It’s been just over two months since Congress passed the American Relief Act, which contains $9.8 billion in market relief payments. Congress gave USDA 90 days to issue the payments, and with less than 30 days left before the deadline, farmers are asking one question: when will those payments be released?
That’s exactly what AgriTalk’s Chip Flory asked U.S. Agriculture Secretary Brooke Rollins in an exclusive interview during Top Producer Summit last week. Rollins told Flory it’s her second top priority, right after addressing the avian flu outbreak.
“It’s got to move quickly. And now that I’m there, other than avian flu, that’s probably when I walk out of here, I’ll jump on the phone and we’ll start figuring out again why that isn’t moving more quickly and what we need to do,” Rollins told Flory. “But as you can imagine, I just got confirmed a couple of days ago. We have eight undersecretaries at USDA, and one that manages this portfolio. He hasn’t even had his hearing yet. So, we’re doing a little bit of band-aiding and duct-taping and bubble-gumming this thing together. But please know, and all of your listeners and those watching on TV should know, that this is of the highest priority. We have the best team in place, and we are going to move as quickly as humanly possible.”
Possible Payments to Producers
The economic aid for farmers was passed by Congress as part of the continuing resolution in December 2024, keeping the government funded through March 14, 2025. The “Economic Loss Assistance Program” earmarked $10 billion in direct payments for farmers.
USDA will make the final calculations, meaning the following, current calculations will likely change. But based off Farm CPA Paul Neiffer‘s early estimates, per-acre producer payments will be the following:
- Corn: $43.80
- Soybeans: $30.61
- Wheat: $31.80
- Cotton: $84.70
- Rice: $71.37
According to analysis by the Food and Agricultural Policy Research Institute (FAPRI), the top 10 states based on estimated total payments for corn, soybeans, wheat, cotton, sorghum, rice, barely, oats and peanuts are:
- Texas: $963 million, primarily because of its status as the largest cotton producer
- Iowa: $846 million, with strong support for corn and soybean farmers
- Illinois: $790 million
- Kansas: $787 million
- Nebraska: $625 million
- Minnesota: $616 million
- North Dakota: $597 million
- South Dakota: $497 million
- Indiana: $400 million
- Missouri: $391 million
Corn, soybeans and wheat are expected to make up 80% of the total estimated payments, or about $7.9 billion. That number increases to 98%, or about $9.7 billion, when including cotton, rice, sorghum, barley, oats and peanuts.
Earlier in February, USDA issued its first look at 2025 net farm income, showing a surge in net farm income for this year. That’s not because of a dramatic change in the markets. The surge is from an expected staggering 345% increase in government payments — from $9.3 billion in 2024 to $42.4 billion in 2025. That not only includes the nearly $10 billion from the American Relief Act, but the also $21 billion in disaster aid, which USDA still needs to disperse.
What’s at Stake for Farmers?
Ben Brown, an agricultural economist with the University of Missouri, says some producers are banking on those payments, even making business decisions based on the projected payment calculations released so far.
“It’s been interesting to go around and talk to producers about it. I think, broadly, there are questions about when it’s coming, making sure that it is coming. People have made decisions, business decisions, both at the farm gate level and then at the agribusiness sector, depending on these payments. So, if they had any challenges in implementing those or if they were strongly delayed, I think we would see some ripple effects.”
Brown also points out in conversations he’s having with farmers and ag lenders across the country, the reactions are mixed about the payments and the impact they could have on costs in 2025.
“The other challenge is that you look at the $40-plus per acre on corn and, the common phrase I’m hearing from producers is that there’s six different people out there asking for $10. And you’re sitting there saying, ‘well, that’s $60,’ and I’m really getting $43 or $42 an acre for my corn production. So, how does that compute? I think, as we sit here today, this might increase input prices or keep them a little higher than where we maybe would have anticipated them. That’s one of the challenges. But certainly, there’s a lot to learn as this gets implemented across the countryside.”
Anticipated Payments Fuel Improved Net Farm Income Picture
In an exclusive interview with USDA Chief Economist Seth Meyer, we asked Meyer to explain USDA’s updated net farm income forecast, which some argue paints the ag economy more positively than it actually is.
“We use the policy in place, and we look at what the administration has said and their desire to get these payments out,” says Meyer. “So, while we don’t know exactly what the payments will look like, if you dig into some of the geographic maps within what we produce, you will see we are having to make assumptions about where all those dollars will go. But we’ve made our best guess and we’ve asserted that they’re determined to get these dollars out the door. And so we put them into the farm income number.”
Meyer says as he talks to farmers across the country, he understands farmers don’t want to get their income from government payments; they prefer to get it from the markets. But he also points out the crops net farm income scenario and the picture for livestock are drastically different, but there are some exceptions.
“When you look at the net farm income numbers, and you take those government payments away, and you say, ‘What’s coming from the market?’ And then you take livestock and you separate out crops ... with crops today, we have increased competition around the world. We’ve got tighter margins, input prices that are sticky, challenges in exports because we sell bulk commodities and there’s where we’re facing competition. On the livestock side, you say, ‘Well, you know, the livestock side must be doing well.’ But at the same time, we’re short on dairy heifers to expand. We continue to be in a contraction phase of the cattle cycle. And yes, we’ve got record-high feeder and fed cattle prices, but we haven’t turned yet. Folks are not making the decision yet that this is something that they want to invest in in the long run.”
Meyer also points out the egg side of the equation is presenting another layer of challenges. He says if a producer hasn’t been hit by avian flu, they are making money. But for the producers who’s had their flocks infected by HPAI, that’s creating a financial strain.
“So, on the crops side, we are seeing narrow margins,” says Meyer. “The livestock side is better, but some constraints are continuing to expand there.”
Ag Economists Weigh In On Impact of Projected Payments
The January Monthly Monitor asked economists if those payments are needed in agriculture. Sixty-four percent said yes, and 36% said no.
In the survey, of the economists who said the payments are needed, some of the reasons why include:
- Land values continue to climb
- Input costs will remain elevated, and inefficient farmers that over-leveraged themselves the past couple years will remain in business
- Delays producers cutting fixed costs, especially cash rents
But not all economists agree the payments are needed, warning of some unintended consequences, including prolonging what some economists argue are adjustments needed in the industry. In the survey, economists said:
- “I think there could be some pushback when the longer-term farm bill comes up for authorization with budget hawks pointing to the $10 billion as a down payment of sorts.”
- “This will slow some adjustments that arguably are needed. For example, land rents are generally higher than can be justified by current market returns. Getting approval for another round of payments in 2025 is far from certain, so unless markets improve considerably, there could be a renewed financial squeeze in 2026.”
Ahead of Congress passing the Continuing Resolution (CR) in late December, AgWeb asked farmers in a poll whether Congress should pass economic aid for farmers before year-end, as well as if Congress should raise reference prices in a farm bill extension. The poll garnered more than 2,500 responses:
- 71% of respondents said Congress should approve emergency economic aid
- 29% responded no
- 81% of farmers said Congress should raise reference prices when extending the 2018 farm bill.
- 19% said no.
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