An Update from Jim Wiesemeyer
In today's post I provide an update from my friend Jim Wiesemeyer
I have know Jim Wiesemeyer for many years and consider him to be a great friend and a valuable provider of ag related information on a daily basis. Jim was gracious to allow me to provide today’s post from his newsletter.
USDA locks in OBBBA disaster, loan and sugar program changes
Final rule immediately expands several farm safety-net triggers, raises MAL/LDP loan-rate support and gives livestock, forage, cotton and sugar producers clearer operating rules for 2026 and beyond
USDA’s Commodity Credit Corporation and Farm Service Agency published a final rule today (link) implementing One Big Beautiful Bill Act changes across Supplemental Disaster Assistance Programs, Marketing Assistance Loans, Loan Deficiency Payments and the Sugar Program. The rule, effective July 9, 2026, revises ELAP, LFP, LIP, TAP, MAL/LDP, cotton, sugar, ARC/PLC and Dairy Margin Coverage regulations. The rule is less a new aid program than the operating manual for how OBBBA’s farm-safety-net changes will be delivered at the county-office level.
Bottom line: the rule broadens eligibility, raises payment potential and reduces some producer-facing thresholds. USDA estimates the combined changes will increase federal outlays by about $927 million annually, with $382 million tied to supplemental disaster assistance and $545 million tied to MAL/LDP, cotton and sugar changes. The biggest single disaster-program cost driver is LFP, estimated at $343 million annually, reflecting the lower drought trigger for forage assistance.
Disaster aid becomes easier to trigger in several areas. For ELAP, USDA adds coverage for freshwater farm-raised fish losses due to bird depredation, a notable change for aquaculture operations that previously lacked coverage for those losses. The rule also fixes honeybee colony normal mortality at 15% for 2026 and later years, replacing FSA’s prior year-by-year calculation. That gives beekeepers a clearer baseline, though it also means losses below that threshold remain outside the program.
For livestock producers, the most important forage change is in LFP. USDA lowers the severe-drought trigger from eight consecutive weeks of D2 drought to four consecutive weeks for a one-month payment. It also adds eligibility for a two-month payment when D2 conditions persist for seven of eight consecutive weeks during the normal grazing period. That makes the program more responsive to shorter but still damaging drought periods, especially in regions where grazing losses occur before drought classifications have time to deepen or persist for two full months.
LIP changes are also significant. USDA adds compensation for unborn livestock death losses that occurred on or after Jan. 1, 2024, based on eligible adult female livestock that were gestating when they died from an eligible loss condition. For 2026 and later years, payment rates for unborn losses will be 85% of the lowest non-adult weight class for the same livestock kind, the maximum allowed under OBBBA. For many cow-calf producers, this could matter most after winter storms, wildfires, flooding, disease events or federally covered predator losses that kill bred females.
USDA is trying to limit retroactive paperwork for 2024 and 2025 losses. FSA records show roughly 4,400 approved LIP applications may require review for unborn death-loss payments. For categories where adult female losses are already identifiable, USDA will presume approved female deaths were gestating and automatically issue payments, with no additional action required by the producer. For categories where sex was not previously separated, some producers will be notified and allowed to revise applications, but USDA is not reopening original 2024 or 2025 LIP filing deadlines.
Predation-loss payments become more generous beginning in 2026. Losses from eligible attacks by federally reintroduced or federally protected animals, including wolves and avian predators, move from 75% to 100% of market value. USDA also gives producers a new alternative-market-value option for LIP, allowing approved producer-specific values up to 145% of the national average market value when supported by verifiable sales or marketing documentation. That matters most for higher-value breeding stock or specialized livestock where national averages can understate actual market value.
Tree Assistance Program changes lower the hurdle for orchard and nursery operations. Instead of requiring losses above a 15% threshold plus normal mortality, TAP eligibility now begins once losses exceed normal mortality. USDA’s example shows a citrus grower with 1,000 trees and 3% normal mortality becoming eligible after losing more than 30 trees, compared with more than 180 trees under the old calculation. The rule also raises reimbursement for pruning, removal and land-preparation costs from 50% to 65%, while retaining 75% reimbursement for beginning and veteran farmers and ranchers.
On the commodity side, USDA raises MAL and LDP loan rates for eligible commodities for the 2026 through 2031 crop years. The structure of the programs is largely unchanged: MALs remain nonrecourse loans backed by eligible commodities, while LDPs provide payments when repayment rates fall below loan rates. The policy significance is that higher loan rates raise the effective price floor and improve the value of marketing-loan gains or LDPs when prices are weak. This is especially relevant in a period of tight crop margins, higher interest costs and heavy working-capital needs.
Cotton gets several targeted changes. USDA shifts the upland cotton prevailing world market price calculation from the five lowest-priced growth quotes to the three lowest-priced quotes, creates a prevailing world market price and adjusted world price for ELS cotton, and adds a 30-day post-repayment review for upland cotton. If the adjusted world price falls within 30 days after loan repayment, FSA will issue a refund equal to the difference between the repayment-date AWP and the lowest AWP during that window; similar logic applies to additional LDP disbursements.
Sugar provisions are more about program mechanics and processor certainty than direct grower payments. USDA extends sugar program changes through 2031, increases raw cane and refined beet sugar loan rates, sets minimum storage rates for forfeited sugar, gives priority to beet processors with available sugar when upward allocation adjustments are made, and requires initial reassignment of sugar marketing allocations within 30 days after the January WASDE. The practical effect is to tighten the linkage between available supplies and marketing allotments while reinforcing the sugar loan program’s price-support function.
The broader policy read is that OBBBA is shifting more support into standing programs rather than relying solely on ad hoc disaster or market-loss payments. That will not eliminate pressure for emergency aid when commodity prices fall or weather losses mount, but it does make several programs more automatic, more generous and easier to trigger. For producers, the takeaway is to watch FSA implementation details closely: documentation, acreage reports, livestock breeding records, alternative-price evidence and loss notices will determine how much of the expanded safety net is actually accessible.