OMAHA (DTN) -- The U.S. Senate now gets its chance to tackle the budget reconciliation bill, which includes key provisions to help boost the farmer safety net, though there are some disparities in how commodities are treated under those provisions.

The lion's share of debate in the tax cuts and spending package, the "One Big Beautiful Bill," likely will continue to focus on Medicaid and Supplemental Nutrition Assistance Program (SNAP) cuts, as well as individual tax provisions, but farmers have a lot at stake with the bill's extensive farm bill provisions as well.

The farm bill provisions won't provide much immediate support for corn and soybean farmers in either the commodity title or crop insurance, according to recent analysis from the University of Illinois' Farmdoc economists.

A breakdown of price support provisions from Farmdoc analysis shows the reconciliation bill would increase spending on six major crops in the commodity programs by nearly $29.9 billion over 10 years, a 64% increase in spending for Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC).

"They increased the statutory reference price for PLC and they also increased the ARC-County coverage level and the maximum payment on that program," said Gary Schnitkey, Soybean Industry Chair at the University of Illinois' Department of Agricultural & Consumer Economics. "So, all of these things will increase payments to the farmers. Proportionally, more of them go to the southern crops -- rice, peanuts and cotton -- rather than corn and soybeans and, to some extent, wheat sort of gains as well."

Corn farmers would see an estimated gain of $5 per acre and soybeans would see an increase of $9 an acre under the ARC/PLC provisions. That does make a difference, but it doesn't come close to covering projected losses for those crops this year. A large part of the problem here is it difficult for Congress to financially support farmers growing two crops that combine for 178 million planted acres.

"You probably can't develop a cost-effective program that would do that," Schnitkey said. "It's simply not in the budgetary framework that we're working in."

Cotton farmers could see the safety net improve by $63 per acre while peanut farmers could see $138 an acre and rice farmers would see their safety increase by $174 an acre.

But combined cotton, peanut and rice acres are under 15 million total. Cotton planted acreage this year is pegged at under 10 million. Peanuts are planted on roughly 1.8 million acres, while rice acreage is under 3 million acres.

"IMBALANCE OF INVESTMENT"

The National Corn Growers Association (NCGA) raised concerns about the "imbalance of investment across various commodities" in a news release that largely praised the House for passing the reconciliation bill.

The bill increases the price floor for corn from $2.20 to $3.30, basically putting a cap on PLC payment rates. While corn spending is projected to increase 18% overall, that's the lowest among the six major commodity crops. Setting that $3.30 price floor is projected to reduce payments to corn farmers by nearly $3.7 billion.

NCGA noted the group "is particularly concerned" about the change in the price floor, "which would create a new gap in price coverage if the national marketing year average prices for corn were severely depressed. This legislation unfairly expands the concept only to corn farmers."

FARMDOC BREAKDOWN

The increases to statutory reference prices include:

-- Corn, $3.70 to $4.10 a bushel, up 11%

-- Soybeans, $8.40 to $10 a bushel, up 19%

-- Wheat, $5.50 to $6.35 a bushel, up 15%

-- Seed Cotton, $.367 to $.420 a pound, up 14%

-- Rice, $14 to $16.90 per cwt, up 21%

-- Peanuts, $535 to $630 per ton, up 16%

Base-acre spending increases in the reconciliation bill:

-- Corn, $5

-- Wheat, $8

-- Soybeans, $9

-- Seed Cotton, $63

-- Peanuts, $138

-- Rice, $174

The net result of those changes to ARC and PLC are projected to increase spending from FY 2025 to 2035 by $29.87 billion:

-- Corn, $3.99 billion, 18% higher

-- Rice, $7.93 billion, 64% higher

-- Soybeans, $4.26 billion, 71% higher

-- Wheat, $4.3 billion, 77% higher

-- Seed Cotton, $6.11 billion, 116% higher

-- Peanuts, $3.28 billion, 117% higher

CROP INSURANCE PROVISIONS

Farmdoc also analyzed some of the crop insurance provisions in the bill as well, looking at increases in premium support for basic and optional units for insurance products.

A key here is that the crop insurance changes in the bill don't address whole-farm units or enterprise units, which is the preferred policy option for most Midwest producers.

"An increase in basic and optional units would likely lead to a greater use of these units relative to enterprise and whole-farm units. Overall, that move does not appear to be desirable."

The additional subsidy benefits are minimal for grain producers in a large chunk of the country who buy a COMBO plan -- a revenue protection policy with the harvest price exclusion and yield protection that includes enterprise units or a whole farm policy.

"Most areas of the northern Great Plains, Midwest and Mid-South will see less than a $1 per acre increase in premium support," the Illinois economists detailed last week.

Only about 35% of corn and soybean acres are protected under basic or optional crop insurance units. It's about 46% for wheat producers, primarily in states west of the Missouri River. Producers in Nebraska and western Kansas are more prone to buy policies with basic or optional units. They could see their premium subsidies increase between $1-$5 an acre. That's also true for eastern Colorado and the Texas Panhandle.

Areas with a high level of specialty crop production -- California, Oregon and Washington -- could see premium support increase by more than $5 an acre.

The proposed increases in premium subsidies are projected to cost $2.178 billion over 10 years.

OTHER PROVISIONS COULD BE STRIPPED

Politico reported Friday that Senate Agriculture Committee Chairman John Boozman, R-Ark., has raised concerns that the agricultural package could fail to meet the Senate's "Byrd Rule."

Named after deceased Sen. Robert Byrd, D-W.V., the Byrd Rule restricts what can be included in a budget reconciliation bill. Specifically, a budget reconciliation bill must deal with changes in spending or revenue, not policies that don't address funding or taxes.

Politico indicated some parts of the farm programs may not comply with the Byrd rule "dealing with biosecurity, trade promotion, research and more."

Republicans still maintain they will push to pass a full farm bill even after the reconciliation package is done. There are other programs, such as credit, specialty crop provisions, conservation policies and rural development not addressed in the budget package.

SUPPORT NEEDED

Mark Nelson, director of commodities for the Kansas Farm Bureau, said briefly on a Kansas State University marketing webinar last week that he believes the improvements in the reconciliation bill could help farmers in the long run. The problem, however, is farmers need better support right now.

"We're chewing through working capital like crazy right now," Nelson said. He added, "In the short run, we're hurting now."

Farmdoc analysis of commodity programs: https://farmdocdaily.illinois.edu/…

Farmdoc analysis of crop insurance provisions: https://farmdocdaily.illinois.edu/…

See, "House Passes Tax Cut, Spending Package 'One Big Beautiful Bill' by 1 Vote," https://www.dtnpf.com/…

Also see, "Six Tax Changes Made for Farm Businesses in the 'One Big Beautiful Bill,'" https://www.dtnpf.com/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on social platform X @ChrisClaytonDTN

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