Expiring Tax Breaks Could Squeeze California Agriculture

A major tax shift could be coming, and California’s farm and ranch families are watching closely. According to the American Farm Bureau, several provisions from the 2017 Tax Cuts and Jobs Act are set to expire at the end of 2025. That includes tax breaks that helped small and mid-sized ag operations keep more of what they earned.

While corporate tax cuts were made permanent, many individual and business deductions were not. Without congressional action, the Farm Bureau estimates farmers and ranchers could pay an extra $9 billion annually in federal taxes—roughly $5,000 more per farm. That’s on top of California’s already steep production costs, regulatory pressures, and ongoing climate challenges.

For many growers, especially those with thin margins, these changes could force hard decisions about labor, upgrades, and investment. Larger operations are also at risk—especially those relying on capital expensing tools and facing complex estate planning.

Beyond the farm, the concern is ripple effects. Fewer dollars on the ground could mean fewer jobs, lower local spending, and added strain on rural economies statewide.

The Farm Bureau says tax policy doesn’t have to be another wild card. But right now, it is.

For more: https://www.fb.org/market-intel/2025-tax-cliff-the-impact-of-the-tax-code