Updated CBO Baseline Reflects Increased Costs for Farm Programs in May

The Congressional Budget Office (CBO) recently released its updated Baseline for Farm Programs, revealing an increase in estimated costs for various programs, particularly nutrition programs, for the upcoming 2023 Farm Bill. These projections serve as an important reference point for lawmakers as they deliberate on the budgetary implications of potential policy changes.

The latest baseline highlights a 14% increase in projected outlays for nutrition programs, specifically the Supplemental Nutrition Assistance Program (SNAP). SNAP expenditures for 2023 alone are now estimated to reach $145 billion, reflecting higher-than-expected participation rates. When combined with other programs authorized in the farm bill, nutrition spending accounts for over 81% of the total expected outlays.

Furthermore, the May release forecasts a cumulative increase of $18 billion over the 10-year period from 2024 to 2033, bringing the total cost to nearly $1.5 trillion for a 2023 farm bill, potentially making it the most expensive on record.

Apart from nutrition programs, other notable changes in the baseline include an increase in crop insurance costs and higher outlays for commodity support programs and livestock disaster assistance. Conservation programs such as the Environmental Quality Incentives Program (EQIP) and the Conservation Reserve Program (CRP) also saw a significant increase in estimated costs.

The distribution of farm program payments aligns with base acreage, with corn, soybeans, and wheat representing the majority of payments. However, the costs for these provisions tend to move inversely to commodity prices, resulting in lower support payments during periods of higher prices.

The updated CBO Baseline serves as an important reference for policymakers during the farm bill discussions, providing insights into the projected costs of different programs. As legislators navigate these budgetary considerations, they aim to strike a balance between supporting agricultural producers, ensuring food security, and managing federal expenditures effectively.

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