What do we know?

Yeah, so we know that USDA came out and said that there's about 13.8 billion.

Now, that's gross.

That's before the 15% cutoff for base acres.

It's before the sequestration payment adjustment.

It's before the payment limits.

But what we know, and- and Farm Doc Daily came out with, uh, you know, from University of Illinois, with some details yesterday, and I- I think they're very close to mine.

Yeah

What misinformation do we need to be aware of?

Yeah, well, first, let's sort of just say what we do know.

We do know that President Trump came out with an executive order.

allowing farmers to use dyed diesel in their trucks on their highway usage.

However, it's not a waiver.

It's not elimination of the tax.

Right now, it's simply a deferral of the tax.

for every every time you even one gallon,

When you start thinking about 2026 crop, when does that decision need to be made?

It has to be made by November 11th.

I think that's my memory.

I'm pretty sure it's November 11th.

This is interesting.

This year, we have what's called ARC-IC, individual crop, where the farmer gets paid based on what they plant.

Remember, ARC County is just based on, hey, I have 1,000 acres of corn base.

Talk to me about the SDRP2 top-up payment.

What does that impact us then on sign-up times for ARC and PLC then?

Well, what we have to understand is compared to your 25 ARC PLC, which will be paid starting in about two weeks, beginning of October 1st, they'll start paying that out.

That was based on your old base acres.

So now on average across the country, you're going to have an extra 12% of base acres, about an extra 12%.

So your payment next year, if your payment per acre is exactly the same, you'd actually get 12% extra payments.

And that 2026 ARC and PLC signup just was announced yesterday.

So on September 16th, it's going through December 11th.

I wanted to give you a moment to speak to some of those because sometimes it's easy to forget what we passed in that legislation and how that's impacting this going forward.

sorry, yes.

Which is okay.

I mean, Labor Day screws is all up anyway.

I already think today's Wednesday, that's actually Thursday.

But, you know, the notice that came out essentially sort of reinforced some stuff that they'd done before.

It then provided guidance over on manure.

They now specifically state that swine manure and dairy manure is sort of that feedstock that goes into the renewable natural gas.

Let's also do a reminder of this deadline that's coming up for filing a new farm business structure with FSA in regards to some of these changes that were made on farm program payment limits.

There's an important deadline coming up.

Yeah, so there's a September 15th deadline for farmers that are making changes to their entity structure.

So if you're just simply a sole proprietor, don't worry about this.

But if you were a sole proprietor and you're bringing in another person into an entity like an LLC, then you have to get that done by September 15th.

You don't necessarily have to report it to the local office because they're buried with base acre updates and a lot of other stuff going on, SDRP stage two and all that stuff.

But you have to have it in place.

Also, if you're a C corporation, because remember, under the new rules, the C corporation is still stuck with one payment limit.

Now, Paul, go over the payment eligibility again so that everyone is clear on what might be eligible for multiple payments.

So is that like a mandatory base acre update? Is that what it is?

No, it's very much a voluntary one.

And remember, this is just an extra 30 million.

We have about 250 to 270 million base acres, depending on who's counting.

This 30 million extra is going to be allocated based on your planning history.

There is no...

If you don't want it, you don't have to have it.

What's this?

L- let's recap what you, what you found there, Paul.

Yeah, so let's go in and look at the ones where the MY price is now final.

So we have three crops that we have final prices.

That's wheat was final at 5.06.

Uh, I think it was, yeah, 5.06.

So that means under PLC you're gonna get $1.29 per bushel payment on wheat.

Uh, now you have to multiply that by 85%, so it's like $1.09 net, net per base acre.

You also talked about some guidance on the payment limits.

uh brother i i needed my glossary for some of this through entity actively engaged we got qualified pass-through entity i don't know if you want to start with some glossary time or or if you just want to dive right in but let's get started paul

i i think we'll go ahead and dive in because uh i'll cover most of that as we go through the slides here so uh you know if i did a glossary we would end up going over it all over again so let's go ahead and uh let's go to so so We have basically three changes that came out from this guidance, and this guidance was issued a couple weeks ago.

And under the old rules, if we were an LLC or an S corporation, whether you had one owner, five owners, 50 owners, you got one payment limit, and that was $125,000.

OVA, the One Big Beautiful Bill Act, went ahead and changed it.

Now we have, as you had mentioned, qualified pass-through entities, and that's an LLC, it's an S-Corp, it's anything that's treated as a partnership for federal income tax purposes will qualify now based on the number of owners.

Now, if the owners are not equal, that may end up resulting in less than a full.

So if you had four equal owners, you get four payment limits.

Let's go to

Well, Paul Neiffer tells us he gives USDA an A+ in implementing these rules.

We've needed this for the last 15 or 20 years.

There's been a couple senators, I would say, that really didn't wanna see this happen, and finally there was enough votes to overcome that resistance.

So the, in my opinion, this is long overdue.

And there's some adjustments on the adjusted gross income too, right?

Yep.

And finally, that...

I was worried because under, well, there's two or three things.

Let me do the easier one first.

Right now, if you're signing up for the additional payment, if your income is 75% or more from farming, you get that additional payment for SDRP.

But the problem is that equipment gains were only really considered to be income.

How do you rate the whole thing overall?

Okay, buddy, let's talk base acres.

Yeah, so we know that, uh, the One Big Beautiful Bill authorized up to 30 million new base acres.

These are new acres.

And starting Monday, so June 1st, on Monday, you will be able to log on to your account.

So again, most of you out there, hopefully you do have a login.gov account so you can log on and that will tell you what they project your new base acres will be.

So I want to emphasize this is a projection.

Likely, your final base acres are gonna be less than what's on that report.

Let's talk about the Section 1033 and that one-year deferral.