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Pre-Harvest Ag Finance Insights: Supplemental Disaster Relief & OBBB’s Tax Impacts

By Jeffrey Bowman, CPA, MBA, MST

July 29, 2025

As harvest time draws near, we’re bringing you the latest updates related to federal payments, disaster relief, key tax law changes, and relief opportunities that could make a big difference for your operation—this season and into the future.

$16 Billion in New Disaster Relief: The Supplemental Disaster Relief Program (SDRP)

On July 9, 2025, the USDA rolled out major new funding for agricultural producers through the Supplemental Disaster Relief Program (SDRP). This federal program was created to help offset crop losses suffered in 2023 and 2024 due to a wide range of natural disasters—including drought, wildfires, freeze, excessive heat, and more.

This relief is particularly significant for almond growers and other specialty crop producers in California’s Central Valley, who have endured several years of severe drought and related challenges.

Key SDRP details:

  • Who Qualifies: Eligible losses must be the result of natural disasters such as drought (counties must have experienced at least “D2” severe drought for eight consecutive weeks), wildfire, hurricanes, floods, freeze, excessive heat, smoke exposure, and more.
  • How to Apply: Phase one is open now for those who received crop insurance or Noninsured Crop Disaster Assistance Program (NAP) indemnity payments in 2023 or 2024. Prefilled applications were mailed to many eligible producers on July 9, and in-person signups began July 10 at FSA county offices.
  • Payment Structure:
    • SDRP Stage One payments are based on the level of your crop insurance or NAP coverage.
    • Net indemnities (insurance or NAP payments, minus fees and premiums) are subtracted from the SDRP payment amount.
    • Payments are capped at 90% of loss with a 35% payment factor applied.
    • If additional funds remain, a second payment may be issued.
  • Ongoing Requirements: All recipients must purchase federal crop insurance or NAP coverage at a minimum 60% coverage level for the next two crop years, or risk having to refund the SDRP payment plus interest.

USDA Marketing Assistance for Specialty Crops (MASC): Second Payment Round

Growers who applied for the USDA “Marketing Assistance for Specialty Crops” (MASC) program with the Farm Service Agency (FSA) back in January should have received their second round of payments by now. The Marketing Assistance for Specialty Crops (MASC) program was designed to provide financial assistance to US specialty crop producers to help offset higher marketing costs related to the perishability, specialized handling, and packaging of crops such as fruits, vegetables, nuts, nursery crops, and certain herbs.

If you are still awaiting payment or need help confirming your eligibility, please reach out so we can assist you, or you may directly reach out to your local FSA county office.

The “One Big Beautiful Bill” (OBBB) and Its Tax Impacts on Ag

Last, but not least, the July passage and signing into law of the “One Big Beautiful Bill” brings a wide range of changes for ag employers and producers. Here are a few points to consider:

  • Overtime Deduction: There are new rules for overtime deductions, but not all ag workers are covered. Review carefully to see how your operation might be affected.
  • Bonus Depreciation: Changes impact which property qualifies for bonus depreciation and how expenses are treated.
  • Farmland Sales: Certain farmland sales now qualify for a four-year tax installment plan, providing new flexibility.
  • Effective Dates: Some provisions begin in 2025; others won’t take effect until 2026 or later. Advance planning is key to staying ahead.

For a deeper dive into OBBB provisions, read our latest article by Tax Principal Manoj Bains, EA: Turning the Page: Understanding the OBBBA’s New Tax Landscape.

Get in Touch

Whether it’s disaster relief paperwork, tax strategies, or new program eligibility, the Grimbleby Coleman Ag Team is here for you. If you’ve received FSA communications, have questions, or want to ensure your planning is on track, don’t hesitate to reach out to our team. We’re ready to help you make the most of these new updates and opportunities!