Updated the expenditure-tracking flow to Mermaid and kept the rest of the document intact.
Legislative and Policy Analysis
Section 10507: Poultry insurance pilot program
Executive Summary
Section 10507 creates a new poultry insurance pilot program within the Federal Crop Insurance Act. It directs the Federal Crop Insurance Corporation, administered through USDA’s Risk Management Agency, to establish an index-based insurance option for contract poultry growers, including broiler and laying-hen growers, to protect against extreme-weather-related increases in utility costs tied to poultry production.[1]
The section does not itself state a direct appropriation, premium subsidy rate, county list, enrollment cap, or total program size. However, the Congressional Budget Office estimated the Senate amendment version of Section 10507 would increase budget authority by $155 million and estimated outlays by $136 million over fiscal years 2025 through 2034.[2]
In practice, this is a targeted expansion of federally supported agricultural insurance into a cost category that is especially important for contract poultry houses: natural gas, propane, electricity, water, and other utility costs that can spike when extreme weather raises heating, cooling, ventilation, water, or energy needs.[1] The provision is likely most important in major poultry-producing states and counties, because the statute requires the pilot to operate in enough counties to evaluate feasibility, effectiveness, and producer demand in top poultry-producing states.[1]
What Section 10507 Actually Does
Section 10507 amends Section 523 of the Federal Crop Insurance Act by adding a new subsection for a “Poultry Insurance Pilot Program.”[1] The program is aimed at contract poultry growers rather than poultry integrators or processors. It covers poultry growers, including growers of broilers and laying hens, who may elect to receive index-based insurance for extreme-weather-related risk that results in increased utility costs associated with poultry production.[1]
The core statutory design is:
| Program or activity | Amount | What the money supports |
|---|---|---|
| Poultry insurance pilot program | No direct statutory appropriation stated in Section 10507 | Establishment of an index-based insurance pilot for contract poultry growers facing extreme-weather-related increases in utility costs.[1] |
| CBO-estimated budget authority, FY2025-FY2034 | $155 million | Estimated federal budget authority associated with the pilot program in the Senate amendment estimate.[2] |
| CBO-estimated outlays, FY2025-FY2034 | $136 million | Estimated federal outlays associated with the pilot program in the Senate amendment estimate.[2] |
The section requires the Federal Crop Insurance Corporation to engage poultry industry stakeholders when establishing the pilot program.[1] That means USDA will need to consult growers, insurers, poultry-sector representatives, and other relevant participants before converting the statutory authorization into an insurance product.
The program must be conducted in enough counties to allow a comprehensive evaluation of feasibility, effectiveness, and demand among producers in the top poultry-producing states, as determined by the Federal Crop Insurance Corporation.[1] This does not guarantee national availability at launch. It authorizes a geographically targeted pilot designed to test whether the product works and whether growers will use it.
The section also directs the Federal Crop Insurance Corporation Board to approve a policy or plan of insurance based on the pilot not later than two years after enactment, using the process in Section 508(h) of the Federal Crop Insurance Act.[1] Because Public Law 119-21 was enacted on July 4, 2025, the two-year approval deadline points to July 4, 2027, unless implementation is affected by later law or administrative action.[1]
Legislative Mechanism
Section 10507 uses an amendment-to-existing-law mechanism. It does not create a free-standing poultry assistance program outside the crop insurance system. Instead, it inserts a new subsection into 7 U.S.C. 1523, the Federal Crop Insurance Act’s pilot-program authority.[1]
This matters because the program will likely operate through the federal crop insurance infrastructure rather than through an ad hoc disaster-payment model. The Federal Crop Insurance Corporation, USDA’s Risk Management Agency, approved insurance providers, actuarial materials, underwriting rules, premium calculations, loss procedures, and crop-insurance data systems are likely to be the operational backbone.
The section also makes two important procedural choices.
First, it says the pilot applies “notwithstanding subsection (a)(2).”[1] That signals Congress wanted this poultry pilot to proceed even if ordinary limits or requirements in Section 523(a)(2) would otherwise interfere.
Second, it requires approval of a policy or plan under Section 508(h), which is the Federal Crop Insurance Act pathway for developing and approving new crop insurance policies or plans.[1] That means implementation will require product design, data selection, actuarial review, policy terms, coverage triggers, and Board approval before growers can actually buy or elect the coverage.
Expenditure Tracking and Reporting Protocol
Section 10507 creates a federally supported insurance product rather than a conventional grant program. Public tracking is therefore likely to be clearer at the broad crop-insurance-program level than at the individual statutory-section level.
The most likely tracking sources are CBO cost estimates, USDA Risk Management Agency crop insurance program data, Federal Crop Insurance Corporation financial reporting, Treasury account reporting, OMB budget materials, and oversight by USDA’s Inspector General, GAO, and congressional agriculture committees.
flowchart TD
A[Statutory pilot authority] --> B[Federal Crop Insurance Corporation]
B --> C[USDA Risk Management Agency]
C --> D[Stakeholder engagement]
D --> E[Policy design]
E --> F[Board approval]
F --> G[Approved insurance providers]
G --> H[Contract poultry growers]
H --> I[Coverage election]
I --> J[Premium subsidy administration]
I --> K[Indemnity administration]
J --> L[USDA budget execution]
K --> L
L --> M[Treasury reporting]
L --> N[OMB budget materials]
L --> O[USDA RMA program data]
L --> P[FCIC financial reporting]
O --> Q[Public visibility]
P --> Q
M --> Q
N --> Q
Q --> R[Likely aggregated or delayed]
L --> S[Oversight]
S --> T[CBO estimates]
S --> U[USDA Inspector General]
S --> V[GAO reviews]
S --> W[Congressional oversight]
The key limitation is that Section 10507 does not create a separate public reporting dashboard, annual report, or dedicated account named in the section itself. As a result, the section’s costs may be hard to isolate in routine public spending datasets unless USDA or CBO publishes line-item information. CBO did provide a section-specific score for the Senate amendment version, estimating $155 million in budget authority and $136 million in outlays over fiscal years 2025 through 2034.[2]
Because this is insurance, not a grant, public-facing spending may appear as part of broader crop insurance premium subsidy, delivery, underwriting, indemnity, or FCIC account activity. Payments to producers may not be visible in the same way as grants on USAspending.gov, and producer-level insurance information may be protected or aggregated.
Day-to-Day Government Process Changes
For USDA, the main process change is the creation of a new insurance product development track. USDA’s Risk Management Agency and the Federal Crop Insurance Corporation will need to design an index-based product that translates extreme-weather-related utility-cost risk into measurable triggers. That likely requires decisions about what index to use, what weather events qualify, how to measure utility-cost changes, how to define eligible poultry production facilities, and how to avoid moral hazard or duplicative coverage.
For the Federal Crop Insurance Corporation Board, the section creates a deadline-driven approval responsibility. The Board must approve a policy or plan based on the pilot within two years of enactment and must do so through the Section 508(h) process.[1]
For approved insurance providers and agents, the change could create a new product line for contract poultry growers. They may need new training, underwriting materials, sales tools, data systems, and claims procedures specific to poultry-house utility costs.
For growers, the day-to-day impact is likely to be administrative rather than immediate at first. Growers in pilot counties would need to review coverage terms, assess premium costs, document eligible production operations, and decide whether the index trigger matches their actual exposure to electricity, propane, natural gas, water, and other utility-cost spikes.
Effects on Consumers
The direct consumer effect is likely limited. Section 10507 does not regulate retail poultry prices, grocery stores, processors, or household utility bills. It also does not directly subsidize consumers.
However, the indirect consumer effect could matter if the pilot improves the financial stability of contract poultry growers during extreme weather. Poultry production depends on climate-controlled housing, ventilation, heating, cooling, water systems, and reliable electricity. If extreme weather causes utility costs to spike, growers may face financial stress even when their production contracts limit their ability to pass those costs along.
If the pilot works, it could modestly reduce the risk that weather-driven utility shocks disrupt poultry production in covered areas. That could support supply continuity for chicken and eggs, although the effect on retail prices would likely be indirect, localized, and hard to separate from feed costs, disease outbreaks, processor pricing, labor costs, energy markets, and broader food inflation.
Effects on Businesses
The most direct business beneficiaries are contract poultry growers in eligible pilot counties. These growers often operate poultry houses under contracts with larger integrators and may bear significant facility, energy, heating, cooling, and water-management costs. Section 10507 gives them a potential new risk-management tool for utility-cost spikes tied to extreme weather.[1]
Approved insurance providers may also benefit from a new federally supported product line. Insurance companies and agents participating in the federal crop insurance system may have new sales, servicing, compliance, and claims-administration work.
Poultry integrators could experience indirect benefits if growers are better able to absorb extreme-weather-related utility shocks and keep poultry houses operating. But the statute is written for contract poultry growers, not as a direct payment or insurance benefit for integrators.[1]
The main business risks are design risk and accessibility risk. If the index does not match real-world utility-cost exposure, growers may pay premiums but receive little protection when costs rise. If the pilot is offered only in selected counties, similarly situated growers outside pilot areas may receive no benefit. If paperwork, premiums, or eligibility terms are too burdensome, uptake may be weak even in poultry-heavy regions.
Environmental and Climate Impact
Section 10507 is climate-adaptation policy more than climate-mitigation policy. It responds to the financial consequences of extreme weather by helping growers insure against utility-cost increases, but it does not require lower emissions, renewable energy adoption, energy-efficiency upgrades, or changes in poultry-house design.
The environmental upside is that the pilot may help growers manage extreme heat, cold, storms, water stress, and energy volatility without being pushed into financial crisis. That can be especially relevant for animal welfare because poultry houses require reliable heating, cooling, ventilation, and water systems.
The environmental downside is that the program may soften the financial signal created by rising energy and water costs without requiring investments that reduce energy demand or climate vulnerability. For example, a grower may receive insurance protection for higher utility costs without also installing more efficient ventilation, insulation, backup power, solar, geothermal, or water-conservation systems.
The net climate impact is therefore mixed. The section could improve resilience for existing poultry operations, but it does not directly reduce greenhouse gas emissions or require climate-smart infrastructure.
Impact Summary
Section 10507 is a narrow but meaningful expansion of the federal agricultural insurance system. It recognizes that contract poultry growers face a specific risk: extreme weather can sharply increase the cost of electricity, natural gas, propane, water, and related utilities needed to keep poultry houses operating.[1]
The section’s strength is that it targets a real operational vulnerability in poultry production and requires a pilot in top poultry-producing states. Its weakness is that it leaves many important details to USDA and the Federal Crop Insurance Corporation, including the index design, county selection, premium structure, data sources, and practical fit for growers.
The policy is likely to help some poultry growers manage weather-related cost volatility. It is unlikely to have a clear or immediate consumer-price effect. Its public expenditure trail may be difficult to isolate unless USDA and CBO continue publishing section-specific data. Based on CBO’s Senate amendment estimate, the provision is relatively small compared with the broader farm safety net, but still financially meaningful at an estimated $155 million in budget authority and $136 million in outlays over fiscal years 2025 through 2034.[2]
Key References and Sourcing
| Source | Relevance |
|---|---|
| Public Law 119-21, Section 10507, GovInfo | Primary statutory text establishing the poultry insurance pilot program and describing eligibility, covered utility-cost risks, stakeholder engagement, geographic pilot requirements, and the two-year approval deadline. |
| Congressional Budget Office, Estimated Budgetary Effects of the Senate Amendment to H.R. 1 | Provides section-specific estimated budget authority and outlays for Section 10507 over fiscal years 2025 through 2034. |
| U.S. Code, 7 U.S.C. 1523, Pilot programs | Shows the Federal Crop Insurance Act pilot-program section amended by Section 10507. |
| Senate Agriculture Committee, Section-by-Section Summary | Provides congressional summary language describing Section 10507 as an index-based insurance pilot for contract poultry growers facing extreme-weather-related utility-cost risk. |
| Iowa State University Center for Agricultural Law and Taxation, Reviewing the Agricultural Provisions in the One Big Beautiful Bill Act | Secondary agricultural-law summary explaining that the provision creates index-based insurance for contract poultry growers facing higher utility costs caused by extreme weather. |
| American Farm Bureau Federation, One Big Beautiful Bill Act: Final Agricultural Provisions | Stakeholder analysis describing the pilot as a risk-management tool for contract poultry growers facing utility cost volatility and extreme weather. |
[1] Public Law 119-21, “Section 10507. Poultry insurance pilot program,” GovInfo, https://www.govinfo.gov/link/plaw/119/public/21.
[2] Congressional Budget Office, “Estimated Budgetary Effects of an Amendment in the Nature of a Substitute to H.R. 1, the One Big Beautiful Bill Act,” Summary Table and Title I spreadsheet, June 2025, https://www.cbo.gov/system/files/2025-06/61534-hr0001-Sen-2025Recon-CLB.xlsx.
[3] Office of the Law Revision Counsel, U.S. House of Representatives, “7 U.S.C. 1523: Pilot programs,” https://uscode.house.gov/view.xhtml?edition=prelim&num=0&req=granuleid%3AUSC-prelim-title7-section1523.
[4] Senate Committee on Agriculture, Nutrition, and Forestry, “Section-by-Section Summary,” https://www.agriculture.senate.gov/imo/media/doc/senate_anf_section_by_section_final.pdf.
[5] Iowa State University Center for Agricultural Law and Taxation, “Reviewing the Agricultural Provisions in the One Big Beautiful Bill Act,” https://www.calt.iastate.edu/post/reviewing-agricultural-provisions-one-big-beautiful-bill-act.
[6] American Farm Bureau Federation, “One Big Beautiful Bill Act: Final Agricultural Provisions,” https://www.fb.org/market-intel/one-big-beautiful-bill-act-final-agricultural-provisions.
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