USDA defends $12 billion subsidy amid farm economy challenges

By Karl Plume and P.J. Huffstutter

ARLINGTON, Virginia/CHICAGO, Feb 20 (Reuters) - As the U.S. Department of Agriculture prepares to dole out $12 billion in government subsidies next week, officials and economists at the agency's annual forum near Washington defended the assistance as a necessary measure to prevent more farmers from financial ruin.

The two-day meeting this week in Arlington, Virginia, focused on a challenging farm economy that could see further headwinds after the U.S. Supreme Court on Friday struck down Donald Trump's sweeping tariffs that he pursued under a law meant for use in national emergencies. The ruling handed a stinging defeat to the Republican president, with major implications for the global economy and potential ripple effects on the U.S. farm sector.

WHAT USDA IS DOING

• The Farmer Bridge Assistance program is expected to distribute $11 billion in one-time payments to farmers. It's a per-acre rate for those who planted one of the 19 commodity crops identified as being eligible for the program. Another $1 billion is slated for specialty crop producers.

• USDA Secretary Brooke Rollins said Friday that the agency will open the application process ahead of schedule on Monday.

• In December, Rollins said farmers who qualify could expect "payments in their bank accounts" by February 28 - six days after applications open.

• "These resources will help carry producers into the next season, truly a bridge, as purchase commitments and new trade deals take effect and input costs continue to decline," Rollins told a packed ballroom at the Agricultural Outlook Forum in Arlington, Virginia on Friday.

• Rollins did not immediately respond to questions about how USDA will process an expected flood of applications.

• Deep staffing cuts across the federal government last year, including at USDA’s Farm Service Agency offices in rural America, have slowed farmer access to many government services.

• The federal payments will not fully compensate farmers for financial losses that have topped $30 billion in recent years, economists and industry groups said.

• The aid will act as “a bridge until the improvements in the farm bill programs are realized on the farm,” John Newton, vice president of public policy and economic analysis at the American Farm Bureau Federation, told Reuters on the sidelines of the conference.

• Earlier this month, USDA had forecast that U.S. net farm income would fall 0.7% this year, despite near-record government payments expected to account for nearly 29% of producers’ bottom line.

• USDA said it expects prices paid to farmers for corn, soybeans and wheat to rise slightly in the 2026/27 season, though prices remain well below recent highs.

• Average prices were projected at $4.20 a bushel for corn, $10.30 for soybeans and $5.00 for wheat — 10 cents higher than the current season and well below 2022/23 levels, USDA data showed.

• USDA Chief Economist Justin Benavidez said ad hoc farm aid, which has reached near-historic levels in recent years, has helped keep farmers in business during the downturn but likely supported input prices.