U.S. %Farmers and agriculture companies are cheering the passage of U.S. President Donald Trump’s spending legislation, known in Washington, D.C. as the “one big, beautiful bill.”
Farmers in rural heartland states such as Iowa and Indiana praise the legislation for delivering tax relief, enhanced death tax exemptions, extension of the 45Z biofuel tax credit, and strengthened crop insurance at a time when there is uncertainty in the U.S. agriculture sector.
The legislation’s passage is also expected to benefit leading American agriculture companies such as %ArcherDanielsMidland (NYSE: $ADM), %Deere&Co (NYSE: $DE), and %TysonFoods (NYSE: $TSN).
The American Farm Bureau Federation, which serves farmers in all 50 U.S. states, said that the legislation provides some much needed “certainty” to farmers and ranchers.
Farm organizations ranging from the Corn Growers Association to the Cattlemen’s Beef Association and Association of Wheat Growers also praised the bill and its support of farming.
If there’s one aspect of the legislation that is winning universal praise, it is the extension of incentives on crop-based biofuels, and the exclusion of foreign feedstocks from U.S. tax breaks.
The bill extends tax credits by two years and restricts the eligibility of these credits going to fuels made from feedstocks in neighboring Canada and Mexico.
The legislation also retains full transferability throughout the term without large tax liabilities and excludes indirect land use changes in calculating lifecycle greenhouse gas (GHG) emissions.
Analysts and advocates say the new provisions will strengthen the U.S. biofuel industry while restricting foreign competition faced by U.S. farmers and companies.
Biofuels are fuels produced from renewable biological sources such as animal waste and crops such as corn.
Biofuels serve as a sustainable alternative to fossil fuels and are used in transportation, heating, and electricity generation. It is a growing industry that is helping the agriculture sector diversify.
Stocks of biofuel start-up companies such as %Gevo (NASDAQ: $GEVO) and Green Plains (GPRE) are cropping up on U.S. exchanges.
