Fall 2025 Ag Policy Update

Strengthening Your Operation: Understanding Agricultural Policy

Every producer is thinking about how to make their operation more successful and that changes on a per year basis. One year it could be an animal health product while the next year it could be new funding opportunities through NRCS or EQIP or a new risk protection strategy like LRP or PRF. No matter the approach, cattle producers need to think about all the variables that affect their operation, and one of those is agricultural policy.

Much has changed recently in agricultural policy, making it difficult to understand what and could impact how your operates today and in the future. Through the Prime Pursuits X AgSpire Advisory Program, we will explain the newest changes to agricultural policy and how to use it to your advantage.

Federal Conservation Program Cancellations & Funding Changes

In recent months, the USDA has announced cancellations, freezes, and restructurings of multiple conservation programs. These changes affect producers nationwide, from cattle ranches in the Great Basin to row crop farms in the Midwest.

Programs such as the Regional Conservation Partnership Program (RCPP) and Local Food Purchase Assistance (LFPA) have been paused or canceled. In Montana, this means stalled progress on large-scale watershed and grazing management efforts that were set to receive RCPP funding.

One such project in the Missouri River Basin region—designed to help ranchers improve soil health and water retention—was left in limbo after funding was frozen. Without these dollars, local conservation districts and producer coalitions are unable to implement planned rotational grazing systems, fencing infrastructure, or drought-resilient forage plantings, which are critical in this increasingly arid region.

The Climate Smart Commodity Partnerships program was also paused, then restructured with additional parameters under the new Advancing Markets for Producers (AMP) program. While AMP aims to keep funding flowing, new requirements could shift eligibility and reduce options for producers looking to adopt conservation-focused practices.

These changes can leave producers uncertain about what opportunities are still available or how to plan for the seasons ahead. More than $2 billion in conservation contracts signed under the Inflation Reduction Act are now frozen. Many producers had already committed time and resources with the expectation of receiving these funds to offset costs and advance soil health, grazing improvements, or nutrient management plans.

So far, USDA has released only a small portion of these funds, leaving many to wait for clarity or reallocate resources to cover the shortfall.

However there is some change on the horizon: the recently passed “Big Beautiful Bill”(OBBB) reauthorizes CSP, EQIP, and RCPP funds that were canceled in the IRA freeze, meaning these programs will become available again in future years.

The OBBB reallocations unspent IRA funds into the Farm Bill baseline, effectively turning previously temporary investments into permanent, ongoing support for agricultural production. This includes the following key points:

• RCPP: Baseline funding increases gradually from $300 million to $450 million by 2031
• EQIP: Increases from $2.025 billion to $3.255 billion annually.
• CSP: Rises from about $1 billion to 1.375 billion annually.
• ACEP: Also sees a funding boost through these baseline enhancements

OBBB rescinds unused IRA funding that had not been committed to projects. In turn, these funds are repurposed to increase future baseline funding, reducing total conservation outlays in the short term but extending greater long-term program support.

These adjustments mean longer-term certainty for ranchers and farmers, though it may result in less funding in the near term than initially compared to what the IRA offered.

Shifts in USDA Priorities & Workforce Reductions

Policy shifts are not the only changes affecting technical assistance and support. The USDA is undergoing significant staffing reductions, with nearly 1,200 NRCS conservation staff positions expected to be cut nationwide. This reduction could impact timely conservation planning, delayed approvals for program applications, and fewer boots on the ground to help producers implement new practices effectively.

In addition, USDA is reviewing programs containing climate-smart or DEI (Diversity, Equity, Inclusion) language, with over $400 million in funding targeted for review or termination. While the final outcomes remain uncertain, these changes could affect national programs such as the National Grazing Lands Coalition or partnerships with organizations like The Nature Conservancy, potentially reducing technical and financial resources available to producers that were previously funded through these sources.

Trade & Tariffs Impacting Global Markets

Trade remains a critical factor shaping the agricultural economy. Recent months have seen new retaliatory tariffs imposed on U.S. agricultural exports by trading partners such as China. Some tariffs have reached up to 34% or more, directly affecting key commodities including soybeans, sorghum, beef, and poultry.

Currently, there is a 25% tariff on Mexican goods imported into the U.S. while Canadian goods have a 35% tariff rate. However these tariffs get complicated with the United States Mexico Canada Agreement (USMCA), as nearly 95% of Mexican exports and almost 100% of exports of Canada continue to enter into the U.S. duty and tariff free due to the agreement. This includes most agricultural imports such as grains, fertilizers, dairy inputs, and processed goods.

When looking at the long term, these tariffs have an expectation to significantly increase domestic value for feeder cattle and cull cattle, as the U.S. has recently moved into a net import status for beef. Despite the complications of other tariffs, this point should create at least a short-term strength in prices for cattle, if all other things remain equal.

On another level, tariff related issues are opening doors for U.S. products. For example, the sustainable scarcity of cattle and high domestic prices have kept U.S. beef competitive even as markets like Australia remain more expensive.

Despite trade tensions, beef prices and calf markets remain robust, supported by strong demand and diminished competition. Tariffs contribute to this dynamic by encouraging producers to retain herd and rebuild, aligning with present market conditions.

While tariffs also introduce challenges, such as volatility and global trade uncertainty, for many cattle producers, the immediate upside is clear: stronger market positioning, improved pricing and an environment that is favorable for domestic production.

Agricultural Economic Outlook

Despite policy and market challenges, USDA projects record-high net farm income for 2025, reaching an estimated $180 billion. While these numbers are encouraging, it’s important to keep them in perspective. Rising production costs, supply chain volatility, and funding uncertainties can quickly erode gains if operations aren’t built for resilience.

Record-high cattle prices are worth celebrating, but they can also signal increased risk and market volatility in the years ahead. For ranches looking to expand or rebuild, the cost of replacement heifers and bred cows could become a major financial consideration.

The passage of the Big Beautiful Bill reauthorizes important conservation programs that producers have relied on for decades. While many details are still emerging, this bill ensures CSP, EQIP, and RCPP funding will be available in future years, supporting critical conservation and infrastructure projects.

At the same time, USDA’s broader program reviews and staffing reductions may impact how quickly funds and technical assistance reach producers. Planning ahead, gathering clear information, and understanding your options can help you stay ahead of these shifts.