– Josh Maples, Assistant Professor & Extension Economist, Department of Agricultural Economics, Mississippi State University
The One Big Beautiful Bill Act (OBBA) was signed into law on July 4th and included many provisions for agriculture. The nearly 900-page bill includes changes to programs affecting beef cattle producers, and I’ll highlight just a few of those updates in this newsletter.
Increased Payments from Livestock Forage Disaster Program (LFP)
The Livestock Forage Disaster Program (LFP) was modified to allow more financial relief during periods of severe drought. Some producers often refer to LFP as the “FSA drought program.” Previously, LFP provided one monthly payment for a D2 drought lasting eight consecutive weeks. Under the new updates, livestock producers are now eligible to receive two monthly LFP payments if their county experiences D2 drought conditions for 7 out of 8 consecutive weeks. Additionally, the program now triggers a single monthly payment after just 4 consecutive weeks of D2 drought during the grazing season. These changes are aimed at providing a faster drought response for producers relying on grazing. The chart above shows the length and severity of drought at the national level over the past 25 years. LFP is triggered at the county level.
Permanent Estate Tax Exemption
The OBBA makes permanent a federal estate tax exemption of $15 million per individual or $30 million per married couple. This offers relief to family-owned farms where the value of land, livestock, and other assets can often exceed cash in the bank. This helps to address the issue of heirs sometimes being forced to sell livestock or land just to cover estate tax bills when the farm is transferred to the next generation. This removes or lessens a major barrier to families wanting to keep farms intact across generations. Additionally, the OBBA makes the 20% small business tax deduction permanent.
Poultry Insurance Pilot Program
While this one is not cattle focused, I’m including it here because there are many cattle producers in the southeast who are also poultry growers. The bill directs the creation of a pilot insurance program for contract poultry growers which would allow producers to opt into index-based insurance covering extreme weather-related utility surcharges (gas, electricity, water, etc.). The program must be developed in consultation with poultry industry stakeholders and deployed across enough counties in top producing states to effectively test demand, feasibility, and design. A formal policy or insurance plan must be approved within two years and would establish the first federal insurance framework protecting poultry operations from rising utility costs.