DC Update
Apr 08, 2025
The conversations in DC are being dominated by four primary topics: budget cuts, deregulation, tax reform, and tariffs. Also included in the middle of the debate on these topics is the need for a new farm bill and certainty for farm policies and programs. With underlying factors including a current $1 trillion trade deficit along with a $36 trillion total federal debt and current government spending that adds $1.5-2 trillion a year to this number, Congress and the Trump administration are challenged to extend and write new tax reform and complete a new farm bill with an end-of-year deadline.
Outlined below are some of the key challenges impacting farmers in today's environment:
Despite White House reassurances that Trump “has farmers’ backs,” the future and outcome remain uncertain. USDA Secretary Brooke Rollins has expressed hope that renegotiations would benefit farmers but acknowledged that USDA is preparing for possible trade-aid payments if agricultural exports are negatively impacted. She stated that the administration is working to ensure farmers are represented in trade negotiations and is ready to provide financial support if needed. One key issue is the Commodity Credit Corporation’s (CCC) funding levels, which is the key source of funding to provide economic assistance to farmers hurt by a new trade war. The current level is around $15 billion, but at the end of the fiscal year (Sept. 30), the level will be around $5 billion post ARC and PLC payouts. The CCC has permanent borrowing authority from the U.S. Treasury, capped at $30 billion since 1987. Congress may need to provide additional assistance beyond CCC funds.
The efforts to complete a new farm bill is caught up in the budget and tax reform debate. Central to passage of a farm bill is the level of cuts to key programs as a part of the budget reconciliation process which is required for tax reform passage. There is a large divide between the Senate and House packages that will require significant negotiation and compromise. In order to achieve required agriculture cuts over the next ten years deep cuts to nutrition programs (SNAP) will be necessary which may create additional divides within and between the two political parties.
Advocacy Efforts: Your cooperative/company has continued to work hard to advocate on your behalf over the past 60-90 days. MKC team members have been in frequent contact and often leading discussions with members of Congress addressing the issues that impact the success of your farming and ranching operation. This includes numerous meetings with Congressional members and staff in DC as well as when they are in the state. Key areas addressed include the issues outlined above but with a focus on the need for a new farm bill, the potential impact of trade tariffs on an already distressed farm economy, and the passage of tax reform this year. One key provision in the tax reform is the extension of Section 199A, which expires this year-end. Without the extension of this key provision, MKC will no longer be able to pass through the Section 199A tax deduction. Rest assured that MKC will continue to advocate on your behalf.
Article provided by Dave Spears
Outlined below are some of the key challenges impacting farmers in today's environment:
- Suspended federal funding
- Low commodity prices leading to deteriorating farm economics
- New tariffs targeting major trading partners
- Freezing of billions in Biden-era agricultural and climate program funding
- Fears of a replay of the 2018-2019 trade war, which cost American farmers over $27 billion in export losses
Despite White House reassurances that Trump “has farmers’ backs,” the future and outcome remain uncertain. USDA Secretary Brooke Rollins has expressed hope that renegotiations would benefit farmers but acknowledged that USDA is preparing for possible trade-aid payments if agricultural exports are negatively impacted. She stated that the administration is working to ensure farmers are represented in trade negotiations and is ready to provide financial support if needed. One key issue is the Commodity Credit Corporation’s (CCC) funding levels, which is the key source of funding to provide economic assistance to farmers hurt by a new trade war. The current level is around $15 billion, but at the end of the fiscal year (Sept. 30), the level will be around $5 billion post ARC and PLC payouts. The CCC has permanent borrowing authority from the U.S. Treasury, capped at $30 billion since 1987. Congress may need to provide additional assistance beyond CCC funds.
The efforts to complete a new farm bill is caught up in the budget and tax reform debate. Central to passage of a farm bill is the level of cuts to key programs as a part of the budget reconciliation process which is required for tax reform passage. There is a large divide between the Senate and House packages that will require significant negotiation and compromise. In order to achieve required agriculture cuts over the next ten years deep cuts to nutrition programs (SNAP) will be necessary which may create additional divides within and between the two political parties.
Advocacy Efforts: Your cooperative/company has continued to work hard to advocate on your behalf over the past 60-90 days. MKC team members have been in frequent contact and often leading discussions with members of Congress addressing the issues that impact the success of your farming and ranching operation. This includes numerous meetings with Congressional members and staff in DC as well as when they are in the state. Key areas addressed include the issues outlined above but with a focus on the need for a new farm bill, the potential impact of trade tariffs on an already distressed farm economy, and the passage of tax reform this year. One key provision in the tax reform is the extension of Section 199A, which expires this year-end. Without the extension of this key provision, MKC will no longer be able to pass through the Section 199A tax deduction. Rest assured that MKC will continue to advocate on your behalf.
Article provided by Dave Spears