Senate Greenlights Ag Bill: Huge Win for Farmers
The U.S. Senate has delivered a major legislative victory for the agribusiness sector, passing the Reconciliation Bill—dubbed the "One Big, Beautiful Bill"—on July 1, 2025. Approved by a narrow 51-50 vote with Vice President JD Vance casting the tie-breaking vote, this comprehensive legislation is now set for a House vote before July 4. Its passage is anticipated to secure significant priorities for farmers and ranchers nationwide, reshaping the landscape of agricultural policy.
Among its key provisions, the bill aims to substantially benefit producers through critical tax reforms. It includes an increase in the Death Tax exemption, offers a permanent extension of the vital Section 199A tax deduction, and boosts the Section 179 tax deduction. These measures are designed to provide much-needed financial relief and stability, directly impacting the economic viability of farms and ranches across the dairy industry and other agricultural sectors.
Beyond tax benefits, the Reconciliation Bill introduces significant improvements to federal agricultural programs. It focuses on enhancing the affordability of federal crop insurance, a crucial safety net for producers against unpredictable weather and market volatility. Furthermore, the bill doubles funding for trade promotion programs, aiming to expand market opportunities for U.S. agricultural products globally, and strengthens the producer safety net through strategic modifications to commodity programs, impacting dairy economics and trade.
A notable inclusion in the Senate version is the extension and modification of the 45Z Clean Fuel Production Credit. This provision is designed to support the development of low-carbon fuels and cultivate new markets for U.S. soybeans and corn. Crucially, it qualifies feedstocks sourced from the U.S., Canada, and Mexico, promoting regional agricultural trade and sustainable fuel production within the international dairy community context of feed sourcing.
The bill also brings welcome news for the dairy sector, renewing the Dairy Margin Coverage (DMC) program through 2031, updating its production history calculation, and offering a premium discount for extended coverage. It provides mandatory funding for USDA dairy processing cost surveys, integrates Inflation Reduction Act conservation dollars into the farm bill baseline for increased funding, and boosts support for animal health programs. Leading agricultural groups, including the NCGA, National Milk Producers Federation, American Farm Bureau Federation, and ASA, have overwhelmingly expressed their strong support and gratitude for this landmark legislation.
