USDA is increasing funding for its regenerative agriculture pilot program to $1 billion for fiscal year 2027, following strong producer interest during the program’s first year.
USDA Undersecretary for Farm Production and Conservation Richard Fordyce spoke with Associate Farm Reporter Carli Davenport about the increased investment, what USDA learned during the pilot’s first year and what producers can expect moving forward. Fordyce also discussed the upcoming 2027 Dairy Margin Coverage enrollment period, which begins Oct. 5.
Strong Producer Interest Drives Regenerative Program Increase
The regenerative pilot program was announced in late 2025, with USDA beginning implementation during 2026.Fordyce said it took some time for producers and USDA staff to fully understand the program, but interest eventually surpassed the available funding. “Once that happened we really had a lot of interest, and ultimately by the time we ended the 2026 fiscal year, the program was oversubscribed,”Fordyce said.
That demand led USDA to increase funding from $700 million in fiscal year 2026 to $1 billion for fiscal year 2027.
Fordyce said the program centers around two primary goals: improving soil health and encouraging whole-farm conservation planning. “Both of those things really resonate with folks, and so we knew we needed to earmark some additional dollars over and above what we did in 2026 for the fiscal year 2027,” Fordyce said.
USDA Learning From the First Year
Fordyce said the first year of the program also provided USDA with an opportunity to learn more about how regenerative practices fit different farming and ranching operations.
He said healthier soils can help improve the resiliency of agricultural operations, particularly during periods of unfavorable weather. “We know that healthier soils grow healthier plants,” Fordyce said. “That could be a row crop, that could be a specialty crop, an orchard, forage, really across the board when it comes to agriculture production.”
Fordyce said improving soil health can also help farms and ranches become more resilient during dry conditions. “If those soils are more resilient, those soils are more healthy, they’re going to carry that crop a little bit longer,” he said.
He added that the potential benefits can extend to the bottom line over time as producers improve soil health and potentially reduce the amount of inputs needed to produce crops or forage. “It will ultimately require less inputs, which means, you know, better returns and looks better on the bottom line if we’re putting less—if we’re spending less money to grow that crop or to grow that forage because we’re improving the soil health,” Fordyce said.
More Local Input Coming in 2027
For 2026, USDA administered the regenerative pilot through the Environmental Quality Incentives Program and the Conservation Stewardship Program.
Fordyce said USDA plans to continue using those programs in 2027 while allowing more input from individual states when determining priority practices. “What we’ve decided to do this time is to have, you know, a little bit more local input”.
He said recommendations can come from farmers and ranchers through a grassroots process and help states tailor the program to their own agricultural needs. That could mean different priorities in different parts of the country.
Fordyce pointed to practices such as cover crops and nutrient management as examples, but said the practices that make the most sense can vary depending on the region and production system. “It will vary what practices and how we approach that improvement to soil health,” Fordyce said.
He added that research from land-grant universities and agricultural commodity checkoff programs is also helping USDA better understand soil health across different geographies and cropping systems. “The more we learn, the more we understand how we can contribute to the improvement of soil health,” Fordyce said.
Producers Encouraged to Start With Local NRCS Office
For farmers and ranchers who are unfamiliar with the regenerative pilot program, Fordyce said the best place to start is with their local Natural Resources Conservation Service office. “I would encourage folks to contact their local NRCS office, and you know they’ll be able to have that conversation with you,” Fordyce said.
He emphasized that the program is designed to be voluntary and tailored to individual operations. “I think it really does start with a conversation: What are you trying to accomplish? What do you want to see improved on your farm?” Fordyce said.
He said producers can work with local NRCS staff to identify their conservation goals and determine which practices may fit their operation. “It’s voluntary, and you ultimately make the decision about what you want to do,” Fordyce said. “What direction you want to go. What are your goals? Where do you want to be five years from now?”
Fordyce said enrollment in the regenerative pilot is generally targeted around a five-year period, allowing producers to begin at a comfortable level and build additional conservation practices over time.
2027 Dairy Margin Coverage Enrollment Begins Oct. 5
Fordyce also discussed the 2027 Dairy Margin Coverage program, with enrollment scheduled to begin Oct. 5. He said recent changes allow dairy producers to make use of an increased Tier I production history limit, which moved from 5 million pounds to 6 million pounds.
The program also gives eligible dairy operations an opportunity to update their production history to better reflect current production.
Fordyce said that can be particularly important as dairy operations continue to improve production efficiency. “We’re certainly seeing that in dairy operations as well,” Fordyce said. “It seems like every sector of agriculture is just getting better at doing what they do.”
What Dairy Producers Need to Know About DMC
Fordyce said producers who selected the multi-year Dairy Margin Coverage election in 2026 still need to complete the annual enrollment process. He said nearly a record number of dairy operations enrolled in DMC in 2026, with many choosing the multi-year option through 2031.
Those producers received a 25% discount on premiums by making the multi-year election, but Fordyce said they still need to go to their local Farm Service Agency office each year and confirm they have an active dairy operation and sign the necessary application.
The Dairy Margin Coverage program is designed to provide protection when the margin between the price of milk and certain feed costs falls to a covered level.
Fordyce said the feed component used in the calculation includes corn, soybean meal and high-quality alfalfa. “It’s specifically for that margin between, again, the price of milk and the price in the feed component,” Fordyce said.
Dairy producers can select different margin and production coverage levels, with Fordyce emphasizing that those decisions ultimately depend on each operation’s individual risk-management needs. “Those decisions are based, you know, on what that farm is comfortable with, and what kind of risk management based on that margin that they’re comfortable with, and they feel like they need to support their operation,” Fordyce said.
