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Talking Crop is a row crop production podcast that brings current trends, actionable management considerations, and research updates from guest experts to farmers, agribusiness representatives, and agriculture agency professionals.
Hello, and welcome to the Talking Crop Podcast. My name is Kathryn Seebruck. I'm a Commercial Agriculture educator with University of Illinois Extension serving Jo Daviess, Stephenson, and Winnebago Counties. Talking Crop is a row crop production podcast with episodes occurring every other week during the growing season between May and September. In each episode, I bring on a guest speaker to discuss topics related to their areas of expertise.
Kathryn:In today's episode, I talk with Reagan Tibbs, a Commercial Agriculture educator with Illinois Extension. Reagan serves Logan, Menard, and Sangamon Counties, and his expertise is in Agriculture Policy, an area of discussion that has been on the forefront of everyone's minds recently. Reagan and I discussed the effects of tariffs and their current status, as well as changes pertinent to commodity crop producers in the One Big Beautiful Bill Act such as ARC and PLC, Base Acres, and the Estate Tax, and we rounded out our discussion by chatting a bit about the farm bill. Overall, Reagan provides us with a really nice snapshot of the current policy landscape. In the episode description I've linked Reagan's contact information as well as some farm doc articles that do deeper dives into some of what Reagan and I discuss.
Kathryn:On the next episode of Talking Crop I'll be speaking with Rachel Curry, another fellow Commercial Ag educator with Illinois Extension, whose focus is on the Nutrient Loss Reduction strategy. Also joining us is a farmer partner of Rachel's who will be chatting with us about his experience with cover cropping and other conservation practices. That episode will air on Wednesday, August 6. And now please enjoy this episode of Talking Crop, Ag Policy Snapshot, Tariffs, the One big beautiful Bill Act, and the Farm bill with Reagan Tibbs. Hello, Reagan.
Kathryn:Welcome to the Talking Crop podcast. Thank you so much for joining me today.
Reagan:Thanks for having me on, Kathryn. I really appreciate it.
Kathryn:I mentioned in the introduction to the last podcast that this episode is going to be a little bit different from normal for me because normally I have folks on who talk about crop production practices. But I think that we could use some of your policy expertise because of all of the new changes that have been happening recently in the policy world of Ag. I'm really excited that you're on with us today to kind of parse through some of these things. So we'll be talking about tariffs, the big beautiful bill, and how that is affecting agriculture, and a little bit about the the actual farm bill as well. So first, starting with tariffs.
Kathryn:There's been a lot of changes with tariffs since the current administration took office in January. I think it's important for us to kind of muddle through the weeds on that one. But before we get into that, can you first explain how tariffs impact American agriculture?
Reagan:Tariffs impact not just agriculture, but basically our entire economy, right? So tariffs, we apply them on goods that we either bring in from other countries, which we call imports, or goods that we send out to other countries called exports. Generally speaking, the logic or the reasoning behind why government would impose tariffs is mostly to protect domestic industries. That's usually the biggest reason why. For example, if we're trying to protect our lumber industry, we're then going to impose a tariff on lumber that we import from Canada or from other countries in order to give our domestic producers a chance to get into the market or to at least have a bigger share in the market.
Reagan:The other reason and one of the more proven ways that tariffs work is they generate revenue for the government. How much they generate is up to what the tariff rate is set at and how much that product is imported or exported. With agriculture, there's a twofold part to it. One is that everybody uses agricultural products, whether they know it or not. Tariffs on agriculture can really have an impact on the producers in terms of it can make the products they're using more expensive. For example, we import a lot of fertilizer. If we're putting an import tariff on products from a certain country or even on fertilizers themselves, then that could see the price of fertilizers go up, and then that, in turn, increases our cost of production and then makes our margins a lot tighter. Also it can make prices in the grocery store go up. Let's say we decide to impose a tariff on beef imported from Mexico because a lot of our processed beef in The United States comes from outside the country. That can then lead to prices at the grocery store going up, whether you buy it at Walmart, Sam's Club, Hy Vee, whatever your grocery store of choice is, if they're getting it from a large scale packer that's based outside the United States, then they're going have to pass that cost along to the consumers as well. Tariffs really impact not just the producers in agriculture, but also the consumers, which is everyone.
Kathryn:You mentioned how tariffs could potentially increase input costs, but how do they affect crop prices?
Reagan:A prime example is what we see right now since the 2018/2019 trade war. During that trade war, the U. S. and China were going back and forth with each other.
Reagan:It seemed like every day China would say, we're going to limit how much we're bringing in of U.S. soybeans. Then the U.S says, well, we're going to put more tariffs on you. And then it just went back and forth like that forever. In that aspect, when we lose access to one of our key markets for soybeans in China, then we have to find other places for our soybeans to go, whether it's on the international market or domestically. That can certainly change the market, whether we're trying to go to a different country or a different region in the world to sell our soybeans, or if we're trying to use it here domestically for crush or for feeding or whatever other purposes.
Reagan:The other impact of this too is that China, rather than saying, oh, well, I guess we're not going to get much more soybeans in because we're not getting it from the United States, they've been sourcing it out from other countries. The one country that's really been beneficial to that is Brazil. We've really seen Brazil take off in terms of the trade dynamic in the world. They've become one of the largest suppliers of corn and soybeans in the world recently, and that's because of their alliance and their relationship with China becoming stronger following the U. S.
Reagan:and China trade war. Then that puts us at more of a disadvantage now because we are having to compete. When previously we really haven't had to compete with Brazil as a supplier. Then in Argentina we're seeing conditions change to where they're now producing more soybeans and they're now sending more soybeans out around the world. Now we're having to fight against two countries that traditionally we haven't really had to fight against, but now are really our main competitors in the agriculture space when it comes to supplying the world with corn, soybeans, beef, whatever it may be. That definitely makes our markets a lot more volatile, it makes it a lot more difficult to project and figure out where the markets could go.
Kathryn:You mentioned the 2018/2019 trade wars, and that was also a result of tariffs. I wondered if you could compare and contrast a little bit of how that situation back in 2018/2019 differs or is similar to kind of the situation that we're seeing today.
Reagan:A lot of the rhetoric and a lot of the commentary about why we're doing it is pretty much the same from the first administration to now. Back then it was we need to get fairer trade deals because the rest of the world was taking advantage of he U.S. and we could be harnessing so much more for our domestic producers. We're going to start imposing these tariffs on products we're bringing in from these countries. That was kind of the rhetoric back then in 2018/2019. And we're seeing the same exact things now.
Reagan:It's, hey, according to the administration, we feel like we're being taken advantage of. There are countries that are really profiting off of sending their products here, but we hardly seeing any products there, so they really don't. They get all the benefit and we have to deal with it all. So we're going start slapping tariffs on everybody in the hope of trying to get trade deals. That was Liberation Day, which feels like forever ago now at this point, even though it was only three or four months ago. That was the purpose behind Liberation Day was, hey, here are the tariffs that we're going to start imposing on all these other countries. Whether we're close allies or not, we're going start slapping tariffs on you if you don't start giving us favorable trade deals. We've seen some countries respond to that. The UK has been the biggest one that has responded to that. With The UK, it's a bit different now that they're outside the EU. I know earlier this week and last, there were talks about a renewed trade war with the EU, with Canada. China is still lingering out there. There's a lot going on with trade right now. I think part of that is because this administration feels like that we should be getting a fairer deal in terms of trade, but we're seeing the impacts of that in agriculture pretty substantially.
Kathryn:You mentioned how the status of things with us and these other countries are. I think there was a deadline of July 9 where the tariffs were paused or at least lessened for a little bit. That was recently extended, wasn't it?
Reagan:I think so. For some countries it was, especially if they were involved in negotiations with the U. S. They said, okay, fine. We'll let these continue on. There was that deadline. I don't know which countries met that deadline or which countries had that deadline extended. Part of that liberation day was we're giving you until this day to get a trade deal with us early. Start negotiating a deal with us. And if not, then we're slapping all these tariffs on you. Another thing to consider with trade is that trade now is much different than what it was even post World War II because now we are in a situation where we have the World Trade Organization and the WTO has specific rules as to how you can apply tariffs to any country that's in the WTO, which is most countries in the world, have to give each other what's called most favored nation status.
Reagan:This basically means that you have to be favorable and be reasonable when you apply tariffs or other, what are called technical barriers to trade. That could be anything from tariffs, but also can include protections from preventing certain products from entering the country on biological grounds. For example, in the U.S., we tend to prevent people from bringing in fruits and other things like that from other countries because we don't want invasive species to get into he United States, right? But that seems to have kind of flown out the window. The problem with the WTO and many other international organizations, whether it be the United Nations or anything like that, is they really don't have an enforcement mechanism.
Reagan:You can lodge a challenge with the WTO, but that process can take years to fully figure out and to fully flesh out what's going to be. At the end of the day, the country that, let's say the WTO says, United States, you are wrong here. You have to lift these tariffs or you have to revise this policy. I think you could say, no, they don't have to. That's the problem with the WTO is that there's hardly any enforcement mechanism to this. So while that is there and while it's designed to try to make trade more fair and equitable around the world, it does have that issue of enforcement.
Kathryn:Sure. Yeah, I didn't know that about the World Trade Organization. That's interesting.
Reagan:You can take whole classes on global trade and how the WTO impacts things like that. And it's, except from where we were at post World War II morphed into the World Trade Organization in the mid 1990's. And people have said, oh, well, WTO has basically faded into irrelevance. That's some of the arguments that are out there about it. But if it were a perfect world, the WTO would be the one mediating these trade disputes between these countries rather than the two countries just battling each other.
Kathryn:Going back to that, comparing and contrasting to 2018/2019 and the status then. Back then, the USDA actually provided over $25,000,000,000 in income support payments to farmers as a result of the turmoil that ensued. Do you know is there any indication that something similar would be repeated now? Or do you happen to know what would need to occur for this to potentially happen again?
Reagan:Well, with those payments that occurred in the 2018/2019 tribute, that came out of an act of Congress. It wasn't just the USDA saying, here's billions of dollars to support farmers. That had to get authorization from Congress. So with Congress having recently just passed the One Big Beautiful Bill, I don't really know what could happen. I mean, yes, if the trade war continues to get worse and if market prices continue to get softer and softer I think we've just seen new crop soybeans dip below $10 and new crop corn is dipping right at $4. If prices continue to get worse, then the USDA might try to come up with some type of program to alleviate all those pressures.
Reagan:But we don't know. That's the thing with how volatile politics is these days, one day we could be thinking about one policy approach and then the next day or the week after, we've abandoned that approach and we've gone to a different thing because somebody in Congress or somebody in the administration thinks, no, I want to do it my way, and then things change.
Kathryn:Unfortunately, there is just a lot of speculation on some of those things right now. But fortunately, there are some things that are a little bit more concrete, shifting towards that Big Beautiful Bill Act, and it getting passed recently. There were some very specific things in there that directly impact agriculture, and I wanted to chat about those. The first being the changes to Price Loss coverage or PLC and Agriculture Risk coverage or ARC. Can you highlight what changes are being made to those?
Reagan:Yeah, absolutely. ARC and PLC are the two kind of premier or biggest commodity programs the USDA has, and those are the programs that most farmers will enroll in to try and get some type of assistance, especially in years where yields might be lower or in the case of PLC, where market prices will be lower. With PLC and ARC, typically the way they're calculated is complex, probably a little too complex to talk about in a podcast where you can't write it out and people see it. But one of the things with ARC especially was an increase to the benchmark. I think that is going to be a big thing with ARC moving forward now with an increase in that benchmark, that's going to increase technically how much is able to be sent to a producer.
Reagan:I believe before the benchmark was 85%. Now it's moved up to 90%. 5% may not sound like a lot, but that can be a lot, especially for our large operations. Then the biggest thing, and the one that I think has really hung up the Farm Bill for the last few years, has been an increase in reference prices. With those programs, there's usually a statutory reference price that says this is the price that the USDA is using for its calculations to determine if a payment is triggered and if it is, how much you're getting. Those reference prices were increased with the One Big Beautiful Bill.
Reagan:I believe corn went up to $4.10 from about $3.70 and then soybeans went up to, I believe, about $10 if I'm not mistaken. That's going to increase the amount of money that has to be set aside for those programs as well. Under the federal reconciliation rules, which is what the One Big Beautiful Bill was, it's a reconciliation bill. When you increase money in one area, you have to offset that somewhere else. That was the big discussion, and that's what's held up the Farm Bill forever was, okay, we're going to put more money towards these commodity programs.
Reagan:We're going to put more money towards ARC and towards PLC. Where are we going to get that money out of? And generally, that's a very hard discussion to have in Congress. Generally speaking, it's not a very pleasant discussion to have. It's a very politically charged, it's a very cutthroat type of negotiation. The two big changes are the increase in the benchmark, especially for ARC, and then also the increase in those reference prices. From the way it sounds too for the 2025 growing year, that whether you elected ARC or PLC, it doesn't matter. For the 2025 growing year, producers are going to get the higher of the two payments, which is a big deal. Then for the 2026 growing season, you then have to do your annual election, which occurs every March. That will remain the same following 2026. What they've done with 2025 is recognize that, hey, tariffs are having an impact, markets are softer. We're just going to say, okay, for ARC and PLC, whichever is the highest for the calculation for that particular producer, for that particular state, however they do it, that is the payment they're going to get. Whether they chose that program or not, that's what they're going to get. I think that's also going to be huge in seeing how that supports, especially if we're still going to see projected negative returns, that's going to impact those returns and see if it does impact our farm economy overall.
Kathryn:That's a nice change for this year. I'm sure producers will enjoy this year's results. But unfortunately, it will, like you said, revert back to where they have to make an election in subsequent years. You mentioned how there are very tight margins with producing agricultural commodities these days. And obviously, these changes to ARC and PLC are very positive and should be helpful.
Kathryn:Do you think they're enough to have any significant impact on these crazy thin margins that producers are facing?
Reagan:That's a really good question. I think with margins, it's not just market support, it's also inputs. We've seen input prices go down a little bit the last two years. I remember, was it 2021, 2022, when we saw fertilizer prices just skyrocket and reach some of the highest they've ever been, especially for like ammonia. Those prices were astronomically high. They've come back down a lot since then, but they're still higher than what they were before that COVID era, if we want to call it that. I think they'll help to some extent. They'll provide some support, especially for those smaller scale producers where the margins are a lot tighter, right? Where with our large scale producers, you have a lot of opportunity to make that income from somewhere else. Have a lot more acres.
Reagan:You'll spread out your costs a lot more. It's our smaller scale producers that are going to feel much more of a pinch with tighter margins and with higher input prices. I think they'll help a little bit, but I think the real thing is prices. If input prices don't soften at all, and then if we also see market prices remain pretty soft, if we still see corn hovering around $4 if not below, and soybeans hovering below $10 that's going to make this a lot, lot harder, doesn't matter what scale you're at. I think they'll help a little bit and they'll provide some immediate assistance. In terms of long term assistance, I'm not sure how effective it will be.
Kathryn:You made some good points. I think they're a helpful aspect, but they're only one aspect of many that producers have to juggle when it comes to margins. Until those other things get in line, then unfortunately, we probably will see those thin margins.
Reagan:That's a difficult thing to do with policy. We try to address everything at one time. At some point in time, it's only feasible to just focus on one aspect of a solution. I think with the changes to ARC and PLC, they're trying to fix that one aspect and at least provide some type of immediate lifeline support. Long term, there's going to have to be some other external factors other than policy changes that are going to need to happen in order for there to be a lot of support for the Ag community.
Kathryn:Another change that was made in the Big Beautiful Bill Act is a change in base acres, which from what I understand is a big deal. Can you talk about the concept of base acres and why it's a problem or can be problematic if a farm has more planted acres than base acres?
Reagan:The idea behind base acres is that, so the best way I can describe it is to give an example. Let's say I'm here in Logan County in the center part of the state, and I have 1,000 acres overall. But some of those acres are not in a covered commodity. Let's say I keep 100 of them in pasture lands. I raise cattle, I do whatever with it.
Reagan:I keep it in pasture, keep it in CRP conservation, whatever. It's not in a covered commodity. There are about 23 different covered commodities under the Farm Bill and under agricultural programs through the USDA. The other 900 acres, those are in a covered commodity. Let's say I keep 400 in corn and 500 in soybeans, then I rotate those out every year.
Reagan:I can come to the USDA office and when I sign up for ARC or PLC, they'll ask me to enroll my base acres, and that will be those 900 acres of a covered commodity that I'm eligible to enroll. Now, I don't have to enroll all of them. The thing with base acres is that a producer does not have to enroll every single acre that they have. They can choose which ones they enroll and which ones they put into these programs and designate as base acres. There's definitely some situations where you cannot enroll them as base acres. Pasture land is exempt, pasture land is not eligible to be base acres. There are some type of crops that are not eligible to be in base acres. That's a preventative thing. In terms of a negative, it's just kind of the preference of the producer. If they want to have those acres enrolled, if you don't have it enrolled, then you're not eligible to get those ARC or PLC payments.
Reagan:You can still put them in other programs. You can put them in CRP. You could put them in EQIP or whatever else they may be. And we might see that, let's say, for example, of those 900 acres, I have 200 that are kind of really, really marginal. They're sand.
Reagan:They don't really do very well. I might decide to take those out of production and put them in CRP. Then that reduces my base acres then to, 900 minus 200, 700. It depends on the preference of the producer. I've heard some, if you're a renter, if you rent farmland from a farmland donor, they might require that you enroll certain acres of their acres as base acres. They might say, you can only put this many in base acres. It's just the situation. It really is kind of on a case by case basis if it makes sense to enroll a certain amount of acres as base acres.
Kathryn:With the change to base acres in this bill, what are these changes?
Reagan:Right now, I don't remember what the cap is, but they're right under statute, there's been a cap in base acres. That means that once that cap is reached, there can be no more base acres added and therefore enrolled in these programs. This bill gives a one time increase of 30,000,000 acres. That means that across the entire United States, across all the covered commodities, we can add 30,000,000 new acres into these programs and add them as base acres, which sounds nice, right?
Reagan:We're giving coverage to more producers, and that means we're able to help support more people. The problem is when you look at the rules as to who can enroll and who is eligible to enroll, and I believe FarmDoc has done some really good work on this, in that when you analyze the amount of acres that are eligible, it's greater than 30,000,000. I believe it's like 38.5 or something around like that million acres that are technically eligible to be enrolled as base acres. Now the USDA, under the One Big Beautiful Bill, has to prorate that. That necessarily means that not everybody can add base acres.
Reagan:They have to follow those rules and they have to say, well, you're technically eligible to add this many, but realistically, we're only going allow you to enroll this many because of that. That's going to take a while for the USDA to figure out. When you look at where these commodities are at, where those covered commodities are at, and where base acres are relying on, I think we'll see some there's going be some pushback on how they determine that. There's going to be some pushback and a lot of people are going to be upset at the USDA for how they do that, but they have to follow the law. They have to follow what the One Beautiful Bill says, which requires that prorate to get it back down to 30,000,000. That's going to take some time. I don't think it's going to be quick. It's going to take a minute for them to figure that out. Then plus that only covers starting from the 2026 growing season. By the time you make your elections for next year, then there will be the opportunity to enroll base acres if have eligible base acres to enroll.
Kathryn:Are there any other unknowns or currently unanswered questions with these changes besides that prorating issue?
Reagan:It's how the USDA is going to handle some of these programs. I've done some reading on FarmDoc and there was a FarmDoc webinar yesterday talking about changes to crop insurance. I will admit I'm not very familiar with crop insurance. That's one thing I've always focused on our PLC when it comes to Farm Bill crop insurance. It skirts my knowledge a little bit. There are some changes to crop insurance, especially with supplemental coverage options and the subsidy rates for crop insurance, how those are changing. I think with the base acres, the USDA has got a lot to figure out here. They've been given this plethora of things from the One Big Beautiful Bill that they have to implement, not just in production agriculture, there are a whole lot of other things they have to work on that are outside of just these commodity programs. The USDA has got a lot on their hands. What's important to keep in mind is that farmers need to keep in touch with their FSA office because their FSA office or the USDA office will let them know when things change, they'll probably send a letter.
Reagan:That's typical government function. They'll send you a letter. There's no harm in calling the USDA office and saying, hey, what's the status? They'll probably tell you, we don't know yet. We'll have something out. I'm sure whenever the USDA does figure stuff out, they'll put it out there on social media or whatever media scapes there are. It's going to take some time for the USDA to figure all this out because like I said, they've been given a laundry list of things that have been changed now that have been pretty much the same for realistically since 2014. Now they're having to change pretty much all of it. It's going take a while to figure out.
Kathryn:With these changes, what is your call to action for producers with these base acre changes? What should they do? What next steps should they take to potentially take advantage of this?
Reagan:Like I said, definitely kind of keeping in touch with what's going on, whether it's through your FSA office or just kind of keeping an eye out through the USDA what changes are being made. That's the biggest thing because as soon as you can know about it, then you can start to make those decisions for your operation. Just seeing where you're at. Do you have acres that you could enroll in base acres? Or does it make sense to, Oh, they're not in base acres now because of this reason.
Reagan:Okay, maybe we keep them out or maybe we enroll them in a different program like CRP. And we'll talk about that, I'm sure, with the Farm Bill later on here, but definitely keeping in stock of where your operation is currently at. Then once the USDA does decide to what to do, then seeing how that can tie into your operation and how you can make those changes. But definitely keeping in touch with your FSA office and with what the USDA is doing in general, whether it's through social media, seeing it on the news, whatever it may be, definitely keeping on track of all those is most important.
Kathryn:That's really good information to have. I'm sure with all these changes, there's going to be a lot of things that producers are going to have to do paperwork wise. I think
Reagan:there's it's government. There's always paperwork. Absolutely.
Kathryn:One last thing on the One Big Beautiful Bill, Reagan, is the estate tax. What change is being made to the estate tax through the big beautiful bill?
Reagan:If we rewind our clocks and go back to 2017, the Congress passed the Tax Cuts and Jobs Act of 2017, which was a large scale reforming of the tax system in the United States. One of the things was an increase to the estate tax exemption. It was right around $11,000,000 $12,000,000 Basically, if your estate was below that figure, you do not have to file an estate tax return with the IRS. That provision is technically expiring in 2025, and I believe that is going back down to around $6,000,000 I believe basically half of it. We were going to see, according to analysis from the USDA, a lot more farm operations not only have to pay estate tax, but also have to file estate tax returns with the IRS because of that reduction. The One Big Beautiful Bill does raise that exemption back up to $15,000,000 I believe for the next few years. There's talk about making that permanent, which would be interesting to see how that would work. What that means is that with that exemption level, if you're a farm estate, if you have to file those estate tax returns, if your estate falls below that $15,000,000 mark, you probably don't have to pay any estate taxes. But if it is above those, then you probably will have to pay some type of federal estate tax.
Reagan:I'm not a tax expert by any means of the imagination. The federal tax code and tax code in general is one of the most confusing things known to man. When producers call and ask me about that, I tend to direct them to their CPA. They're going to be able to understand this way better than I ever can. Plus, if it's a CPA that you've worked with and have a relationship with, they'll know what your operations position is.
Reagan:They'll know where you're at. They'll know what the status is of everything. They'll be able to give you some better sense of where your operation is going to be at because of that change to the exemption.
Kathryn:Great. You made a couple of good points with what the last topic we talked about with base acres, reaching out to your local FSA office and then with the estate tax changes, talking to your CPA. It's really important to understand who those people are in your lineup, so to speak, and getting in contact with them and and getting those questions answered. That's a really great call out. Reagan, one last topic that I wanted to discuss is the Farm Bill. What we've been talking about with all these changes in the Big Beautiful Bill Act, are these things that typically would be addressed in a quote unquote standard Farm Bill?
Reagan:No Farm Bills are ever standard, Kathryn, let's be honest here. All these changes, except for the estate tax portion of it, the changes to ARC and PLC, crop insurance, base acres, that would all be in a normal Farm Bill. Usually a Farm Bill is done every five years. The last full Farm Bill was in 2018. 2018 was more a modification of the 2014 Farm Bill. Really there hasn't been a true new Farm Bill since 2014. There was supposed to be a Farm Bill in 2023. That didn't happen because of whatever reason. There was an extension. What they said that the programs of the 2018 Farm Bill are extended for one year through, I believe it was like 09/01/2024, if I'm not mistaken. Then last Congress, they tried to redo the Farm Bill.
Reagan:The House passed their version of a Farm Bill. The Senate had their version, but it wasn't really close. And the Senate, I don't believe the Senate ever got the chance to pass their version of the Farm Bill. What they ended up doing was there was an extension in the Farm Bill, one of the spending bills that Congress passed last year was a one year extension of the Farm Bill in that. Now we arrive to the situation where the One Big Beautiful bill has a lot of the things that would be in a Farm Bill typically. ARC and PLC changes, especially with the reference prices, the roll on base acres, the changes to crop insurance. That really doesn't leave a whole lot to be discussed in a Farm Bill. One thing that is missing from the One Big Beautiful Bill, because it had to be, was changes to conservation. One of the big issues with the Farm Bill last year was if we're going to increase reference prices, where are we going to cut that money from? The area we're going to do that in was through the Inflation Reduction Act funding to conservation. What the IRA did was it gave a lot of money to the Commodity Credit Corporation in the USDA for conservation practices, whether that be CRP, EQIP, any sort of abbreviated conservation program the USDA operates. What the House Ag Committee did last year was take a lot of that money out of the Commodity Credit Corporation for conservation and put it towards raising reference prices and all these other things. That wasn't happening in the One Big Beautiful Bill Act. There's not a mention of conservation practices at all in there. I believe the CRP expiration date is coming up pretty close. Congress is going to have to do something with the remaining parts of the Farm Bill that were not addressed in the One Big Beautiful Bill Act. There's going to have to be something passed before September. But when you've just passed a bill that was purely on party lines, that was controversial as it was, now you have to bring up a bill that probably is going to make more cuts to conservation and reduce more funding from the IRA for conservation. That's probably not going to be very popular either. The political sort of landscape for that is going to be very, very difficult to get done before. Generally speaking, if something's not done before August, unless it's super, super important, Congress is really going to return to it. Congress tends to take the entire month of August off as a summer break. Wouldn't it be nice, right? If we all at work just say, we take a month off, but Congress gets to do that because they're special.
Reagan:So with Congress taking basically most of August off, we could potentially see there being a last minute kind of rushed version, a skinny Farm Bill is what a lot of people are speculating, that addresses conservation and a few other aspects of it within the USDA and through other programs. It'll be interesting to see if there's actually the support and the willingness to do that and if there's going to be bipartisan support for doing that. Generally speaking, when you have a controversial bill, you only get partisan support. For something like conservation funding and any other changes that are left, those tend to be more bipartisan. We'll eventually see if that landscape still exists after the passage of the One Big Beautiful Bill now.
Kathryn:There's a lot of wait and see. Ii is a lot of the theme that I'm noticing here throughout our conversation.
Reagan:Typical with federal government, hurry up and wait. That's usually, hey, we're going to do this thing, but it's going to actually take effect five years from now. That's generally how the federal government tends to operate. That's usually how the Farm Bill operates too, if you think about it. What they're saying is that for the next however many years, let's say starting in 2026, this is how it's going to be for the next next ten years on.
Reagan:That's usually how a Farm Bill works. It's not just this is what it is for the next five years, because that already has to be planned out physically. They already have to have the money set aside. They have to plan all that out ahead of time. So that makes it even more difficult when you're trying to project ten years down the road how much money are we going to have to spend on CRP, EQIP, all those other types of programs.
Kathryn:Well, Regan, I'm really glad that we got the chance to talk about all of this. Like we've been saying, there's been a lot of changes, and I think it's probably helpful for folks to be able to to parse through it. And as I said in the beginning, I normally don't talk about policy on Talking Crop, but all of these policies and these changes directly affect crop producers. I'm very glad that you were able to help us, to walk us through it. Yhank you so much for joining me.
Reagan:I appreciate you having me on and letting me nerd out a little bit. Normally when people ask me policy questions, they get scared because I tend to talk a lot. The fact that you let me talk about it is pretty impressive, pretty brave on your part. But seriously, thanks for having me on. I really appreciate the opportunity.