Senate Farm Bill 2.0 Unveiled: Boozman Draft Signals New Direction for Farm Policy
Commodity safety net, trade expansion and rural investment take center stage as Senate Ag Committee begins farm bill debate
Senate Ag Committee Chairman John Boozman (R-Ark.) on Tuesday (June 23) released the long-awaited draft of the Agricultural Act of 2026, branded as “Farm Bill 2.0,” marking the Senate’s opening bid in what is expected to be an intense summer debate over the future of U.S. farm, food and rural policy. The proposal builds on provisions enacted earlier through the Working Families Tax Cuts (OB3) package and attempts to address many of the concerns farm groups have raised regarding inadequate safety-net protections, disaster assistance and rural investment.
Unlike the House package, the Senate draft largely avoids some of the most politically divisive issues, including Proposition 12, pesticide labeling preemption and year-round E15 fuel sales (note: E15 is not within the jurisdiction of the committee). Instead, the measure focuses on strengthening existing farm programs, expanding trade promotion, modernizing conservation programs and boosting rural development initiatives. The strategy appears designed to attract bipartisan support while avoiding provisions that could fracture the coalition needed to move a farm bill through the Senate.
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Commodity Programs and Disaster Assistance
The most significant changes for production agriculture are concentrated in Title I. The legislation strengthens USDA’s standing disaster programs while creating new tools for specialty crop producers that historically have lacked the safety-net protections available to row crop farmers. The bill expands the Livestock Indemnity Program to include unweaned livestock losses, establishes more precise weight categories for calves and broadens Emergency Assistance for Livestock, Honeybees and Farm-Raised Fish Program eligibility to cover feed and water transportation costs during drought and adverse weather conditions.
The proposal also authorizes USDA to distribute future disaster assistance through block grants to states, a notable policy shift that could accelerate aid delivery after major weather events. Specialty crop producers would gain a formal assistance framework to guide future market-loss and disaster-relief programs.
From a political standpoint, these provisions respond directly to producer complaints following repeated ad hoc disaster programs over the past decade. Specialty crop organizations have argued that disaster aid has often been slow, inconsistent and poorly tailored to their sectors. The Senate draft attempts to institutionalize a more predictable response mechanism.
Crop Inputs and Fertilizer Markets Gain New Attention
One of the more intriguing additions in the Senate farm bill draft is a recognition that crop input costs have become as important to farm profitability as commodity prices themselves. Following the fertilizer price spikes, supply chain disruptions and geopolitical shocks that emerged after the pandemic and the Russia-Ukraine war, lawmakers are proposing a more formal federal role in monitoring agricultural input markets.
The legislation would direct USDA to employ a full-time Crop Input Economist within the Office of the Chief Economist. The position would be responsible for coordinating crop input data collection and research across federal agencies while disseminating market information to producers and the public. In addition, the bill requires USDA to publish a comprehensive report on the U.S. fertilizer industry.
For many farm organizations, this provision addresses a longstanding complaint that USDA produces extensive analysis on crop and livestock markets but provides far less transparency regarding fertilizer, seed, chemical and other production input markets. Farmers often make planting and marketing decisions based not only on expected crop prices but also on expected costs for nitrogen, phosphate, potash, crop protection products and fuel.
The timing is significant. Fertilizer prices have become increasingly volatile over the past five years as global markets have been influenced by trade disputes, sanctions, weather disruptions, natural gas prices and supply chain bottlenecks. Fertilizer represents one of the largest single production expenses for corn growers and is also a major cost factor for wheat, cotton and other row crops. During recent periods of market stress, producers frequently complained about a lack of timely and transparent information regarding fertilizer supply, pricing trends and industry concentration.
The required USDA fertilizer industry report could provide policymakers with a clearer picture of domestic production capacity, import dependence, market concentration and potential vulnerabilities in fertilizer supply chains. Such information may become increasingly important as lawmakers debate issues ranging from fertilizer tariffs and trade policy to domestic manufacturing incentives and energy regulations.
From a broader policy perspective, the creation of a Crop Input Economist reflects a growing recognition that farm profitability depends on both sides of the ledger. Historically, farm bills have focused heavily on crop prices, disaster assistance and conservation programs. This provision suggests Congress is beginning to place greater emphasis on input affordability and supply chain resilience as components of the agricultural safety net.
The proposal also aligns with growing concerns about foreign dependence for critical agricultural inputs. Fertilizer supplies, particularly potash and certain phosphate products, remain heavily tied to international markets. By improving data collection and analysis, USDA could provide producers and policymakers with earlier warnings of emerging supply disruptions or pricing pressures.
While these provisions may not generate the same attention as commodity programs or SNAP policy, they could ultimately prove valuable for producers seeking better market intelligence. In an era when fertilizer, chemical and energy costs can determine whether a farm is profitable or not, the Senate appears to be signaling that input economics deserve a more prominent place in federal agricultural policy.
Dairy Sector Receives Major Attention
The dairy industry emerges as one of the biggest beneficiaries of the draft. The bill permanently authorizes the Dairy Forward Pricing Program, reauthorizes the Dairy Indemnity Payment Program and requires mandatory reporting of processing costs and yields to better inform future Federal Milk Marketing Order decisions.
These provisions reflect lessons learned during the contentious Federal Milk Marketing Order modernization debate. Mandatory cost and yield surveys could provide USDA with more reliable data when adjusting make allowances, a long-standing concern among dairy producers.
More details on DIPP and Dairy Forward Pricing Program The Dairy Indemnity Payment Program (DIPP) is one of the lesser-known but important dairy safety-net programs because it compensates producers when they are forced to remove milk from commercial markets due to contamination from pesticides, toxic substances, radiation or other hazardous materials beyond the producer’s control. Unlike Dairy Margin Coverage, which protects against poor milk-feed margins, DIPP addresses physical contamination losses and public health-related disruptions. Under the Senate Farm Bill 2.0 draft, the program is reauthorized through 2031, providing dairy producers with another five years of certainty that the federal government will continue to backstop catastrophic contamination events. The legislation also reauthorizes the Dairy Promotion and Research Board and makes the Dairy Forward Pricing Program permanent. Historically, DIPP has been used infrequently because major contamination events are relatively rare. However, when they occur, losses can be severe. Dairy producers may be required by state or federal authorities to dump milk, destroy feed supplies or suspend marketing until contamination concerns are resolved. Without indemnification, those losses can quickly become financially devastating. The program gained prominence following nuclear incidents, chemical spills and environmental contamination events that affected milk supplies. It serves as a public-health protection tool because it encourages rapid removal of potentially contaminated milk from the food chain while ensuring producers are not forced to absorb the entire financial loss. From a policy perspective, reauthorizing DIPP reflects growing concerns about supply-chain vulnerabilities, environmental incidents and emerging contamination risks. While the dairy industry’s primary economic safety net remains the Dairy Margin Coverage program, DIPP serves a fundamentally different role by protecting against food-safety emergencies rather than market conditions. USDA continues to view the program as an important component of overall dairy risk management. For dairy producers, the practical significance of the Senate provision is not necessarily the amount of annual spending involved, but the assurance that a federal indemnity mechanism remains available if an extraordinary contamination event occurs. In that sense, DIPP functions much like crop insurance for a highly specific but potentially catastrophic risk. The broader dairy title in the Senate bill suggests lawmakers are trying to provide a more comprehensive risk-management framework that includes margin protection, milk pricing transparency, disaster assistance and contamination indemnification. The reauthorization of DIPP fits squarely within that strategy. Dairy Forward Pricing Program Made Permanent in Senate Farm Bill Draft The Senate Ag Committee’s Farm Bill 2.0 would permanently authorize the Dairy Forward Pricing Program (DFPP), ending the need for periodic congressional reauthorizations and providing dairy producers and processors with greater long-term certainty. The program allows dairy farmers and milk processors to voluntarily enter into forward contracts that lock in milk prices before the milk is delivered. In essence, it provides a risk-management tool that enables producers to secure a known price for future milk production rather than being fully exposed to volatile dairy markets. How the Program Works Under the DFPP, cooperatives and processors can offer contracts to producers that establish a future price for milk based on market conditions at the time the contract is signed. The producer agrees to deliver a specified quantity of milk at that price during a future period. This allows producers to:• Lock in profitable margins when market conditions are favorable.• Reduce exposure to sudden declines in milk prices.• Improve cash-flow planning and lender confidence.• Better manage feed, labor and capital investments. For processors, forward contracts provide greater certainty regarding milk supplies and procurement costs. Why It Matters Milk prices have become increasingly volatile over the past two decades due to shifts in global dairy demand, export competition, feed costs, weather events and changing consumer preferences. Price swings of several dollars per hundredweight can dramatically alter farm profitability. Many dairy producers already use futures and options markets through the Chicago Mercantile Exchange, but those tools can be complex, require margin calls and may not be practical for smaller operations. The Dairy Forward Pricing Program offers a simpler alternative by allowing producers to negotiate directly with processors or cooperatives. As a result, the program has been particularly valuable for small and medium-sized dairy operations that may not actively participate in futures markets. Relationship to Federal Milk Marketing Orders One reason the program has required specific congressional authorization is that it creates an exception to certain Federal Milk Marketing Order pricing requirements. Normally, milk prices are determined through federal order formulas based on product values. The forward pricing program permits producers and processors to voluntarily agree to different pricing arrangements while still operating within the broader federal order framework. The Senate draft’s decision to make the program permanent signals congressional recognition that forward contracting has become a mainstream risk-management tool within the dairy sector rather than a temporary experiment. Industry Support The program has generally enjoyed broad support from dairy cooperatives, processors and producer organizations because it expands marketing flexibility without requiring new government payments or subsidies. The move comes at a time when dairy producers face continued uncertainty surrounding export demand, feed costs, labor availability and evolving Federal Milk Marketing Order reforms. The Senate bill’s dairy title combines permanent authorization of DFPP with new mandatory cost and yield reporting requirements intended to improve future milk pricing decisions. Together, these provisions suggest lawmakers are placing greater emphasis on market transparency and risk management rather than direct government intervention. Perspective:While the permanent authorization may not attract the attention of larger commodity program changes, it could prove to be one of the most consequential dairy provisions in the legislation. By removing sunset concerns, lenders, cooperatives and producers can incorporate forward pricing into long-term business planning with greater confidence. For an industry that has endured repeated cycles of boom-and-bust pricing, the Senate’s decision to make the Dairy Forward Pricing Program permanent represents a clear endorsement of market-based risk management and could encourage wider adoption of forward contracting across the U.S. dairy sector. |
Conservation Programs Shift Toward Drought Resilience
The conservation title places heavy emphasis on drought mitigation and working-land conservation. The bill reauthorizes the Conservation Reserve Program through 2031 while maintaining a 27-million-acre cap and reforming rental rates to better target environmentally sensitive land rather than highly productive cropland. Emergency haying and grazing access during drought conditions also is expanded.
The proposal creates two entirely new initiatives: the Forest Conservation Easement Program and the State Conservation Assistance Program. Together, they represent one of the most significant structural conservation changes in years.
The Senate draft also streamlines conservation practice approvals, expands precision agriculture eligibility and seeks faster implementation of conservation projects through broader use of certified third-party providers.
The emphasis on drought resilience is noteworthy. Virtually every major conservation program is modified to better address water shortages, reflecting the growing policy consensus that prolonged drought represents one of agriculture’s most significant long-term risks.
Trade Promotion Receives Historic Funding Increase
One of the largest funding increases occurs within Title III. Funding for the Market Access Program and Foreign Market Development Program would more than double. MAP funding would increase from $200 million annually to $421 million beginning in FY2027, while FMD funding would rise from $34.5 million to $73.5 million. Note: It is not new funding, rather the committee utilizes funding made available in OBBBA.
The legislation also establishes new efforts to defend common food names in export markets, improve cold-chain infrastructure overseas and strengthen coordination among USDA, USTR and Commerce on agricultural competitiveness.
The trade title reflects growing concern that U.S. agriculture must aggressively develop alternative export markets amid continuing uncertainty surrounding China, tariff disputes and intensifying competition from Brazil and other exporters. For commodity groups, the MAP and FMD increases likely represent one of the most consequential provisions in the bill.
Nutrition Title Avoids Major SNAP Fight
The Senate bill does not include a delay of the state cost share, which was implemented as part of OBBBA. The Democrats have asked for a 2-year delay in the implementation of the state cost share. The language of the bill largely mirrors the House’s.
The bill focuses on program integrity, Buy American requirements and nutrition incentives. The proposal strengthens domestic purchasing requirements for school meal programs, expands dairy and protein incentives and requires additional reporting on payment errors.
Farm Credit and Beginning Farmer Provisions
The credit title modernizes USDA loan programs by substantially increasing Farm Service Agency direct and guaranteed loan limits. Guaranteed operating loans would increase to $3 million, guaranteed ownership loans to $3.5 million, direct operating loans to $750,000 and direct ownership loans to $850,000.
These increases reflect the dramatic escalation in land values, machinery costs and operating expenses over the past decade. Farm lenders have repeatedly argued that existing loan limits no longer reflect the realities of modern production agriculture.
Rural Development and Meat Processing
The bill contains substantial investments in rural America, including broadband deployment, healthcare, childcare and water infrastructure. It codifies the ReConnect broadband program, establishes stricter broadband deployment standards and creates initiatives to expand connectivity on farms and ranches.
The legislation also expands opportunities for small meat and poultry processors through additional funding and modernization support.
These provisions are likely to receive strong support from rural lawmakers seeking economic development tools outside traditional commodity programs.
Research, Forestry and Future-Oriented Provisions
The research title creates a new specialty crop mechanization and automation research initiative while expanding support for emerging agricultural technologies, pest management and workforce development. The bill also reauthorizes AFRI and AgARDA while increasing support for 1890 institutions and rural mental health programs.
Forestry provisions seek to accelerate active forest management through streamlined environmental reviews, expanded categorical exclusions and enhanced partnerships with states and tribes.
Political Outlook
The Senate draft represents Chairman Boozman’s effort to build a coalition-oriented farm bill rather than a partisan messaging document. By focusing on producer priorities, trade promotion, disaster assistance and rural development while avoiding several of the House’s more controversial provisions, the legislation appears designed to maximize bipartisan support.
However, major hurdles remain. Democrats are likely to scrutinize nutrition provisions, conservation funding allocations and implementation authorities. Fiscal conservatives may question the scale of mandatory spending increases. Meanwhile, livestock groups, biofuels advocates and specialty crop organizations will push for additional changes during committee markup.
The biggest takeaway is that the Senate proposal places far greater emphasis on risk management, export competitiveness and rural economic development than on regulatory fights. For farmers facing low commodity prices, weather volatility and uncertain export demand, that focus may ultimately prove to be the bill’s strongest selling point as Congress begins what is likely to be a lengthy farm bill debate.
