Focus on Ag: USDA Announces $8 Billion Harvest Fuel Relief Program
Written by Kent Thiesse, Farm Management Analyst
Harvest Fuel Relief Program
On October 19, USDA announced the “Harvest Fuel Relief (HFR) Program”, designed to help offset set the negative economic impact on farmers that has resulted from rapidly increasing diesel costs. The HFR program will provide $8 billion in financial relief to crop producers by accessing funds available through the Federal Commodity Credit Corporation. Complete details regarding the HFR program, which will be administered through local USDA Farm Service Agency (FSA) offices, are expected to be announced in November. Average diesel fuel prices in the U.S. have topped $6.00 per gallon at many locations in the U.S. in recent weeks, and farmers are paying about $3.00 per gallon more for diesel fuel in the Fall of 2026 than they were a year ago.
The Harvest Fuel Relief Program payments are expected to be administered somewhat similarly to the Farmer Bridge Assistance (FBA) payments that farmers received earlier this year. USDA will calculate payment rates for all Title I farm program crops, based on Economic Research Service (ERS) average production costs and economic losses for each crop. There will likely not be any differentiation based on 2026 average yields or fuel price variation across the country. The HR payments for each farm will be based on the 2026 planted crop acres, and payment amounts will be automatically calculated by FSA. The Title I payment rates for each crop are expected to be announced in November. USDA will hold back some HFR funding for non-program crops that will be distributed at a later date.
The payment dates for the HFR program have not yet been announced; however, the payments are expected to be direct deposited into the farmer accounts. Farmers are hoping that the timing of the HFR payments is announced by early Novembers, as the uncertainty of the payment date could create financial planning challenges for some farm businesses. Most farmers do their year-end income tax planning after harvest is completed in late November and early December. Prudent tax planning is an important aspect of farm financial management, and includes managing year-end grain sales, making year-end payments, and paying prepaid expenses for the coming year. Unexpected income being deposited at the very end of the year could create some challenges, and could increase the income tax liability for farmers at a time when they are facing difficult financial situations.
There was no announcement of whether the HFR payments will be subject to the federal sequestration payment reduction of 5.7 percent. The recent Price Loss Coverage (PLC) and Ag Risk Coverage (ARC-CO) payments that farmers received were reduced by the 5.7 percent reduction; however, the Farmer Bridge Assistance (FBA) payments that farmers received earlier this year were not impacted by the sequestration deduction. If the sequestration reduction is applied, it would reduce the total HFR payments by approximately $456 million.
The HFR program is specifically designed to offset high diesel prices at the farm production level. The HFR program does not address the impact of higher fuel costs on transporting the grain to market, or the added costs on farm inputs that result from the increased diesel costs. At this point, the HFR program does not provide any financial relief for livestock producers, even though livestock production expenses are also negatively impacted by the much higher diesel costs. Livestock producers and farmers raising non-Title I crops can provide input on the impacts of higher diesel costs through a special USDA website at: HarvestFuel@usda.gov.
The Harvest Fuel Relief Program will provide some much-needed short-term financial relief for most crop producers in the U.S. The payments will add working capital funds to help make year-end operating loan principal and interest payments, provide added funds to make required term loan payments, and add funding to pay for 2027 crop input expenses. The HFR payments will also give farmers more flexibility to market their 2026 grain in storage, rather than needing to sell grain at very low prices to generate needed cash flow to cover required farm expenses. The HFR program does not address the continued longer-term challenges of high farm input expenses, tight crop margins, and poor farm profit levels.
2026 Farm Program Sign-Up Details
Now that the 2026 harvest season is winding down, crop farmers need to turn their attention to farm program sign-up for the 2026 crop year. The farm program sign-up dates for the 2026 crop year began on September 16 and will continue until December 11 at County Farm Service Agency (FSA) offices. Farm program sign-up for the 2027 crop year will begin on November 2, 2026 and will continue until March 15, 2027, which coincides with the 2027 crop insurance deadline for corn, soybeans, and other Spring crops. It is important to note that all producers will need to sign-up for the 2026 farm program, in order to be eligible for potential 2026 farm program payments, which would likely be paid in October, 2027. The 30 million crop base acres that were added earlier this year will be included for potential 2026 farm program payments.
For both the 2026 and 2027 farm programs, farmers will again need to choose between price-only Price Loss Coverage (PLC) program, and the Ag Risk Coverage (ARC-CO) program, which is based on the market-year average (MYA) price and county average yields. The ARC-IC program provides a third farm program choice, which is based on the same MYA price, but is based on farm-level yields; however, ARC-IC also has other provisions that are different from PLC and ARC-CO. Final 2026 county average yields and farm-level yields will likely impact final 2026 farm program choices in many instances.
Farmers can make a different choice between PLC and ARC-CO for each program crop. For example, they can select PLC for corn and wheat, and select ARC-CO for soybeans. The Farm program payments are based on the county that a farm unit is located in. Producers with farm units in multiple counties can also make a different farm program choice on the same crop in different counties. In some areas, there could be a big difference in final yield potential from county-to-county, which could bring this decision into play. The final 2026 county yields for the ARC-CO program will be based on the final Risk Management Agency (RMA) crop insurance average yields for 2026. The final county average RMA yields will not be announced until late-May of 2027.
The PLC reference prices for the 2026 farm program are $4.42 per bushel for corn, $10.71 per bushel for soybeans, and $6.35 per bushel for wheat. The 12-month market-year average (MYA) price needs to drop below that level in order to earn a PLC payment for a given crop for 2026. The marketing year for corn and soybeans began on September 1, 2026 and continues until August 31, 2027. The marketing year for wheat and other small grains extends from June 1, 2026 through May 31, 2027. As of October 1, 2026, USDA is estimating the 2026-27 MYA prices at $4.70 per bushel for corn, $12.00 per bushel for soybeans, and $6.30 per bushel for wheat. However, since October 1, commodity prices have declined considerably, especially for corn. The 2025-26 MYA prices ended at $4.16 per bushel for corn, $10.50 per bushel for soybeans, and $5.06 per bushel for wheat.
Some analysts are advising producers to automatically select ARC-CO as a farm program choice rather than PLC for corn and soybeans, due to the current higher MYA price projections; however, final 2026 county average yields can also have a big impact on that decision. In addition, producers with very low farm-level yields could see favorable results by enrolling in the ARC-IC program for 2026. Farmers are encouraged to closely analyze the likely final yield results on their farm, as well as in counties where their farm units are located, before making their final 2026 farm program choices.
More information on the 2026 farm program sign-up is available from local FSA offices or by going to the USDA FSA website at: www.fsa.usda.gov/arc-plc. The University of Illinois FarmDoc website has a very good 2026 farm program calculator to compare PLC to ARC-CO payment potential in most counties in every State in the U.S. This FarmDoc calculator, which also allows for analysis of the ARC-IC program option, is available at: www.farmdoc.illinois.edu.
