TOPEKA, KAN. (RFD-TV) — USDA’s $8 billion Harvest Fuel Relief program is intended to help farmers manage higher production costs, but questions remain about how payments will be calculated and whether assistance will reach the producers facing the greatest financial pressure.
Roger McEowen with Washburn University School of Law joined Market Day Report to examine the program’s payment formula, potential disadvantages for cow-calf ranchers, and the legal authority behind the federal assistance.
Payment Formula Raises Questions About Fairness
In his interview with RFD-TV, McEowen said one of his biggest concerns is whether the program’s formula will accurately reflect the financial challenges individual producers face.
USDA plans to use a uniform formula based on Farm Service Agency reported planted acres, Economic Research Service cost-of-production estimates, and USDA yield and price estimates to calculate a portion of modeled losses during the 2026 crop year. Commodity-specific payment rates for Title I crops are expected in November.
McEowen said relying heavily on historical production figures may not reflect which farmers are experiencing the greatest financial stress today.
He said transparency will be important in determining whether the $8 billion reaches producers who need the assistance most.
Cow-Calf Ranchers Could Face a Disadvantage
One concern involves how the proposed payment formula accounts for livestock operations, particularly cow-calf producers.
McEowen said ranchers face many of the same cost pressures as crop farmers, including higher fuel, feed, fertilizer, and transportation expenses. However, their production histories may not fit the formula as it is currently structured.
That could leave some cattle producers at a disadvantage, despite facing significant increases in operating costs.
He said the details of USDA’s payment methodology will be important in determining how livestock operations are considered.
Questions About USDA’s Legal Authority
The Harvest Fuel Relief program is being funded through the Commodity Credit Corporation (CCC) Charter Act, which USDA says authorizes the $8 billion in payments.
McEowen said USDA has considerable authority under the act, but that discretion is not unlimited.
The department must demonstrate that the program fits within the purposes Congress authorized under the law.
“Having money available doesn’t mean USDA has an unlimited checkbook,” McEowen said.
He said the department also has an obligation to distribute taxpayer-funded assistance fairly and within the authority provided by Congress.
Repeated Emergency Payments Raise Concerns
McEowen said repeated rounds of federal farm assistance can create expectations that the government will step in whenever farm margins become tight.
While producers would generally prefer to earn income through the marketplace rather than rely on federal payments, he said recurring emergency assistance can influence production and investment decisions and shift more financial risk to taxpayers.
“Farm policy should provide a safety net, not eliminate the risks inherent in agriculture,” McEowen said.
He said a stronger long-term approach would emphasize Farm Bill programs, expanded domestic and export markets, affordable energy and fewer unnecessary regulatory burdens.
What Producers Should Do Now
McEowen said farmers and ranchers should document their expenses, review USDA eligibility requirements and talk with their lenders and tax advisers about cash flow and financing.
He noted that conversations with CPAs across the country suggest net cash farm income could be higher for many producers this year, even as expenses remain elevated.
He cautioned producers against making production or investment decisions based on the assumption that additional federal payments will be available.
“Don’t bank on that,” McEowen said.
LEARN MORE: Firm to Farm by Roger McEowen
