USDA rule cuts drought trigger for livestock forage aid to four weeks and rewrites cotton loan repayment
A final rule published July 9 puts the 2025 reconciliation law's disaster, marketing loan and sugar changes into regulation. USDA puts the cost at $927 million a year, with $343 million of it from the forage program alone.
USDA’s Commodity Credit Corporation published a final rule on July 9 that cuts the drought trigger for the Livestock Forage Disaster Program (LFP) from eight consecutive weeks to four, raises payments for tree growers who lose orchards, and changes how upland cotton marketing loans are repaid. USDA estimates the package adds $927 million a year in outlays[1]. The rule took effect the day it ran[1].
The details
The rule, Docket FSA-2026-0067, writes the disaster, marketing loan and sugar provisions of the 2025 reconciliation law (the One Big Beautiful Bill Act, Pub. L. 119-21) into 7 CFR parts 1412, 1416, 1421, 1427, 1430, 1434 and 1435[1]. It is exempt from notice and comment under 7 U.S.C. 9091(c)(2), so there was no proposed rule and there is no comment deadline[1].
The four disaster programs it touches are not new. The Emergency Assistance for Livestock, Honeybees, and Farm-Raised Fish Program (ELAP), LFP, the Livestock Indemnity Program (LIP) and the Tree Assistance Program (TAP) were made permanent by section 1501 of the Agricultural Act of 2014 (Pub. L. 113-79), codified at 7 U.S.C. 9081. Section 10401 of the reconciliation law, signed July 4, 2025, rewrote parts of each, and this rule is the regulatory follow-through[1].
Livestock Forage Disaster Program. A producer now becomes eligible for a one-month payment after four consecutive weeks of severe drought (D2) on the U.S. Drought Monitor. The old requirement was eight. A two-month payment opens if D2 conditions persist for 7 of 8 consecutive weeks during the normal grazing period. Other drought intensities, durations and payment months are unchanged, and the new rules apply to program year 2026 and later[1, 3, 4]. Of the $927 million, USDA attributes $343 million a year to this change. The other disaster programs together add $39 million[1].
Livestock Indemnity Program. Payments now cover unborn livestock when an adult female dies in excess of normal mortality, retroactive to losses on or after January 1, 2024. The payment is at most 85 percent of the rate for the lowest weight class of that kind of animal, multiplied by a statutory “birthing factor”[1, 3]. Predation losses, which include wolves and avian predators, are paid at 100 percent of market value instead of 75 percent, starting with program year 2026[1].
The law also ties LIP’s market value to “the day before the date of death.” USDA says daily prices do not exist for most livestock classes, so national rates will still come from the prior year’s National Agricultural Statistics Service or Agricultural Marketing Service data. Starting in 2026, the CCC-852 form splits the notice of loss from the application for payment, and the application lets a producer document an alternative market price specific to the operation[1].
For 2024 and 2025, USDA says about 4,400 approved LIP applications may need review. Because 86 percent of those applications were for beef cattle losses and 52 percent of loss events fell in January through March, the rule presumes every approved adult female death in a category where FSA already has the counts was a gestating animal. Those producers get the unborn-loss payment automatically and do not need to act[1, 3]. About 100 applications for deer, elk, horses and llamas, plus swine, reported losses without separating females, and those producers have to revise their forms by a deadline FSA has not yet set. The payment for those categories is 40 percent of the rate; newly identified sows are paid at 85 percent of the suckling or nursery pig rate[1]. FSA will not ask either group for breeding records. An application not revised by the deadline stays as it is, and the original 2024 and 2025 filing deadlines are not reopened[1].
Emergency Assistance for Livestock, Honeybees, and Farm-Raised Fish. The rule adds freshwater fish farms’ bird depredation losses, at $600 per eligible acre for 2026, paid on 85 percent of the acres a producer has in production[1]. That works out to $510 per acre in production. Claimants need an active U.S. Fish and Wildlife depredation permit that lists cormorant, American white pelican, heron or great egret, and a notice of loss by March 1 of the following program year. Crawfish are excluded[1]. Normal mortality for honeybee colonies is fixed at 15 percent, and livestock feed payments are limited to 150 grazing days a year[1, 3]. Hauling claims get a tighter definition: a “truckload” means a motorized land vehicle, one trip, with mileage shown separately from the price of the feed, and parcel-service fees from carriers such as UPS do not count[1].
Tree Assistance Program. The old threshold required a 15 percent loss above normal mortality before any payment. Now any loss above normal mortality qualifies. The rule’s own example is a 1,000-tree citrus stand with 3 percent normal mortality that loses 200 trees. Under the old rule the grower needed to lose more than 180 trees to qualify and was reimbursed for 164. Under the new rule, losing more than 30 trees qualifies, and 194 trees are reimbursable. Reimbursement for pruning, removal and site preparation rises from 50 to 65 percent, and beginning and veteran farmers stay at 75 percent. The changes cover 2026 losses that happened before the rule was published[1].
What changes for grain, cotton and cattle operations
Corn, soybeans and wheat. The rule raises marketing assistance loan rates and loan deficiency payment rates for all eligible commodities for the 2026 through 2031 crop years, as the statute specifies. That list runs from wheat, feed grains and oilseeds to peanuts, pulse crops, rice, wool and mohair, and the loans typically mature within 9 months[1]. USDA’s April 8 announcement put the 2026 national rates at $2.42 per bushel for corn and grain sorghum, $3.72 for wheat, $2.75 for barley, $2.20 for oats and $6.82 for soybeans. Loans on 2026 wheat and barley are available through March 31, 2027, and on corn, sorghum and soybeans through May 31, 2027[2].
Cotton. Four changes apply. First, the upland price used to set the repayment rate, the “Far East price,” now averages the three lowest-priced quotes instead of the five lowest, a change applied retroactively to July 4, 2025[1]. Second, if USDA announces a lower adjusted world price in the 30 days after a producer repays a loan, FSA refunds the difference between the lowest price in that window and the price on the repayment date. A producer who took a loan deficiency payment gets an additional payment on the same basis, but only for a payment already approved[1]. Third, extra-long staple (ELS) cotton gets its own world price and repayment rate for the first time; until now it was redeemed at the loan rate plus interest. ELS loans can also be redeemed through commodity certificate exchanges, and the rule says gains from those are not subject to payment limits or the adjusted gross income test[1]. Fourth, storage credits are capped at $4.90 for California and Arizona and $3.00 elsewhere for the 2026 crop, and the 10 percent reduction in the old cap is gone. The previous caps dated to 2006[1]. A producer who takes a loan deficiency payment instead of a loan gives up those storage credits[1].
Cattle, sheep and goats. The unborn-loss payment is aimed at breeding herds. USDA’s own loss data shows when those losses land: 52 percent of eligible 2024 and 2025 loss events were in January, February and March, which it says lines up with beef cow gestation[1].
Orchards and nurseries. Besides the lower TAP threshold, growers get more time to replant. The window to complete practices after an application is approved goes from 12 months to 24, and CCC can stretch it to 36 months when delays are beyond the grower’s control, such as backordered trees[1].
Sugar and honey. The rule extends the Sugar Program from crop year 2025 through 2031 and raises the raw cane and refined beet sugar loan rates. Honey loans run through 2031 at a higher rate. The first reassignment of beet sugar marketing allocations must now be published no later than 30 days after each January’s World Supply and Demand Estimates report[1]. The rule also states that 2026 is the last crop year for the Feedstock Flexibility Program, which lets USDA dispose of surplus sugar; Pub. L. 119-37, the stopgap appropriations act for fiscal 2026, had carried it through that crop year[1].
On the Hill
There is no vote ahead on the rule. Congress set the numbers in the reconciliation law, and the rule is USDA’s regulatory catch-up with them[1]. The Office of Information and Regulatory Affairs treated it as economically significant and found that it meets the criteria at 5 U.S.C. 804(2) of the Congressional Review Act, which would ordinarily delay a rule 60 days. USDA used a separate provision, 7 U.S.C. 9091(c)(3), to make it effective at once[1].
The rule also fixes two errors in earlier work. The January 12, 2026 rule on Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) left out how “historically irrigated percentage” is calculated and misdated the reference-price paragraph, and the Dairy Margin Coverage section had a wrong cross-reference[1].
When are the LIP and bird-depredation deadlines?
FSA still has to tell LIP applicants from 2024 and 2025 what the revision deadline is. Producers claiming bird depredation losses for 2026 have until March 1, 2027 to file, and 2026 LIP claims are due the same day. Marketing loans on 2026 wheat close March 31, 2027, and on corn and soybeans May 31, 2027[1, 2]. Cotton’s adjusted world price is announced each Thursday at 4 p.m. Eastern, and the new 30-day refund clock starts from each repayment[1].