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The following is from the National Milk Producers Federation.
The “One Big Beautiful Bill Act,” signed into law by President Trump on July 4, includes a range of provisions with significant impacts on the dairy industry.
Tax Provisions
The new law makes permanent the Section 199A tax deduction, which allows certain pass-through agricultural entities, including dairy cooperatives, to deduct up to 20 percent of qualified business income. The deduction, for which NMPF has long advocated, was originally established in the 2017 Tax Cuts and Jobs Act to mirror the benefits of the now-repealed Section 199 and has since become a critical tool for reinvestment in equipment, labor, land and sustainable practices. Cooperatives can choose to reinvest this benefit or pass it on to member-owners.
The legislation also expands the estate and gift tax exemption, increasing it from the current inflation-adjusted $5 million to $15 million per individual and $30 million per couple beginning in 2026. These changes will aid family farms in long-term estate and succession planning.
The law also makes permanent the 100% bonus depreciation that allows farmers to write off the full cost of qualifying equipment and infrastructure investments. The legislation increases the limits for Section 179 expenses, doubling the maximum deduction and raising the phase-out threshold, which will give farmers greater flexibility in managing capital expenses.
Dairy Margin Coverage
The bill extends USDA’s Dairy Margin Coverage (DMC) program through 2031, continuing the 25% discount option for producers who commit to multi-year enrollment. The DMC provision includes an NMPF-supported update to the production history calculation that allows producers to use their highest milk production year from 2021, 2022 or 2023. It also raises the Tier 1 coverage threshold from five million to six million pounds of production history.
To read the National Milk Producers Federation’s full analysis of the One, Big Beautiful Bill, CLICK HERE.
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