Higher enrollment in SNAP and lower commodity prices will boost the 10-year baseline for the farm bill to $1.48 trillion, the most expensive ever, said the Congressional Budget Office in an updated projection of federal spending.
The baseline sets the limit for spending in the new farm bill.
The CBO added $28 billion to the baseline, split between $18 billion in higher SNAP costs and $10.4 billion in larger outlays or commodity supports and taxpayer-subsidized crop insurance compared to its February projections. In a report released on Friday, the agency characterized the revisions to its February estimate for spending throughout the government as technical changes based on matters such as updated population data rather than changes in law affecting outlays in the years ahead.
Changes in the baseline have offsetting effects. More money is available when the projections are increased but there is additional need for federal support.
Leaders of the Senate and House Agriculture committees met President Biden last week to discuss “the importance of passing a bipartisan farm bill this year … It is a safety net for farmers and consumers, and it is an investment in our rural communities and the health of the American people,” they said in a joint statement after their trip to the White House.
In its report, the CBO said more people would participate in SNAP and enrollment would decline more slowly than it had previously projected. For example, it forecast 42.2 million people would receive food stamps in fiscal 2024, dropping to 35.1 million in fiscal 2033. The February projection was 41.4 million SNAP participants in fiscal 2024, declining to 34.4 million in fiscal 2033. The CBO estimated benefits would be 1 cent a month higher per person in the final years of the coming decade.
The CBO also forecast lower commodity prices. It said this year’s corn crop, which would be sold during the first year of the farm bill, would fetch a season-average price of $5.80 a bushel and soybeans would average $12.50 at the farm gate. The 2022 corn crop will average $6.60 a bushel and soybeans $14.20 a bushel, according to the USDA.
Commodity prices could be lower than the CBO estimated. The USDA issued its first projections of season-average prices for this year’s crops on Friday and pegged corn at $4.80 a bushel and soybeans at $12.10 a bushel.
Commodity subsidies were projected at $65.3 billion and crop insurance outlays at $101.4 billion over the next decade. In February, the CBO said commodity supports would cost $57.5 billion and crop insurance $97 billion over 10 years. Conservation programs were projected to cost $60 billion, down slightly from the February projection of $61.8 billion.
The USDA projected record-setting crops of 15.265 billion bushels of corn and 4.510 billion bushels of soybeans in its monthly WASDE report — larger than the CBO projected in its report. Large crops often lead to softer market prices.
In its first forecast of the winter wheat crop, the USDA said farmers would harvest 1.13 billion bushels of wheat, a scant 2-percent increase from last year. Record-high market prices prompted growers to sow more land but dry weather in the Plains will mean lower yields per acre, said USDA’s Crop Production report. Kansas, the No. 1 winter wheat state, was forecast to produce 191.4 million bushels, a 22-percent decline from 2022. Winter wheat accounts for three-fourths of U.S. wheat production. The winter wheat crop, harvested in late spring and early summer, was the first chance for American growers to respond to Russia’s invasion of Ukraine.
The updated CBO baseline is available here.