Crop Insurance Updates

"The one, big, beautiful bill (OBBA):

• Increases reference prices for Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) by 10% to 20% 

• Built-in future reference price increases with an inflation adjuster and an improved price escalator to prevent reference prices from becoming outdated when market and input costs change.

• New safety net begins right away — producers can receive the higher of the ARC or PLC payment for this crop year, 2025, with the new updated effective reference prices. But beginning with 2026 crops, farmers must again choose between ARC and PLC. 

• Payment limit of $155,000 on ARC and PLC, but LLCs and S corporations are treated the same as a general partnership which can allow multiple payment limits up from the old single payment limit. Payment limit of $155,000 will increase annually based on the Consumer Price Index for All Urban Consumers. This increase of nearly 25% would also apply separately to peanut producers, who could receive up to $310,000 in taxpayer subsidies annually ($155,000 for peanuts + $155,000 for all other commodities). Eliminates the eligibility cap of $900,000 adjusted gross income (AGI) to qualify for payments in Title 1 livestock and crop disaster programs, as well as Title II Conservation programs, for certain farm operations. Applies to any individual or entity that earned 75% or more of their income from farming, ranching, and similar activities. This includes income from agritourism, direct-to-consumer sales, the sale of agricultural equipment, and “other agriculture-related activities” as defined by the Secretary of Agriculture. Programs that no longer have income limits include: Livestock Indemnity Program (LIP), Tree Assistance Program (TAP), Emergency Assistance for Livestock, Honeybees, and Farm-Raised Fish (ELAP), Livestock Forage Program (LFP), and the Noninsured Crop Disaster Assistance Program.

• Includes provisions to strengthen and expand access to affordable crop insurance (see more details below):

  • Increases premium support for individual-based coverage across nearly all levels — starting at 55% — by an additional 3-5%.

  • Enhances the Supplemental Coverage Option by raising the coverage level from 86% to 90%, and boosts premium support from 65% to 80%.

• Extends the sugar program through 2031, while increasing the sugar loan rate to better align with current market conditions. Details below. 

• Improves livestock disaster programs

  • Sets Livestock Indemnity Program (LIP) payments at 100% of market value for losses from federally protected predators and 75% for weather and disease losses. Additional payment for unborn livestock, with varying multipliers for different types of livestock (higher multiplier for swine with no multiplier for cattle, horses, and bison).

  • Improves the Livestock Forage Program (LFP) to provide one monthly payment to eligible producers with grazing land in counties rated D2 (severe drought) for at least four consecutive weeks and two payments if D2 persists during any seven of eight consecutive weeks within the normal grazing period.

  • Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish: Would add subsidies for fish losses due to bird predators (known as “piscivorous birds”), an issue raised by Mississippi representatives in the past. Payment of at least $600 per acre of farm-raised fish.

• Dairy policy: The measure would extend the Dairy Margin Coverage (DMC) program until Dec. 31, 2031. Dairy margin coverage limits would apply after the first 6 million pounds of milk. The measure would also continue premium discounts for producers that make a one-time election for their coverage tier — producers can  lock in a 25% discount on DMC fees by signing up for 2026 through 2031. 

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Changes coming to LRP (Livestock Risk Protection) implemented July 2025 and forward: Can now place coverage before physical possession of the cattle. Premium billing will be the *second month following the end date of coverage.

 

New categories added for unborn calves which will be sold within two weeks after birth and dairy cull cows were added.

 

Contact your 1P1 agent for more details.