By Jonathan Coppess
October marks the beginning of the federal fiscal year, which is payment season for farm policy (USDA, October 7, 2026; Farm Policy News, October 19, 2026). Payments are made in October because Congress included a timing shift in farm programs (Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC)), requiring payments be made after October 1 (7 U.S.C. §9016(e) and §9017(f)). As such, the payments made in October 2026 are for the 2025 crop year but booked in fiscal year 2027. The point of this is to reduce the overall costs of farm program payments in the 10-year spending projections by the Congressional Budget Office (CBO). It is a budget gimmick; by shifting the payments to the next fiscal year, the CBO cost projections include only nine out of the 10 years in a score. It is one of many notable examples of the differences under budget policy for farm payments compared to conservation policy, as discussed in this article.
Background
It is in October, with the new fiscal year, that the Commodity Credit Corporation (CCC) is typically replenished. The CCC is the primary funding mechanism for all farm program payments and conservation, it has also been used in recent years to make some ad hoc payments to farmers. The CCC operates through direct borrowing authority on the U.S. Treasury, which Congress has limited to $30 billion. Payments and other obligations are booked as net realized losses and Congress, through appropriations, reimburses those losses which restores the borrowing authority. In effect, the CCC operates as a credit card that Congress must pay off to permit further borrowing or use (15 U.S.C. §714b; Stubbs, May 15, 2025).
As reported, the total amount of ARC/PLC payments is almost $14 billion and is the largest amount paid out by these programs since they were enacted in the 2014 Farm Bill (farmdoc daily, October 13, 2026). Payments are somewhat lower than earlier projections because market year average crop prices were higher than projected. Most notably, however, program payments have more-than doubled from CBO’s projected $6.5 billion prior to the Reconciliation Farm Bill in last year’s One Big Beautiful Bill (OB3) Act of 2025. In addition to ARC/PLC payments, the CCC also funds the Marketing Assistance Loans (MAL) that farmers can take out on harvested crops. In recent years, farmers have taken out an average of $6.5 billion in loans, most of which is repaid by farmers nine months later (Rosch, October 20, 2026). Between them, ARC/PLC and MAL likely consume over $20 billion (two-thirds) of the CCC borrowing authority.
The beginning of the fiscal year is also when FSA pays annual rental payments under the Conservation Reserve Program (CRP), reported to total $1.8 billion (Farm Policy News, October 19, 2026). The authorization for CRP, which was extended by Congress last year through the end of FY2026 (i.e., September 30, 2026), has technically expired. While this will not impact any existing contracts, it does prevent USDA from enrolling or reenrolling acres in the program until Congress reauthorizes it or extends the authorization. This is because CRP was not included in the Reconciliation Farm Bill last year and it remains in a uniquely uncertain situation among all farm and conservation programs.
Finally, October is also when the CCC transfers funds to the Natural Resource Conservation Service (NRCS). These funds are available throughout the fiscal year to obligate for the financial assistance to farmers who implement conservation, as well as technical assistance to farmers and some operating costs. These funds are obligated for contracts with farmers under the Conservation Stewardship Program (CSP), the Environmental Quality Incentives Program (EQIP), the Agriculture Conservation Easement Program (ACEP), the Regional Conservation Partnership Program (RCPP), or other program authorities. The total amount spent on conservation assistance by these programs depends on contracting actions by NRCS throughout the fiscal year (as well as prior fiscal years) and will not be known until well after FY2027 ends. In its February 2026 Baseline, CBO projected $4.7 billion for FY2027 for EQIP, CSP, ACEP and RCPP. Notably, this total was down from $6.8 billion projected for FY2027 in CBO’s 2025 Baseline, prior to the OB3 changes (CBO, “Baseline Projections for Selected Programs: USDA Mandatory Farm Programs”).
These programs could consume at least $26.5 billion of the $30 billion CCC borrowing authority. Among other things, this has implications for any ad hoc payments such as the $8 billion in assistance announced by President Trump on (Farm Policy News, October 20, 2026; October 21, 2026). Congress will need to replenish the account—pay off the credit card—if those new ad hoc payments are to be made.
Source : illinois.edu