By Tom Hance*
As of this writing, Congress has entered into its August recess and will be out of session until the House returns the week of September 7th and the Senate the following week. With mid-term elections in November, Congress is scheduled to be in session for four weeks before adjourning for the final campaign season stretch run.
Government Funding & Operations
Prior to the August recess, action was taken on a couple of legislative items of direct interest to agriculture. The House and Senate passed different versions of a Continuing Resolution (CR) to extend government funding and operations past the September 30th end of the federal fiscal year and beyond the November elections. In September, the two chambers will need to agree on a CR to send to the President’s desk. Assuming that is accomplished, Congress will have a few weeks after the elections to reach agreement on the FY2027 appropriations bills or pass another CR. History suggests another CR will be needed at least to the end of the calendar year and possibly into 2027 and Congress’ new session.
Reconciliation 3.0 & Economic Assistance for Ag
Another legislative item of great interest to agricultural producers is the potential Budget Reconciliation 3.0 package, which could include additional economic assistance for growers.
In late June, President Trump submitted an $88 billion supplemental funding request to Congress that included $11.1 billion for agriculture assistance. Lacking bipartisan support to approve the supplemental funding request, Republicans have turned to the partisan Budget Reconciliation process. In July, House Republicans passed a Budget Resolution for a Reconciliation 3.0 bill that included $12 billion for farm assistance. The overall House Budget Resolution totaled $95 billion, with $73 billion for military and defense, $12 billion for farm assistance, and $10 billion for election and voter ID-related costs. The Senate was unable to pass a Budget Resolution prior to adjourning for August recess, but it will be a top priority when they return in September.
There are a number of challenges and hurdles for the Reconciliation 3.0 to get enacted, including potential demands from some Republican members that the funding, particularly the farm assistance portion, be offset. President Trump is also pushing strongly for provisions related to election and voter ID-related issues that are contentious and thus far have not found sufficient support among Republican senators.
If the Reconciliation package moves forward with additional economic assistance for agriculture, it is not yet known how that assistance will be delivered. Congress would determine how much of the total funding would be provided for row crops and how much would be provided for specialty crops and other sectors. It is possible that Congress will have the row crop funds distributed in the same manner and payment rates as the Farmer Bridge Assistance (FBA), but it is also possible that the payment structure and rates could be different.
Farm Bill Remainder
Congress also continues to work to finish the remainder of the farm bill that was not addressed in the Reconciliation bill enacted in 2025. Senate Ag Committee Chairman John Boozman (R-AR) released his updated draft bill and held a committee mark-up on August 6th. However, Chairman Boozman was unable to advance the bill out of committee due to the absence of Republican Mitch McConnell and demands by Democrats that the bill delay the implementation of state cost-share requirements for the Supplemental Nutrition Assistance Program (SNAP) that were enacted in 2025. Chairman Boozman indicated the committee will revisit the bill in September. It is possible that Republicans will be able to move the bill out of committee in September if Sen. McConnell returns from his medical absence. However, bipartisan support will eventually be needed to get a final bill through the full Senate given the 60-vote filibuster threshold.
Notably for sunflower, Chairman Boozman’s draft bill includes the authorization of the new Sunflower Breeding Initiative under the “High Priority Research and Extension initiatives” of the Research Title. The Sunflower Breeding Initiative is being developed by the National Sunflower Association and has been a priority for authorization in the farm bill and funding in the annual Agriculture Appropriations bill.
Other items of interest in Chairman Boozman’s farm bill include:
• The measure more than doubles funding for agricultural trade promotion and facilitation programs, using funds from the 2025 Reconciliation bill. Market Access Program funding rises from $200 million to $421 million for fiscal 2027, and then to $437 million for fiscal years 2028 through 2031. The Foreign Market Development Program funding jumps from $34.5 million to $73.5 million for fiscal year 2027, and then to $75.5 million for each of fiscal years 2028 through 2031.
• The bill would reauthorize the Conservation Reserve Program through 2031, maintaining the current 27-million acre cap, while increasing CRP payment limitations to $125,000.
• The bill's credit title modernizes USDA loan programs to help lending authorities keep pace with rising production costs. The legislation would significantly increase Farm Service Agency loan limits while indexing those caps to inflation going forward.
• Creates a USDA crop input economist tasked with monitoring fertilizer and other input markets and improving market transparency.
The House of Representatives passed their farm bill (H.R. 7567) in late April by a vote of 224-200. The House-passed bill and Chairman Boozman’s draft bill are very similar.
Trade, Global Supply Chain & Input Costs
In addition to the legislative issues, there are a number of other federal policy factors impacting markets and the U.S. farm economy. Input costs remain a top factor, and concern for farmers and the ongoing conflict with Iran and trade and global supply chain issues continue to be a source of uncertainty.
On the trade policy front, in July the U.S. declined to renew the U.S.-Mexico-Canada (USMCA) trade agreement in its current form for a new 16-year term. The Office of the U.S. Trade Representative cited trade deficits as a key reason for declining the renewal. Negotiations will occur among the three countries on a potential new agreement. The U.S. met with Mexico in late July for a third round of negotiations and plans for a fourth round in September.
On July 20th, the White House signed Section 338 trade actions that will apply a 50% tariff to select Canadian alcohol, dairy and automobile imports. These tariffs apply even to products that are compliant under the USMCA and will take effect August 19.
The U.S.-EU Agreement, which adjusts customs duties and opens tariff rate quotas (TRQs) for certain U.S. goods, took effect July 1st. U.S crude sunflower-seed or safflower oil for technical or industrial uses was listed in Annex 1 as an item subject to zero tariffs.
Mid-Term Elections Impact
How will these issues impact the mid-term elections and what impact will the election outcomes have on policy issues going forward? At this stage you can find election projections to support a full range of outcomes — from Democrats winning control of the House and Senate to the Republicans maintaining control of both or split control.
The significance of Democrats winning a majority in either the House or the Senate would be to remove the Reconciliation process as an option for President Trump and Republicans to enact some things on strictly party line votes in 2027. It is also expected that Democrats would use their House and/or Senate majority to conduct investigations and rigorous oversight of Trump Administration actions and policies. Bipartisan agreements would be needed in 2027 to pass any legislation, including appropriations, economic assistance for agriculture, and the remainder of the farm bill if it doesn’t get done in 2026.
If control of the House or Senate does flip, President Trump and Republicans will have additional motivation to pass a Reconciliation bill before the end of the year, which could make for an eventful post-election lame-duck session of Congress.
* Tom Hance is with Gordley Associates, Washington representatives for the National Sunflower Association.