What the One Big Beautiful Bill Means for Agriculture Companies

The One Big Beautiful Bill Act of 2025 (OBBBA) provides a sweeping package for agriculture companies that reshapes tax planning, insurance coverage, and even how farms prepare for generational transitions.

For many farm businesses, increased benefits and tax code changes within OBBBA include several provisions designed to reduce tax burdens, support investment, and make it easier for farms to transfer ownership across generations.

For example, OBBBA expanded benefits to increase agricultural subsidy payments by $65.5 billion over the next 10 years, which is the largest investment in farm programs since 2002.

The Act restores 100% bonus depreciation, allowing farms to immediately deduct the full cost of equipment, machinery, and qualifying vehicles placed into service after January 19, 2025. For example, a mid-sized grain operation that buys a $500,000 combine can expense the entire purchase when it’s placed into service, rather than depreciating the equipment over several years.  

These provisions improve cash flow and lower taxable income, freeing up capital for additional investments in technology, land, or labor.

The OBBBA also brought the desired repeal of the 2017 Tax Cuts and Jobs Act (TCJA) requirement to capitalize and amortize domestic research and experimental (R&E) expenditures, which enables the immediate expensing of domestic R&E expenditures.

Often associated with technology and advanced manufacturing companies, the R&D credit can also provide compelling benefits for agribusinesses that invest in innovation and experimentation. For example, agribusiness investments that may qualify include testing new seed varieties for improved performance, developing sustainable farming methods, experimenting with feeding techniques to enhance livestock health or growth, or similar qualifying activities.

The bill also raises the federal estate tax exclusion to $15 million per person in 2026, indexed for inflation. For family farms, this means significantly more wealth can pass to heirs without triggering estate taxes. A multi-generation dairy farm valued at $20 million, for instance, could transfer ownership between parents and children with far less concern about potential liquidation to cover estate tax bills.

This change provides more stability in estate planning and encourages continuity in family-owned agriculture businesses.

Under a new tax rule beginning January 1, 2026, under IRC Section 1062, sellers of qualified farmland—used for substantially all of the 10 years prior to sale and sold to a buyer who will farm it for the following 10 years—may elect to spread capital gains taxes over four years if they receive a lump sum payment at sale.

Many agriculture companies operate as pass-through entities such as S corporations or LLCs. OBBBA clarifies that each active owner in these structures can qualify for individual payment limits under commodity programs, similar to the eligibility provisions for partnerships. This means two siblings running an LLC together, for instance, can each claim their own program benefits, instead of being forced to split a single cap.

Additionally, the overall payment limitation for commodity programs increases from $125,000 to $155,000 (with automatic inflation adjustments). In the example cited above,  instead of the total payment limit being $155,000 for the LLC, the members can receive up to $310,000 total (or $155,000 for each sibling member). This change provides more room for mid-sized and larger operations to access meaningful program support.

OBBBA also makes significant changes to farm support programs that help stabilize revenue when markets or yields take a downturn.

The Agricultural Risk Coverage (ARC) program’s revenue guarantee, for instance, rises from 86% to 90% of benchmark revenue, providing a stronger backstop if crop prices or yields fall below expectations.

Similarly, the county-level ARC cap increases from 10% to 12%, which could lead to larger payments in years of steep losses.

For the 2025 crop year, producers automatically receive the higher of ARC or Price Loss Coverage (PLC) payments, without needing to make an election. This gives farmers flexibility without forcing them to predict which program will pay better in advance.

Beginning in 2026, producers will need to elect their preferred program on annual basis once again, but they now have until 2031 to weigh those choices. New provisions allow for more flexible base acreage updates and expand eligibility for specialty crops. 

Crop insurance also gets a boost. Farmers who elect ARC will still be eligible for Supplemental Coverage Option (SCO) insurance, a departure from past restrictions. This makes it easier to layer programs for more robust risk protection.

Coverage levels remain high, with individual policies topping out at 85% and area policies at 95%, but OBBBA also adds new aggregated coverage tiers, giving producers more options to tailor protection to their operations.

OBBBA reduces federal support for solar and wind projects under the Rural Energy for America Program (REAP), while technologies like geothermal and biomass may retain longer-term incentives. REAP grants remain available but may be more competitive with stricter domestic content requirements. Guaranteed loans continue to be offered. Contact your local USDA office for the latest eligibility and funding details.

OBBBA also extends and expands programs designed to protect livestock producers from losses. Predation losses are now reimbursed at 100% of market value, up from 75%. The Act also creates coverage for unborn livestock, with payments tied to expected weight and type.

For larger livestock companies, these changes may influence insurance purchasing decisions. For smaller family farms, they provide a stronger buffer against unforeseen shocks.

With so many moving pieces, agriculture companies should evaluate four areas:

Due to significant changes in the tax law, the IRS may postpone the start of the upcoming filing season. To help your tax preparer navigate the new rules effectively, qualifying farmers who expect to owe tax for the 2025 tax year may benefit from making an estimated tax payment by January 15. This approach can offer additional time and flexibility for accurate return preparation and ensure compliance, rather than rushing to file and pay by the March 1 deadline.

Taken together, these tax and ownership provisions are designed to encourage reinvestment, strengthen family succession planning, and provide fairer access to program benefits.

With expanded tax relief, stronger safety nets, improved succession planning, and broader insurance options, OBBBA provides tools to help agriculture companies weather uncertainty and invest in the future.

To understand the provisions and explore the associated planning opportunities, contact us.