Policy shifts, tax updates, and subsidy changes every producer should understand
The recently passed One Big Beautiful Bill brings sweeping policy changes across sectors, including significant updates for U.S. agriculture. With new funding for commodity support programs, permanent tax provisions, and expanded disaster relief, producers will need to take a fresh look at long-term planning and operational decisions.
This legislation is not solely focused on agriculture, but its scope includes several provisions that directly affect farm operations, landowners, and rural financial planning.
Let’s break down what farmers need to know now and as you plan for the coming years.
Financial Shifts Farmers Should Track
Higher Reference Prices for PLC & ARC
One of the most impactful updates for crop producers is the increase in benchmark price levels for Price Loss Coverage (PLC) and Agricultural Risk Coverage (ARC). These new thresholds increase the likelihood of payments when prices dip.
- The USDA estimates $54 billion in additional PLC/ARC payments over 10 years
- The bill also unlocks up to 30 million new base acres for eligibility based on planting history from 2019 to 2023
- Existing base acres cannot be moved or reallocated. Ig your acres are already enrolled, the structure of those allocations will remain as they are
Action Step: Review base acre records from 2019 to 2023 and consult with your advisor to determine eligibility for new enrollment.
Boosted Crop Insurance Support
The bill sets aside more than $6 billion over the next ten years to bolster crop insurance subsidies. That increase is expected to lead to lower premiums and improved coverage. This is especially valuable for farms managing diverse crops or operating in drought- and storm-prone regions.
With input costs still elevated in many regions, more favorable insurance terms can protect working capital.
Livestock Disaster Assistance Improvements
Livestock producers will benefit from expanded indemnity and emergency relief programs, especially in areas vulnerable to predator losses or extreme weather. The Livestock Indemnity Program (LIP) now offers:
- 100% coverage for predator losses (wolves, coyotes, etc.)
- 75% coverage for mass losses due to disease or weather events
- An additional $3 billion in disaster assistance ensures quicker payouts during emergencies
This is especially helpful for producers who, in the past, found the coverage insufficient during large-scale losses.
Action Step: Ensure documentation and reporting systems are updated to meet eligibility standards under the revised Livestock Indemnity Program.
Permanent Section 179 Expensing
Farmers can now plan capital investments with more certainty, thanks to the permanent extension of Section 179 Expensing. This provision allows farmers to deduct the full cost of eligible equipment and infrastructure purchases without relying on annual legislative extensions.
- Applies to both new and used assets
- Producers no longer need to wait for year-to-year legislative extensions
- Supports long-term equipment upgrade planning and tax strategy
With the uncertainty around annual extensions now gone, tax planning decisions can be made with more clarity. This change provides flexibility to invest in tractors, irrigation, grain bins, and more without waiting for Congress. These new provisions remove a lot of the guesswork around tax planning, but every operation is different, so personalized planning is still a must.
Action Step: Integrate Section 179 into your multi-year capital strategy, particularly for larger upgrades or expansion investments.
Estate Tax Relief & Succession Planning
Intergenerational planning becomes more manageable under new tax rules included in the legislation. The bill doubles the estate-tax exemption and also makes the Section 199A pass-through deduction permanent for partnerships and sole proprietorships.
For families focused on long-term transition planning, this is a key opportunity to:
- Minimize tax exposure on land transfers
- Ensure a smoother ownership transition
Taken together, these changes make this a good time to review your succession and estate plans to ensure your transition strategy is current and tax efficient.
Action Step: Revisit ownership and estate documents to align with the new exemption thresholds and business structure rules.
Trade & Ag Research Funding Boosts
Although not exclusive to agriculture, the legislation allocates meaningful funding increases in the trade promotion budget that could impact export opportunities and farm-level innovation.
Additional research funding supports:
- Animal disease prevention
- Climate-resilient crop development
- Improved farm technology
These programs can help advance farming practices and ultimately improve long-term profitability.
Action Step: Watch for announcements of new grant programs or research partnerships that support your crop, livestock, or geographic region.
What Has Not Changed
While the bill brings significant new investment, it also preserves the structure of many long-standing programs producers have come to rely on:
- ARC and PLC programs remain active with consistent rules and enrollment windows
- Dairy Margin Coverage (DMC) continues as-is, with no major changes
- Marketing Assistance Loans and Conservation programs maintain current structures
These elements ensure predictability for farmers who have built operations around these long-standing tools.
Potential Downsides & Political Tradeoffs
The legislation provides wide-ranging benefits, but the scale and structure of your operation may influence how much support you can access.
- Larger operations and commodity crop producers may see more value from base acre expansion and higher subsidy caps
- Smaller farms or specialty crop producers may need to work with advisors to identify lesser-known provisions or tax benefits
- Reductions to Supplemental Nutrition Assistance Program (SNAP) funding have drawn criticism, and future political negotiations could place pressure on agricultural programs
Bottom Line for Farmers
The One, Big, Beautiful Bill provides a wide range of benefits, including:
- A stronger safety net through increased subsidy triggers
- Enhanced crop insurance with better coverage at lower costs
- More reliable disaster relief for livestock producers
- Permanent, agricultural tax expensing rules
- Estate and succession planning improvements
- Boosted support for trade and agricultural innovation
At the same time, it’s important to be mindful of:
- Uneven distribution of benefits across farm sizes and sectors
- Potential political risks tied to nutrition program cuts
- The need for planning to realize the new opportunities fully
Next Steps for Farm Managers
Here are moves every farmer should consider:
- Adjust crop insurance strategies based on updated subsidy structures
- Evaluate capital purchases using permanent Section 179 rules
- Update succession and estate planning under new tax exemptions
- Confirm PLC and Arc eligibility for new base acres
- Stay informed about broader budget debates that may influence future rural funding
Looking Ahead: Planning Under the New Policy
The One Big Beautiful Bill may be broad in scope, but its implications for agricultural finance are particular. From program eligibility to permanent tax incentives, the decisions farmers make now will shape financial performance for years to come.
Successful farm managers will be looking not just at the headline subsidies. Farmers who take the time to plan, ask questions, and collaborate with their advisors will be in the best position to adapt, grow, and thrive under the new policy.
For support in evaluating how these updates impact your financing strategy or transition planning, Conterra’s lending team is available to help producers make informed, confident choices.
Conterra is dedicated to financing American agriculture, offering specialized agricultural loans tailored to meet the specific needs of farmers and ranchers nationwide. With a team of experienced relationship managers strategically located across the country, we provide regional expertise and personalized service to our clients. Our people, products, and process-driven approach to lending make us unique.
Disclaimer: Please note that the information provided in this article is for educational and informational purposes only, and should not be construed as financial or investment advice. While we have made every effort to ensure the accuracy and reliability of the information presented, Conterra Ag Capital and its affiliates make no representation or warranty as to the completeness, correctness, timeliness, suitability, or validity of any information contained in this article. You should always consult a qualified financial advisor, tax professional, or other qualified professional for advice on your specific financial situation.
