Highlights of USDA’s Farmer Bridge Assistance Program
Trump threatens new tariffs over Mexico’s water treaty shortfall
Link: Trump Unveils $12 Billion Farm Aid Package, with $1 Billion Held Back in Reserve
Link: A Cautious Lifeline: Trump Admin. to Roll Out $12 Billion Aid as Questions Mount Over Scope and Strategy
Link: Video: Wiesemeyer’s Perspectives, Dec. 5
Link: Audio: Wiesemeyer’s Perspectives, Dec. 5
Updates: Policy/News/Markets, Dec. 9, 2025
Note: A change in format for today’s dispatch as I must catch a very early plane from New Orleans to Wichita, Kan., via Houston. —Key highlights of USDA’s farm economic loss aid program: Name: FBA, Farmer Bridge Assistance program Funding source: Despite President Donald Trump saying it will come from tariffs funds, the aid is coming from USDA’s Commodity Credit Corporation (CCC). Aid amount: USDA Secretary Brooke Rollins said USDA will move $11 billion as direct “bridge payments” to producers, framed as a short-term bridge while new trade access and longer-term safety net changes take effect, with another $1 billion held in reserve to cover specialty crops and sectors still being evaluated. A USDA official described it as a simple, proportional, one-time payment designed to carry producers through continued market volatility until the One Big Beautiful Bill Act (OBBBA) begins delivering substantially higher statutory reference prices in late 2026. Reasons for the aid: Officials emphasized that the aid responds to economic losses caused by high input costs, persistent inflation, and market distortions from foreign competitors — not exclusively tariff-related disruptions — while maintaining tight guardrails on payment limits and eligibility. USDA Undersecretary Richard Fordyce framed the program as a temporary but essential measure to stabilize producers facing “unfair market disruptions, elevated input costs, and four years of policies that left the farm economy on shaky ground.” Payment timing (key dates for farmers):• Dec. 19, 2025, at 5 p.m. ET: Deadline for producers to make sure 2025 acreage reporting is accurate. These acres become the fixed basis for payment calculations.• Week of Dec. 22, 2025: USDA expects to release commodity-specific payment rates.•By Feb. 28, 2026: USDA says eligible FBA payments should be released.• Oct. 1, 2026: USDA pointed to farm bill-related improvements in the One Big Beautiful Bill Act (OBBBA) — including higher statutory reference prices for major commodities — reaching eligible farmers starting on this date. Eligibility: FBA applies across a broad array of row crops: Corn, soybeans, wheat, rice, cotton, peanuts, lentils, sunflowers, and others.Fordyce stressed: “No regional differences. Corn in North Dakota will be treated like corn in Louisiana.” Formula & data inputs. FBA payments will rely on:• USDA cost-of-production models,• WASDE price forecasts (final date to be selected),• 2025 planted acres,• A uniform formula modeling economic losses for the 2025 crop year.• Payments will cover a portion of modeled losses, scaled to the $11 billion cap. Payment limits & eligibility $155,000 payment limit per person or legal entity (OBBBA standard).• $900,000 AGI test for eligibility.• No enhanced limit for those deriving 75% of income from farming. Crop insurance linkage not required, but Fordyce encouraged producers to examine new OBBBA risk-management tools. Specialty crop allocation: The $1 billion reserved for non-row-crop commodities will be targeted at sectors not covered by FBA. —Questions and answers/comments: Topic 1 — How the formula works and what producers can expect Q1: How will a producer know their likely payment — e.g., a 1,000-acre soybean farmer with 500 acres of corn — given price fluctuations between now and February? Answer: (Fordyce & Allison Slagle, Senior Policy Advisor to the Secretary of Agriculture): First step: finalize acreage reporting by Dec. 19. USDA will choose a specific WASDE or price point, depending on timing. Cost of production is fixed, price inputs will be locked based on the chosen reference date. After Dec. 19, USDA will stress-test acreage totals and run the pre-existing economic formula. Commodity-specific payment rates will be released Dec. 22 and will not change thereafter. Slagle emphasized: “We have the formula already. The only unknown is total acres. Once acreage is locked down, we run the model and publish the final payment rates.” Topic 2 — Is the program limited to tariff impacts or broader losses? Q2: This appears broader than tariff compensation. Is that fair? Can USDA estimate how much loss stems from trade versus other factors? A: (Fordyce): “Yes — this is not a tariff-only compensation program. It is an economic loss program incorporating multiple pressures:• high inputs,• slim or negative margins,• market distortions. “USDA does not attempt to isolate or assign percentages of loss attributable to tariffs vs. inflation vs. foreign competition.” Topic 3 — One-time payment, caps, and regional equity Q3: Is this a one-time payment? Is there a cap? Any regional weighting? Is this a cash payment? A: (Fordyce): “Yes, it is a one-time cash payment, issued by Feb. 28, 2026.”Payment limit: $155,000 per person or legal entity.AGI eligibility test: must have AGI < $900,000.No regional adjustments: “Corn in North Dakota will be treated like corn in Louisiana.” Topic 4 — Differences from past USDA programs & loan-access changes Q4: What is different about this package compared with previous aid? What changes are being made to help farmers access loans more quickly? A: (Fordyce & Slagle): Differences from past aid programs: • No enhanced payment limitation for those earning 75% of income from farming. • Strict adherence to OBBBA limits: $155,000 cap, $900k AGI test. Loan-access and credit-flexibility changes:• The Farm Credit Administration issued new guidance allowing lenders flexibility to restructure distressed borrowers’ loans.• FSA lending demand is rising; agency is adjusting operations.• OBBBA includes provisions expanding the definition of new and beginning farmer, extending eligibility for certain crop insurance incentives. Topic 5 — Demand weakness, China, trade enforcement and WTO concerns Q5: Income support helps—but demand remains weak, especially in China. Without a functioning WTO, how can the U.S. enforce trade commitments? Can USDA secure enough new deals to rebuild demand? A: (Luke Lindberg — Undersecretary for Trade and Foreign Agricultural Affairs, USDA.): • U.S. demand issues are not solely about China: Dairy and other exports are increasing globally.• New Trump-era agreements will create access in markets where U.S. products have never competed before. On enforcement: “I would not want to be the official who signed a deal with President Trump and then didn’t implement it.” Lindberg said Trump has demonstrated an ability to create “historic leverage” without relying on WTO mechanisms. A: (Fordyce): Fully endorsed Lindberg’s answer. “Demand is rising globally — and deals are expanding access,” said Luke Lindberg — Undersecretary for Trade and Foreign Agricultural Affairs, USDA Lindberg’s remarks centered on export demand and new market access: 1. Export importance U.S. agriculture exports ~$170 billion annually; trade is “critical to producers’ bottom lines.” 2. Contrast with prior administration Claimed the Biden administration completed zero new trade deals and presided over a $50 billion agricultural trade deficit. Argued this broke with the long-standing norm of the U.S. being a net agricultural exporter. 3. New Trump administration trade activity 15 countries have signed agreements with the U.S. in the administration’s first 11 months. Tens of billions in new purchase commitments. Expanded access to markets “we had only dreamed about.” 4. Trade promotion expansion Lindberg highlighted the America First Trade Promotion Program, which: Doubles funding for trade promotion activities (MAP, FMD and related programs). Adds $285 million for building buyer-seller relationships abroad. 5. Accountability & enforcement He argued that foreign partners are unlikely to renege: “I would not want to be the government official who signed a deal with President Trump and then decided not to implement it.” —More aid likely coming from Congress. During a White House event Monday, Senate Ag Chairman John Boozman(R-Ark.) welcomed the administration’s announcement and hinted that Congress could follow up with further assistance in the future. “If we need some additional help,” Boozman said “looking to Congress, we’ll be there.” The payments, Boozman argued, would provide farmers with much-needed certainty. —Trump threatens new tariffs over Mexico’s water treaty shortfallPresident warns of additional 5% duties unless Mexico releases overdue Rio Grande water by year’s end President Donald Trump on Monday escalated pressure on Mexico over its longstanding water-delivery obligations, threatening to impose an additional 5% tariff on Mexican goods if the country fails to deliver water he says is owed under a 1944 treaty governing shared flows of the Rio Grande and Colorado Rivers. In a post on Truth Social, Trump said Mexico “continues to violate our comprehensive Water Treaty,” arguing that the shortfall is “seriously hurting our BEAUTIFUL TEXAS CROPS AND LIVESTOCK.” He asserted that Mexico owes the United States more than 800,000 acre-feet of water accumulated over the past five years and must release 200,000 acre-feet by Dec. 31, with the balance to follow shortly afterward. Texas lawmakers have been raising alarms for months, urging stronger enforcement as farmers face tightening irrigation supplies. Rep. Monica De La Cruz (R-Tex.) has pushed the administration to tie the water-delivery issue to the upcoming USMCA review, allowing the U.S. to leverage the trade pact’s dispute settlement system as a compliance tool. She and other Texas Republicans also introduced legislation enabling the president to deny non-treaty water requests from Mexico and curb specific economic engagements until treaty obligations are met. Trump said Mexico has so far failed to respond adequately and that U.S. producers should not bear the consequences. “As of now, Mexico is not responding, and it is very unfair to our U.S. Farmers who deserve this much needed water,” he wrote, adding that he has “authorized documentation” to impose a 5% tariff if Mexico does not act “IMMEDIATELY.” The warning comes on top of Trump’s existing tariff actions this year, including 25% emergency-powers duties on most Mexican goods not compliant with USMCA and national-security tariffs covering steel, aluminum, autos, and other imports. |
