By Natalie Graff and Henry Nelson
Program decisions for the 2026 crop year are fast approaching. This article considers the risk management options for cotton producers in light of current price projections and relevant changes in the One Big Beautiful Bill Act (OBBBA) signed into law on July 4, 2025. Given the commodity program and crop insurance changes in OBBBA, producers likely will want to re-evaluate their Title I program and crop insurance decisions for 2026 and beyond.
OBBBA strengthened the Title I programs Price Loss Coverage (PLC) and Agriculture Risk Coverage (ARC) by raising reference prices and increasing the coverage ARC provides, along with other changes. The Stacked Income Protection Plan (STAX) is an area-wide crop insurance policy exclusively for upland cotton producers, and cotton acres with a STAX policy are not eligible to sign up for ARC or PLC on the upland cotton base acres. In light of the recent improvements to ARC and PLC (and the prohibition on combining coverage with STAX), cotton producers should evaluate potential ARC/PLC payments before making their decision about STAX.
The Supplemental Coverage Option (SCO) is another area-wide supplemental crop insurance policy available for cotton and other major commodities. OBBBA improved SCO in two significant ways.
1) The premium subsidy increased from 65% to 80%, now equal to the STAX premium subsidy.
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