Helping Cotton Growers Navigate OBBBA Farm Bill Provisions
October 13, 2025 Across the Cotton Belt, the National Cotton Council (NCC), in collaboration with state and regional producer and ginner associations, recently met with growers and allied industry partners to walk through details of the recently passed Farm Bill provisions in the One Big Beautiful Bill Act. These sessions helped provide clarity on how the new legislation works with key programs and offered producers an opportunity to ask questions specific to their operations.
A key focus is the enhanced Seed Cotton Reference Price, increasing by 14% from $0.367 to $0.42/lb, beginning with the 2025 crop. Our analysis shows a $0.42 reference price would have triggered PLC payments in 32 of the last 35 crop years, averaging $140/acre.
For 2025, a simplified PLC/ARC election process means growers automatically receive the higher of ARC-CO or PLC payments, offering immediate flexibility. The NCC is actively working with USDA to clarify implications for growers who purchased STAX for 2025 and now wish to opt for PLC/ARC.
The legislation also includes a provision that will allow eligible farms the opportunity to add base acres to the farm if average plantings exceed existing base acres on the farm.
Additionally, crop insurance also sees critical improvements. Supplemental Coverage Option (SCO) enhancements feature coverage increases from 86% to 90% in 2027, and for 2026, growers can combine SCO and the Enhanced Coverage Option to achieve 90% or 95% coverage. Crucially, the premium subsidy for SCO is increased to 80% and can now be purchased on farms enrolled in PLC or ARC, providing a powerful, flexible tool for managing county-level revenue risk.
The Marketing Loan provisions are modernized to better reflect market realities. The loan rate for upland cotton increases to $0.55/lb (and ELS cotton to $1.00/lb) for the 2026 crop, with increased maximum storage credit rates. A significant change is AWP Flexibility, setting the marketing loan repayment rate for upland cotton to the lowest 30-day prevailing market price from the loan repayment date. The AWP calculation itself now uses the three lowest Far East quotes, rather than five, for more accurate global price reflection.
Another welcome development is the increase in ARC/PLC payment limits from $125,000 to $155,000, with future indexing to inflation. This adjustment, along with provisions allowing certain entities to be treated similarly to General Partnerships for payment limits, will provide greater producer support.
Beyond core farm programs, new provisions include vital improvements. The Economic Adjustment Assistance for Textile Mills program increases from $0.03/lb to $0.05/lb, and the Pima Trust Fund is restored to $16 million. New Trade Promotion Funding will double the MAP and FMD programs, bolstering U.S. cotton’s presence in international markets.
We encourage all producers to engage with their local FSA offices and crop insurance agents to fully understand how these changes will benefit their operations. For a comprehensive overview, including detailed examples and charts from our presentations, please scan the QR code below or visit Cotton.org.
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