SDRP Stage 2 Disaster Program Sign-Up Announced

USDA initiated sign-up for Stage 2 the Supplemental Disaster Relief Program (SDRP) at local Farm Service Agency (FSA) offices on November 24. The sign-up period will continue until April 30, 2026. Stage 1 of the SDRP program began on July 10, 2025, and many farmers that were eligible for Stage 1 have already signed up and have received their SDRP payment. A total of just over 16 billion dollars was allocated by Congress for the SDRP program. As of November 21, a total of just over $5.7 billion has been paid out under Stage 1 of the program, with over 381,000 farmers in the U.S. receiving benefits. Thus far, farmers in Minnesota have received the highest amount of Stage 1 payments, with a total of just $667 million going to over 36,000 farmers. Iowa farmers have received just under $539 million in SDRP payments going to nearly 38,000 farmers.
“Stage 1” of SDRP focused on farmers with crops in 2023 and 2024 that had a federal crop insurance policy in place, or had crops that were enrolled in the Noninsured Disaster Assistance Program (NAP) in 2023 and 2024. To qualify for “Stage 1”, farmers had to receive a crop insurance indemnity payment or a NAP payment tied to a qualifying disaster in 2023 or 2024. Qualifying disasters include floods, wildfires, hurricanes, freezes, excessive moisture, heat, and qualifying drought. Eligibility for drought losses was restricted to counties that experienced a drought level of “D3” or higher at in 2023 or 2024, or in counties that were at a “D2” drought level for eight or more consecutive weeks, based on the weekly U.S. Drought Monitor. A county needed to be listed as eligible for the SDRP due to drought, in order for individual farmers to qualify for SDRP payments due to drought.
“Stage 2” of the SDRP program includes assistance for losses from uncovered crop losses, shallow crop losses, and crop quality losses. Here are more specific details on the types of losses that are covered by “Stage 2” SDRP:
• Shallow crop losses - This would be for 2023 and 2024 crop losses that did not meet the threshold requirements for Stage 1 SDRP payments. The type of eligible losses and the payment formulas and calculations will be very similar to Stage 1 of SDRP. The calculations will be based off 2023 and 2024 Risk Management Agency (RMA) crop insurance data or NAP data. This is the category that most Midwest corn, soybean, and wheat producers will fall under.
• Uncovered crop losses - This category will provide Stage 2 SDRP assistance for eligible crops that are not covered by federal crop insurance or the NAP program. Crop losses in this category will be factored to 70 percent of the intended revenue for a crop, compared to 75-90 percent for insured crops. This could include certain fruit and vegetable crops, tree farms, etc.
• Quality Losses - This would cover losses that resulted in quality discounts in a crop that were not covered by crop insurance, such as may have occurred from flooding. Forage crops that had reduced nutritional value may also be eligible under Stage 2 of SDRP. Farmers should check with their local FSA office for potential eligibility of quality losses.
The application process for “Stage 2” SDRP losses will require farmers to apply at their local FSA office. The application process for those with “shallow losses” will be very similar to the relatively easy sign-up process for “Stage 1” payments, using a pre-filled “Stage 2” SDRP application at their FSA office with the 2023 or 2024 crop insurance (RMA) or NAP yield data already entered. They will then just need to designate the type of disaster that caused the crop loss, verify the data, and sign the form to initiate SDRP payments. SDRP applications must be signed by all parties that share in the crop value. Farmers will need to report any discrepancies in the data to both the FSA office and their crop insurance agent. Farmers will also need to have all other required FSA forms on file at their local FSA office, which are typically already on file if the farmer regularly receives government farm program payments. The sign-up process for “uncovered crop losses” and “quality losses” under “Stage 2” of SDRP may be a bit more complicated, as it will require the utilization of alternate criteria other than RMA and NAP yield data.
Eligible “shallow loss” Stage 2 SDRP payments occur in situations where there was a documented loss of at least 5 percent below the federal crop insurance crop revenue (APH yield x the 2023 or 2024 Spring price), and the final revenue (final 2023 or 2024 crop yield x the harvest price) was above the threshold (60-85 percent of the crop insurance revenue) to receive a crop insurance indemnity payment for 2023 or 2024. For example, a 2023 or 2024 75% revenue protection (RP) crop insurance policy on corn that had a final revenue between 75-95 percent would result in eligibility for a Stage 2 SDRP payment. If that producer had carried 85% RP insurance coverage, then the Stage 2 payment eligibility would occur at 85-95 percent of the original crop insurance revenue for the year.
SDRP will cover losses from eligible crops for both the 2023 and 2024 crop years. The crop losses will be calculated separately for each year, so eligible producers could receive a payment for each year. Producers are not eligible to receive a Stage 1 SDRP payment and a Stage 2 payment on the same crop on the same farm unit in a given year. However, following are situations where farmers that were not eligible for a Stage 1 SDRP payment might be eligible for a Stage 2 payment:
• A farmer received a Stage 1 payment for corn in 2024; however, had a shallow loss on corn in 2023. That farmer is now eligible for a Stage 2 SDRP payment for corn in 2023.
• A farmer received a 2024 Stage 1 payment for corn; however, he had a shallow loss on soybeans in 2024. That farmer is now eligible for a Stage 2 SDRP payment for soybeans.
• A farmer has three different farm units and received Stage 1 SDRP payments on two farm units’ however, had a shallow loss on the third farm. That farmer is now eligible for a Stage 2 payment on the third farm.
Similar to Stage 1, the initial Stage 2 payments will be paid at a rate of 35 percent of the total calculated SDRP payment amount. Once all the payments for Stage 1 and Stage 2 in the U.S. have been calculated, after April 30, 2026. The additional round of SDRP payments would occur if the total Stage 1 and Stage 2 SDRP payment amount in the U.S. is lower than $6 billion. Most analysts feel that it is highly likely that we could see an additional “top-up” SDRP payment after April 30, 2026; however, that payment will likely be at a lower percentage than the initial Stage 1 and Stage 2 SDRP payment percentage (35%).
Standard FSA payment limits will apply to all SDRP payments. The payment limit for SDRP payments is $125,000 per eligible individual or entity; however, the payment limit increases to $250,000 if at least 75 percent of the reported gross income on the tax returns are derived from eligible farm-related operations. There is potential for even higher payment limits for certain specialty crops. There will be a separate payment limit for both 2023 and 2024. Farmers that receive SDRP payments will be required to maintain at least 60 percent federal crop insurance coverage for at least the next two years. Failure to comply with this requirement would require full repayment of the SDRP payment plus interest.
Any farmers with questions or needing clarifications on Stage 2 SDRP payments should contact their local FSA office for more information. The SDRP payments are certainly helpful to farmers that have faced financial hardship following significant crop loss in 2023 and 2024 due to drought and other natural disasters. It should be pointed out that the 35 percent payment factor only accounts for a small portion of the losses that were incurred by the farmers that were affected. These SDRP payments also do not account for the continued low commodity prices and poor profit margins that farmers are incurring with the 2025 crop and will likely face in the 2026 crop year.
For additional information contact Kent Thiesse, Farm Management Analyst, Green Solutions Group Phone --- (507) 381-7960; E-mail --- [email protected]