the Tab Too

While importers receive millions in tariff relief and ranchers see their bottom line erode, taxpayers are stepping up through the Federal Crop Insurance Corporation (FCIC). USDA’s FCIC provides crop insurance coverage on hundreds of millions of acres of crops, specialty crops, pasture, hogs and milk each year, but also on millions of feeder and fed cattle through the Livestock Risk Protection (LRP) program.

LRP, first made available in 2003, provides actuarially sound risk management coverage against the decline in market price for feeder and fed cattle and has grown in popularity among ranchers since 2018’s Bipartisan Budget Act increased its availability to ranchers. According to the most recent data from Bozic LLC, ranchers paid over $1 billion in premiums for LRP feeder and fed cattle coverage during reinsurance year 2026, which included sales through June 2026. In mid-May, when news of a beef import plan began to take shape, feeder and fed cattle prices were about 15% to 20% higher than today and projected indemnities totaled just over $120 million, with an average loss ratio of 13%.

Now that the presidential proclamation has been incorporated into market price expectations, projected LRP indemnities have increased sharply. As of Sept.1, projected LRP feeder and fed cattle indemnities for RY2026 had climbed to a combined $624 million – an increase of over 400% for each plan of insurance and a loss ratio approaching 60%. Much of that indemnity burden falls on the FCIC. For FCIC and ranchers, the losses are likely to continue to mount as cattle prices face downward price pressure.

Importantly, the losses are not driven by traditional market risk factors such as a decline in demand, or increases in supply, but instead the price declines are largely driven by federal intervention efforts to manipulate and artificially lower prices by incentivizing imports. For ranchers that purchased a LRP plan of insurance, indemnities will provide some risk management support, but it does not restore the confidence needed to rebuild America’s beef cow herd given the ongoing federal efforts to lower cattle and beef prices.

An Unknown Experiment

While the administration's rationale centers on lower consumer prices of ground beef – there is no economic evidence that the price for ground beef at the retail or food service levels will see any price relief due to additional imports. In fact, the economic evidence suggests the opposite. Data from USDA’s FAS on beef imports and data from the Bureau of Labor Statistics on retail ground beef prices shows a positive relationship between beef prices and imports over the last quarter century – as beef prices rise, imports follow.

Additionally, nothing in the proclamation compels grocery stores or food service providers to lower prices. There's no enforcement tool to ensure the $650 million in tariff relief will materialize as lower consumer prices. Every link in the supply chain, e.g., importers, processors, distributors, retailers or food service providers, will independently decide how much of the cost savings from eliminated tariffs to pass through to consumers versus absorbing it as (profit) margin.

From a supply chain perspective, before reaching consumers, imported beef must move through several steps along the supply chain including but not limited to export processing and booking at the foreign packing plant, transportation to the U.S. (unless it is in a bonded warehouse on U.S. shores), clearance through Customs and Border Protection, USDA food safety inspections, and distribution to processors for blending. Then, because groceries and restaurants lock in pricing and promotional cycles months in advance, menu boards, price tags and circulars are typically finalized well before the product physically arrives, adding one more lag before any cost change can potentially reach the consumer.

What is known is there has already been an impact on ranchers and their bottom lines – eroding their confidence in rebuilding America’s beef cow herd. What is also known is importers are likely to see reduced tariff levies of approximately $650 million, and insurance providers and USDA’s FCIC are on the hook for millions more in crop insurance indemnities. Finally, it’s also known that as beef prices rise, imports follow – indicating that these additional imports are highly unlikely to lower consumer beef prices.

Read Article on FB.org

American Farm Bureau Federation President Zippy Duvall commented today on the Environmental Protection Agency’s (EPA) and U.S. Army Corps of Engineers’ (Army Corps) proposed Waters of the U.S. (WOTUS) rule.

“Farmers share the goal of protecting the nation’s natural resources and we’re pleased the EPA and Army Corps put forward a new Waters of the U.S. rule. It respects farmers’ ability to responsibly use their land while ensuring regulations align with the framework established by the Supreme Court’s Sackett ruling.

“The new WOTUS rule provides a clear understanding of federal jurisdiction, which is critical for farmers who may face severe penalties or even jail time for unknowingly violating the law. While we’re still reviewing the details of the final rule, we’re hopeful that it will prove durable and bring an end to the regulatory back and forth farmers have endured during the past decade. America’s families deserve clean water and clear rules, as do the farmers who work to grow the food those families rely on.”

Read Article on FB.org

Key Takeaways

• USDA raised its 2026 net farm income forecast by $5 billion from February to $158.4 billion, and its estimate of 2025 income even more. As a result, net farm income is now expected to fall 2.6% in nominal terms and 5.5% after inflation in 2026.

• The expense outlook has deteriorated significantly. USDA raised its 2026 production expense forecast by $15.1 billion since February to $492.8 billion. Fuel and oil expenses are now projected to jump 28.8%, fertilizer expenses are up 15.3% and livestock purchases are up 11.4% from their earlier forecast.

• Direct government payments, including ad hoc and traditional farm bill program payments, are forecast to reach $47.4 billion in 2026, up nearly 70% from 2025. Those payments provide critical support, but their size also illustrates the continued gap between market returns and the cost of producing food, fiber and fuel.

USDA’s  September 2026 net farm income forecast, released Sept. 3, projects that net farm income, a broad measure of farm sector profitability, will decline to $158.4 billion in 2026. That is $4.3 billion, or 2.6%, below the newly revised 2025 estimate of approximately $162.7 billion. After adjusting for inflation, the decline becomes considerably larger at $9.1 billion, or 5.5%.

At first glance, the new forecast looks better than USDA’s February outlook, which placed 2026 net farm income at $153.4 billion. However, the comparison is more complicated. USDA also raised its estimate for 2025 by $8.1 billion, from $154.6 billion to $162.7 billion. Because the 2025 revision was larger than the $5 billion upward revision in the 2026 forecast, USDA now projects a steeper decline in farm income from 2025 to 2026. February's forecast anticipated only a 0.7% nominal decline in net farm income and a 2.6% inflation-adjusted decline; September now projects declines of 2.6% and 5.5%, respectively.

Overall, USDA’s September forecast puts farm income above its February estimate, but the revision does not signal broad financial relief. Federal support is projected to rise nearly 70%, from $28 billion in 2025 to $47 billion in 2026—$2.7 billion higher than February’s forecast. This is not all new assistance; USDA records payments when they are received, including support authorized for prior-year losses. Production expenses are now projected more than $15 billion higher, farm debt continues to rise and commodity conditions remain uneven, with stronger crop receipts offset by declines across much of the livestock sector. After inflation, net cash farm income (a slightly narrower measure of profits relative to net farm income) is still expected to fall 2.5% from 2025.

A Different Picture than February

USDA’s September update paints a stronger picture of 2025 than the February projection. For 2025, net farm income is now estimated at about $162.7 billion, up $8.1 billion from the February estimate, while net cash farm income was revised nearly $22 billion higher, from $153.9 billion to about $175.7 billion.

The largest change came from livestock markets. USDA now estimates 2025 animal and animal product receipts at roughly $303.6 billion, nearly $13 billion above its February estimate, while crop receipts changed little. Production expenses were revised slightly lower, from $473.1 billion to $471.6 billion, and direct government payments were revised down from $30.5 billion to $27.9 billion. Taken together, the revisions suggest that stronger realized market receipts, particularly from livestock, help explain much of the improvement in USDA’s estimate of 2025 farm income, rather than a broad easing in production costs or greater government support.

Crops

USDA’s September forecast shows a much stronger 2026 outlook for crop receipts than the February projection. Total crop cash receipts are now projected at $253 billion, up $14.6 billion, or 6.1%, from 2025 and more than $12 billion above USDA’s February forecast of $240.8 billion. After adjusting for inflation, crop receipts are still expected to increase 3.1%.

The largest revisions are concentrated in several major crops. Corn receipts are now expected to increase $6.8 billion, or 11.3%, to $67.3 billion, largely because of higher quantities sold; in February, USDA projected an increase of just $2 billion, or 3.3%. Soybean receipts are forecast to rise $4.3 billion, or 10%, to $47.9 billion, primarily on higher prices, compared with essentially no growth projected in February. Cotton receipts are now forecast to increase $651 million, or 12.5%, to $5.9 billion, after USDA previously expected receipts to remain near 2025 levels.

Other crops moved in the opposite direction. Rice receipts are projected to fall $571 million, or 19.6%, to $2.3 billion, a steeper decline than the 12.5% drop forecast in February. Hay receipts are now expected to increase only $104 million, or 1.3%, to $8 billion, compared with a $400 million, or 5.5%, increase projected earlier in the year, as persistent drought conditions have reduced forage and hay supplies across many livestock-producing regions.

Specialty crop receipts are also mixed. Vegetable and melon receipts are projected to increase $3.8 billion, or 15%, to $28.8 billion, a substantial upward revision from the 2.7% increase USDA projected in February. Fruit and nut receipts, however, are now expected to decline slightly, down about $140 million, or 0.4%, to $34.7 billion, reversing February’s forecast for a 1.2% increase.

Taken together, USDA’s September update points to stronger revenue expectations across much of the crop sector than earlier in the year, particularly for corn, soybeans, cotton and vegetables. But the gains remain uneven, and higher receipts come alongside sharply higher expectations for fertilizer, fuel and other production costs, limiting the extent to which stronger sales translate into improved farm margins.

Livestock

USDA’s September forecast also revised the livestock outlook higher than the February estimate, though receipts are still expected to retreat from a very strong 2025. Animal and animal product cash receipts are projected at $287.3 billion in 2026, about $13.4 billion above USDA’s February forecast, but down $16.4 billion, or 5.4%, from 2025. After adjusting for inflation, receipts are expected to decline 8.1%.

Cattle and calves remain the strongest part of the sector, with receipts forecast to rise $7 billion, or 5.2%, to $140.7 billion. However, higher receipts largely reflect historically tight cattle supplies rather than expanding production. Today’s strong cattle prices are a supply story years in the making, with the U.S. beef cow herd near historic lows following years of drought-driven liquidation and elevated production costs.

Importantly, the forecast may not fully capture the sharp decline in cattle prices that occurred following the administration’s recent proclamation to import 660 million pounds of beef. Cattle farmers and ranchers in many regions have seen cattle values fall, creating losses that could weigh on actual farm revenues beyond what is reflected in USDA’s current outlook.

Milk receipts are still expected to decline, but by a smaller amount than previously forecast, falling $2.1 billion, or 4.3%, to $46.8 billion, versus a 12.8% decline projected in February. Hog receipts are now expected to fall $1.2 billion, or 4%, compared with just a 0.7% decline in February.

Poultry markets are more mixed: egg receipts are expected to plunge $20.9 billion, or 66.3%, to $10.6 billion, broiler receipts fall $1.3 billion, or 2.8%, to $43.3 billion, while turkey receipts rise $2 billion, or 35.1%, to $7.5 billion.

Compared with February, USDA’s September outlook shows greater strength in cattle and a smaller expected decline in dairy receipts, but a weaker outlook for hogs and broilers. Overall livestock receipts are still projected to fall in 2026, with continued strength in cattle unable to fully offset sharp declines in egg receipts and softer returns across several other animal sectors.

Production Expenses

Production costs are one of the most significant changes in USDA’s September outlook. Total farm production expenses are now forecast at $492.8 billion in 2026, up $21.2 billion, or 4.5%, from 2025 and $15.1 billion above USDA’s February forecast. After adjusting for inflation, expenses are now expected to rise 1.5%; in February, USDA projected a 0.9% decline.

Several major categories are moving higher. Livestock and poultry purchases are projected to increase $7.4 billion, or 11.4%, to $71.9 billion, while fertilizer, lime and soil conditioner expenses rise $5.3 billion, or 15.3%, to $39.6 billion and fuel and oil costs increase $4.8 billion, or 28.8%, to $21.6 billion. Marketing, storage and transportation expenses are forecast to increase about $1.3 billion, or 12%, property taxes and fees by about $867 million, or 4.8%, and interest expenses by roughly $921 million, or 2.8%. Cash labor costs remain near $44.3 billion, down slightly from 2025, while feed expenses decline 2.1%.

The sharp increases now projected for fuel and fertilizer are particularly important given renewed conflict in the Middle East. Fighting involving Iran has again disrupted traffic through the Strait of Hormuz and pushed Brent crude above $96 per barrel, increasing the risk of further pressure on energy, transportation and fertilizer costs.

Taken together, USDA’s updated estimates suggest that meaningful expense relief remains limited. Even where individual costs ease, total production expenses remain elevated, leaving farm margins vulnerable to weaker commodity prices and renewed input-cost shocks.

Farm Finances

USDA’s September update shows some improvement in the farm balance sheet compared with February, but debt continues to climb. Total farm sector debt is forecast to reach a record $605.1 billion in 2026, up $26.4 billion, or 4.6%, from 2025. The sector’s debt-to-asset ratio is expected to inch up from 13.34% to 13.54%, meaning farmers will carry slightly more debt for every dollar of assets they own.

The revisions are somewhat less concerning than USDA’s February outlook, which projected debt at $624.7 billion and a 13.75% debt-to-asset ratio. Working capital (the cash and other short-term resources farms can use to pay bills) is now expected to increase 3.5% in 2026, after falling 15% in 2025. In February, USDA expected working capital to decline another 9.2%.

Conclusion

USDA’s September revisions show that 2025 farm income was stronger than previously estimated, largely because livestock receipts, particularly cattle, were better than USDA expected in February. That revision matters, but it does not erase the broader financial strain facing agriculture or necessarily mean conditions improved evenly across farms and commodities.

Looking ahead, USDA still expects real farm income to decline in 2026, production expenses to rise sharply, debt to increase and returns to remain uneven across sectors. Government payments via ad-hoc assistance and the farm safety net continue to provide an important bridge, but until market returns keep pace with production costs, many farmers and ranchers will continue to face tight margins and difficult financial decisions heading into 2027.

Read Article on FB.org

New farm income projections say the farm economy is still tough, as we hear in this report from Chad Smith.

Read Article on FB.org

Watch the first episode of Finding Hope Together: A Farm State of Mind® Insights Series

Today, the American Farm Bureau Federation’s Farm State of Mind initiative released the first episode in a five-part video series, Finding Hope Together: A Farm State of Mind® Insights Series. Every Wednesday in September, we’ll share new episodes that explore different aspects of mental health challenges among farmers and rural communities, and innovative ways people are coming together to find solutions.

In this first episode, three farmers with different farm businesses and experiences — Davis Peeler of South Carolina, Steve Breeding of Delaware, and Whitney Lawson of Oklahoma — sit down with series moderator Lydia Johnson for a brave and honest conversation about how generational dynamics, divorce, alcohol use, and circumstances that are unique to farming like time spent alone and overworking have impacted their lives, and how they’ve overcome those challenges.

Almost anyone involved in farming will relate to pieces of our guests’ stories, and their message is one of encouragement, optimism and support. In addition to opening up, they share suggestions for farmers who may be concerned about a neighbor, or who are wondering where they might find resources for themselves.

When asked why it’s important for more farmers to tell their stories, Davis Peeler said, “You never know how your story may impact someone. It’s not easy to share your story … but the only weak person is one who won’t seek help. Farming is hard on its own, much less with life’s struggles that come in on top of it.”

View the full episode, and subscribe to receive others in your inbox, at FarmStateOfMind.org.

This series will air in September, in observance of Suicide Prevention Month, but our hope is that the conversations spur action year-round. Future episodes will feature grassroots advocates, clinical experts, storytellers and industry stakeholders. The series is meant for anyone looking to support mental health well-being in rural America, whether that’s in your hometown, among your co-op or other network, or on a regional or national scale. 

If you or someone you know needs help, call or text 988 or visit 988lifeline.org.

Read Article on FB.org