Senate Advances Bold Tax and Ag Package Benefiting Iowa Farmers

July 1, 2025 | Brock Johnston

Ankeny, Iowa — The Iowa Soybean Association (ISA) applauds today’s U.S. Senate passage of the One Big Beautiful Bill Act, a sweeping package delivering generational wins for soybean farmers through federal tax code reforms, farm safety net improvements, and biofuel incentives.

At the heart of the bill is a strengthened Section 45Z Clean Fuel Production Credit. It’s an essential tool for supporting biofuels, including biodiesel made from soybeans. The final Senate package reflects several of ISA’s top priorities including extension of 45Z through 2029, removal of indirect land use change (ILUC) penalties, and a new restriction ensuring only feedstocks sourced from the U.S., Mexico, and Canada qualify for the credit. Additionally, the Small Biodiesel Producer Credit increased to 20 cents per gallon, supporting local biodiesel plants and boosting market access for Iowa-grown soy.

“This bill corrects serious flaws in the clean fuel credit and ensures Iowa-grown soybeans are judged by their actual environmental performance, not by arbitrary land use penalties,” said ISA District 6 Director Dave Walton, a farmer from Wilton and Secretary of the American Soybean Association. “Senator Grassley’s work to fix 45Z is a legacy achievement for Iowa farmers and biofuel producers.”

The bill delivers long-term stability and permanent tax relief to farmers. It raises the estate tax exemption to $15 million per individual, locks in the Section 199A deduction, and boosts the soybean reference price to $10 per bushel in 2025 with annual inflation adjustments beginning in 2031. The Agriculture Risk Coverage (ARC) program is strengthened and Beginning Farmer and Rancher (BFR) benefits for crop insurance are also expanded. The bill doubles funding for USDA’s Market Access Program and Foreign Market Development, creating new global demand channels for Iowa commodities.

ISA extends a sincere thank you to Iowa’s congressional delegation for supporting policies that prioritize market access, tax fairness and a strong farm safety net.

“We especially want to recognize Senator Chuck Grassley for being a relentless advocate on behalf of farmers throughout the 45Z negotiations and Congressman Randy Feenstra, who championed Iowa agriculture throughout discussions on 45Z and estate tax reform that was critical in shaping the final package,” said ISA President Brent Swart, a farmer from Spencer.

“Our delegation understands that policies aren’t theoretical but can be instrumental in the success of family farms,” said Swart. “We urge the House to build on this momentum and pass the bill without delay.”

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Not funded by the soybean checkoff

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The Iowa Soybean Association (www.iasoybeans.com) is “Driven To Deliver” increased soybean demand through market development and new uses, farmer-focused research and results, timely information and know-how and policy initiatives enabling farmers and the industry to flourish. Founded in 1964 by farmers to serve farmers, ISA is governed by a board of 22 farmers to advocate on behalf of the state’s 37,000 soybean producers, including more than 15,000 ISA farmer members and industry stakeholders.

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