Farm bailout 2026 request would add $11.1 billion to subsidies
The Trump administration’s request would lift farm payments already forecast near $55 billion, according to USDA figures cited by AEI fellows.
By Sal Moretti · Money Reporter
3 min read
A new farm bailout 2026 request is putting another $11.1 billion in emergency aid before Congress, even as U.S. farmers are already forecast to receive about $55 billion in federal support this year, according to a MarketWatch opinion essay by American Enterprise Institute fellows Vincent H. Smith and Barry K. Goodwin.
The Office of Management and Budget sent House Speaker Mike Johnson a supplemental funding request totaling $87.6 billion, largely tied to Operation Epic Fury in Iran, according to the essay. Inside that package is $11.1 billion in additional farm aid that OMB says is needed because farmers face urgent financial pressure.
Smith, AEI’s director of agricultural policy studies, and Goodwin, an AEI fellow focused on agricultural policy and crop insurance, argue that the case for more money is weak when measured against federal farm-income data.
Why is Washington considering a farm bailout in 2026?
OMB’s request would provide $10 billion for row crops and specialty crops, including fruits and vegetables, because of production-cost increases linked to the Iran conflict, according to the essay. Another $1.1 billion would go to Florida farmers for losses from recent severe storms.
Senate Republicans have pushed for more than OMB requested, with a package that could reach $17.3 billion, according to the essay. Sen. John Hoeven, a North Dakota Republican on the Senate Appropriations Committee, has said he is ready to work with agriculture committee leaders in both chambers to speed up the request and possibly increase it.
If Congress approves the added money, Smith and Goodwin estimate total federal farm payments in 2026 could rise to between $66 billion and $70 billion.
How much farm aid was already expected?
The USDA’s February farm-income forecast projected more than $20 billion in payments from multiyear programs and permanent laws approved by Congress, according to the essay. It also projected $23 billion in ad hoc aid from emergency and discretionary programs, plus $11 billion in net subsidies through the federal crop-insurance program.
That adds up to about $55 billion in federal support before the new request, with much of it going to large row-crop operations producing corn, soybeans, wheat, cotton, rice and peanuts, Smith and Goodwin wrote.
The authors said the farm sector is not showing signs of broad financial distress. Citing USDA figures, they wrote that farm income is expected to fall from its near-record 2023 level but remain at or above its long-run average, while the sector’s debt-to-asset ratio stands at 13%.
The largest crop producers would be first in line for much of the money, according to the essay. Smith and Goodwin cited research saying the bulk of payments would flow to roughly 150,000 farms that make up the largest 10% of crop producers.
For comparison, the Congressional Budget Office has estimated fiscal 2026 spending on SNAP, the food-aid program serving about 40 million people, at $100 billion, according to the essay.
Are fertilizer and energy costs driving the request?
Supporters of additional farm money have pointed to energy and fertilizer costs tied to the Iran conflict, Smith and Goodwin wrote. They said current price data does not show the kind of sectorwide damage that would justify the extra aid.
Potash fertilizer prices in the U.S. were largely unchanged by the conflict, according to the essay. Nitrogen prices rose after the Strait of Hormuz closed but later fell sharply, while phosphate prices were 20% above February levels and are expected to decline after a temporary halt to tariffs on Moroccan imports.
The authors also wrote that many farmers had already bought fertilizer for much of the 2026 crop year before the Iran conflict and the Strait of Hormuz closure.
Smith and Goodwin said federal help may be justified for Florida crop damage from severe weather if other programs have not covered those losses. They also noted that many crop losses are already covered by the heavily subsidized federal crop-insurance program.
This story draws on original reporting from MarketWatch.