Progressive Farmer's Chris Clayton reported that USDA's recently announced Harvest Fuel Relief Program could "push U.S. government payments to farmers in 2026 to $55.4 billion, based on USDA's earlier net farm income forecast with $8 billion added to it. The highest previous aid year was $45.6 billion in 2020, driven by trade aid and pandemic payments."
The $55.4 billion number presumes that the new diesel aid payments go out to farmers by the end of the calendar year, as USDA has so far offered few details on the timeline for what farmers can expect with the program. The $55.4 billion in government payments to farmers would be only $10 billion less than combined government payments in 2022, 2023, 2024 and 2025. Additionally, $55.4 billion in government payments would make up just under one-third of USDA's total 2026 net farm income forecast.
The Wall Street Journal's Patrick Thomas reported in late June that government funding has played a bigger role supporting farm incomes over the past decade, with trade war-related payouts during Trump's first and second terms; rescue funding through the Covid-19 pandemic; and checks to help farmers deal with low crop prices. During this year's conflict in the Middle East, farmers have had to shell out more cash for fuel to run equipment and fertilizer for planting.
"Trade groups representing farmers have pushed for more aid, saying it is vital to keep American agriculture afloat," Thomas reported. "But some economists and industry analysts are raising concerns about the stepped-up government payments, saying it isn't clear how much is required to maintain U.S. agricultural production."
EDITOR’S TAKE:
It appears each succeeding week brings a new, higher total for government payments. We often share that farmers and food production are a national security interest which can justify such payments. It is also worth noting that farmers always point to their desire to earn their income from the market and not government. And let us not forget that farmers are price takers, not price makers. Most of the prices are influenced by actions far beyond their ability to control. However, the reality is that 2026 will likely be a record high for government payments. Net farm income will also be much higher than previous forecasts predicted. That means they will be searching for ways to invest in their operations and lower their tax burden. Section 179 of the IRS code now allows farmers/ranchers to take a 100% deduction for capital improvements in the first year. Things like trucks! This is a big deal for you to use in your sales discussions with them. Be sure to take advantage of the new CAD advisory that tells you exactly how to conduct the 179 conversations!
