On July 4th, 2025, President Trump signed into law “An Act to provide for reconciliation
pursuant to title II of H. Con. Res. 14.“, colloquially referred to as The One, Big, Beautiful Bill (OBBB).

There are several provisions of OBBBA that are relevant for livestock insurance.

Beginning/Veteran Farmer and Rancher Benefit was extended from 5 to 10 years. BFR/VFR additional subsidy was previously set to 10%. OBBB increases the subsidy from 10% to 15% for the first two years the farmer has the BFR/VFR status; from 10% to 13% for the third year, and from 10% to 11% for the fourth year in the BFR/VFR status. Subsidy for years 5-10 remains at 10%.

In crop year 2025, BFR/VFR subsidy applied to 108 out 15,092 (0.7%) Dairy Revenue Protection endorsements, and to 1.6% of Livestock Risk Protection endorsements. Total additional BFR/VFR subsidy for DRP and LRP combined in RY2025 was $540,000, a tiny fraction of total premium that exceeds $1.6 billion for RY2025.

It is not yet clear whether BFR/VFR changes will be implemented for livestock programs prior to crop year 2027.

Supplemental Coverage Option (SCO) Subsidy was increased from 65% to 80%, and the coverage level was increased from 86% to 90%. In 2024, the FCIC Board approved increase of the subsidy for Enhanced Coverage Option (ECO) from 44% to 65% citing SCO as the precedent. So one may ask whether this increase in SCO subsidy can be used as a precedent to justify increasing DRP, LRP, or LGM subsidies? My best guess answer is “not likely”. Both SCO and ECO are supplemental plans, supplementing individual yield or revenue coverage. DRP is a standalone coverage plan, in that sense more similar to Area Risk Protection Insurance (ARPI) – a crop insurance plan seldom purchased by farmers, and with subsidies matching the current DRP subsidy rates.

Program Compliance and Integrity. OBBB increases the budget for “data mining and data warehousing and other available information technologies to administer and enforce” program compliance and integrity, from $4,000,000 to $6,000,000 per year. Starting with RY2026, livestock insurance programs prohibit subsidy capture. Data mining approach could be utilized by RMA to identify policies where endorsement purchase patterns suggest increased likelihood of subsidy capture.

Poultry Insurance Pilot Program. OBBB states:

(j) POULTRY INSURANCE PILOT PROGRAM.—

(1) IN GENERAL.—Notwithstanding subsection (a)(2), the Corporation shall establish a pilot program under which contract poultry growers, including growers of broilers and laying hens, may elect to receive index-based insurance from extreme weather-related risk resulting in increased utility costs (including costs of natural gas, propane, electricity, water, and other appropriate costs, as determined by the Corporation) associated with poultry production.

(2) STAKEHOLDER ENGAGEMENT.—The Corporation shall engage with poultry industry stakeholders in establishing the pilot program under paragraph (1).

(3) LOCATION.—The pilot program established under paragraph (1) shall be conducted in a sufficient number of counties to provide a comprehensive evaluation of the feasibility, effectiveness, and demand among producers in the top poultry producing States, as determined by the Corporation.

(4) APPROVAL OF POLICY OR PLAN.—Notwithstanding section 508(l), the Board shall approve a policy or plan of insurance based on the pilot program under paragraph (1)—

(A) in accordance with section 508(h); and

(B) not later than 2 years after the date of enactment of this subsection.’’

Insurance programs currently in existence for other livestock producers focus on price (DRP, LRP) or income-over-feed-cost margin (LGM) risk. Unlike swine, beef or dairy producers who typically own the animals they manage, poultry growers grow chicks owned by the processor under a contract that provides them with a base pay plus incentives for more efficient production, thus removing both the input cost and the product price risk. For that reason, poultry insurance pilot program mandated by OBBB would focus on risk to non-feed costs of poultry business due to weather.