We conclude that animal ag subsidies are not a central pillar holding up the animal ag industry. Eliminating subsidies would not significantly affect the availability, retail pricing, or consumption levels of animal-sourced foods.[1]
Other government policies are exponentially more important to the industry’s stability, sales volume, and profitability, especially the absence of regulations limiting animal abuse and the ineffective regulations to limit pollution. The industry’s central economic pillar is the ability to intensively confine animals, followed by its mostly unrestrained generation of air and water pollution.
However, an effort to reduce subsidies can offer a rare alliance between progressives, traditional conservatives, and libertarians, each trying to reduce subsidies for somewhat different reasons. This could make it an area where advocates could meet with some success.
Additionally, some subsidy programs are uniquely damaging and worthy of all efforts to dismantle them. We suggest that chief among these are the subsidies supporting factory farm gas (aka biogas) which stabilize the factory farm business model, enhance its long-term profitability, encourage the concentration of larger numbers of animals per operation, and put a green halo on an immoral and environmentally catastrophic system.
These points are explored further on this page or other pages in the Subsidies section.
We estimate that at least 50% of all federal agricultural subsidies support the factory farming system.[1]
Broadly estimated, ~$16 billion of the ~$30 billion in annual federal subsidies supports industrial animal agriculture.[2] About $11 billion goes to feed crop producers, and about $5 billion goes directly to livestock and factory farm operations.
See, Estimated Cost of Major Agricultural Subsidies, https://docs.google.com/spreadsheets/d/1S8LMCG0XIX7Jt2JhdCn6aGhBH6EpTQNC–jpKsv0Y68/edit?gid=0#gid=0
For further details see, Animal Ag Subsidies
For many reasons, animal ag’s central role in federal agricultural subsidies is mostly ignored.
Federal agencies and most researchers view all agricultural products as having equal value, “feeding America and feeding the world.” Few analysts have incentives to look specifically at animal ag.
Most animal ag subsidies are “hidden” behind crops (corn and soybeans) that are regularly labeled as going towards “feed, fuel, food, and exports” when in fact the great majority is used for feed.
Animal ag’s economic value as a portion of agricultural production makes it something that government entities and even many researchers protect rather than challenge.[1]
The vast number, complexity, and constant variation of these programs defies common understanding, and this reduces the ability to identify each of the threads that specifically supports animal ag.[2]
In at least one study, the Environmental Working Group has been an exception, noting that the support for livestock operations has grown sharply in the last few years, while also acknowledging that their tally does not include the additional support for feed crops.[3]
USDA ERS (February 6, 2025) Farm Income and Wealth Statistics – Value added by U.S. agriculture (includes net farm income). https://data.ers.usda.gov/reports.aspx?ID=4047 [Value of animals and products production = $274.6B. Value of crop production = $237.9B.]
U.S. GAO (December 2024) Farm Programs: USDA Financial Assistance to Agricultural Producers for Fiscal Years 2019–2023, GAO-25-107174, p. 21, notes. [This report covers 27 subsidy programs while acknowledging that there are a wide range of programs beyond their scope.]
Bennett Rosenberg & Jared Hayes (October 28, 2024) USDA livestock subsidies top $72B, Environmental Working Group. https://www.ewg.org/news-insights/news/2024/10/usda-livestock-subsidies-top-59-billion
Cheap and abundant feed delivered to confined animals is one of the cornerstones of the factory farming system. Animal feed is the largest expense of bringing broiler chickens and pigs to slaughter weight, and for generating milk from dairy cows.[1-3] About two-thirds of the subsidies that support the animal ag industry (~$11 billion) go to feed crop producers.[4]
Although there is little credible information assessing the impacts of feed crop subsidies on the availability and cost of feed, it is likely that subsidies only slightly reduce the cost and slightly increase the availability of the largest feed crops – corn, soybeans, and forage. Some, and possibly most, of the benefits accrue directly to crop farmers and landowners, not to the purchasers of feed.[5]
About one-third of animal ag subsidies are direct payments to livestock and factory farm operations (~$5 billion).[6] To give context to that figure, if it were divided equally among the approximately 145,000 AFOs (animal feeding operations) it would provide ~$35,000 for each operation.[7]
Most of the direct payments are given to larger operations in larger sums.[8] They offset foreseeable risks or address the inherent problems of the industry like widespread animal diseases or manure pollution, both stemming from the intense concentration of animals. It is likely that the primary effect is to enhance the profitability of larger factory farm and ranching operations.
Tyson Foods Inc. Annual report 2024, Form 10-K (Sept. 28, 2024) p. 3. [In 2024, “corn, soybean meal and other feed ingredients were major production costs, representing roughly 56% of our cost of growing a live chicken domestically.”]
Christopher, David, et al., (2022) U.S. Hog Production: Rising Output and Changing Trends in Productivity Growth, USDA Economic Research Service, Report 308, p. 20. [For pig production, “feed costs constituted 50 to 61 percent of operating costs and 39 to 51 percent of total economic costs during 2011–20.”]
Whitt, Christine, et al., (2021) America’s Diverse Family Farms, 2021 Edition, USDA Economic Research Service, Bulletin 231, pp. 11-12. [“Feed expenses made up 48 percent of all expenses on dairy operations…”]
We estimate that about $11 billion of the $16 billion in total animal ag subsidies goes to that share of crops that are specifically used for animal feed. For details, see Animal Ag Subsidies
See, Animal Ag Subsidies [question: What are the major impacts of federal ag subsidies?]
See, Animal Ag Subsidies [question: Other than feed crop support, what are major subsidy programs for animal ag?]
For estimate of the number of AFO’s, see, Total Number of AFOs and CAFOs
See, Agricultural Subsidies Overview [question: What share of federal subsidies go to larger farms and wealthier landowners?]
There is evidence that the industry would quickly adapt to the removal of subsidies, maintaining its sales volume and profitability. The loss would have little impact on retail pricing and almost no impact on the consumption of animal-sourced foods. There are two main reasons:
First, the bulk of feed crop subsidies likely translates into increased income, wealth, and land values for crop producers and landowners.[1] This would have little positive impact on corporate producers like Tyson, JBS, or Cal Maine. Feed crop subsidies make up about two-thirds of animal ag subsidies.
Second, despite the large size and the unnecessary cost to taxpayers, total subsidies are an extremely small share of food costs for the consumer. Total national food spending was $2.63 trillion in 2024.[2,3] Of this, about $770 billion (30%) was spent on animal-sourced foods.[4] Total subsidies to animal ag of $16 billion are ~2% of the total value of food spending on animal-sourced foods.
The subsidies to animal ag are given out to producers at the beginning of a multi-step process that brings food to consumers. Feed crops and factory farms are a small part of the cycle that leads to slaughterhouses, processing, packaging, distribution, wholesale, retail, restaurants, and other food services. Farm production’s share of total U.S. food spending is estimated at just 11%.[5] For meat, dairy, and eggs, the share is higher, but still a small portion of total spending.
See, Animal Ag Subsidies [question: What are the major impacts of federal ag subsidies?]
USDA ERS (June 10, 2025) Food Prices and Spending: Total food spending reached $2.63 trillion in 2024. https://www.ers.usda.gov/data-products/ag-and-food-statistics-charting-the-essentials/food-prices-and-spending
USDA ERS (July 21, 2025) Food Expenditure Series, File: Nominal food and alcohol expenditures, with taxes and tips, for all purchasers, by outlet type [Food spending by category, totaling $2.63 trillion]
U.S. Bureau of Labor Statistics (December 2024) Consumer expenditures in 2023. [per capita $1,164 (meats, poultry, fish, and eggs) + $602 (dairy products) / $6,053 (food at home) = 29.2% * 2.63 trillion = $767 billion. The BLS does not estimate the share of animal-sourced foods eaten away from home, so we use the share of at-home and apply it to all food spending.]
USDA ERS (January 5, 2024) Food Dollar Series – Food Dollar Application. https://data.ers.usda.gov/reports.aspx?ID=4045 [In 2023 “farm production” was responsible for just 9.1 cents of every food dollar. “Agribusiness” inputs constituted another 1.6%]
Yes, but only slightly. The benefits of subsidies most likely accrue more to individual producers rather than consumers. It seems intuitive that crop subsidies would slightly decrease final costs due to slightly higher levels of production. However, higher land values and rental costs may partially offset the effects of slightly larger production.
Some articles and reports suggest (usually with limited evidence) that subsidies for animal ag meaningfully reduce the costs of animal sourced foods. And there are some reports questioning that view. They suggest that the impacts on food prices of removing all ag subsidies would be very small (other than for taxpayers and the income of farmers). We think the latter position is more valid.[1-4] There is not an extensive body of research on the subject, presumably because of the high complexity, interacting forces, and constant variation of subsidy programs.
Alston, J. M., et al., (2013). Impact of agricultural policies on caloric consumption. Trends in Endocrinology & Metabolism, 24(6), 269-271, p. 269. [“Contrary to common claims, US agricultural policies have had generally modest and mixed effects on prices and quantities of farm commodities, with negligible effects on the prices paid by consumers for food, and thus a negligible influence on dietary patterns and obesity.”]
Lusk, J. L. (2017). Distributional effects of crop insurance subsidies. Applied Economic Perspectives and Policy, 39(1), 1-15. [“…the removal of insurance premium subsidies is projected to raise the price of all foods, from a high of about 1% for eggs to a low of about 0.048% for food away from home.”]
Glauber, J. W., et al., (2017) Poverty, Hunger, and US Agricultural Policy. American Enterprise Institute, Exec. Summary. [“It turns out that farm commodity subsidy programs in the United States have a quite limited potential to affect retail food prices.”]
Daniel Sumner (April 2022) Farm Subsidies and the Poor. American Enterprise Institute, p. 2. [“On net, the impact (positive or negative) of these programs on food-related farm commodity prices is tiny.”]
Animal ag subsidies play a relatively minor role in holding up industrial animal agriculture, compared to other pillars of the system.
Subsidies are unusual in that they expressly support the expansion of the factory farming system. However, their impacts on the industry are small compared to the benefits gained from the central negative externalities of animal ag:[1]
The extraordinary levels of confinement and restriction of movement constitute the central factor supporting the availability of cheap animal-sourced foods.[2]
The failure to limit air and water pollution emanating from factory farm manure and chemical fertilizers is likely the next largest gift to the industry.
The support for animal ag’s takeover of land and water resources leading to the decimation of wildlife and natural ecosystems is crucial to the industry’s health.
The failure to limit the abuse of antibiotics and other chemicals and contaminants is a key component in the industry’s profitability.
These factors are exponentially more important in maintaining the economic viability of the factory farming system.
It should be noted, however, that subsidy programs for animal ag occupy an unusual niche in the political landscape, opposed by many progressives, along with traditional conservatives and libertarians, who question welfare programs for relatively wealthy farmers. That coalition could eventually challenge the status quo, in the face of unsustainable deficits.
For a review and ranking of the major negative externalities of industrial animal ag, see, Animal Ag Externalities
Note that a relatively small change to the indoor space allocated to factory farmed sows during just a portion of their lives has apparently had a large impact on the cost of pork (up 20%) and the consumption of pork (down 20%) in California. See: Hawkins, Hannah et. al., (2024). Proposition 12 Pork Retail Price Impacts on California Consumers. ARE Update 27(3): 5–8. p. 5. University of California Giannini Foundation of Agricultural Economics
Most agricultural subsidies translate at least partially into more income and higher levels of wealth for crop farmers and factory farm operators.[1] Landowners benefit, especially from predictable subsidies like crop insurance, through higher land values and rental costs.[2]
The evidence indicates that feed crop production is slightly increased by steadily available subsidized crop insurance, and perhaps to a lesser degree by more variable direct payments.[3-5] Some of that increased production occurs on marginal land which is associated with higher environmental costs.[6,7]
Since the largest farms are more efficient at procuring subsidies, there is also a tendency for farms to grow larger in response to subsidy offerings.[8]
The ~$5 billion in subsidies paid directly to livestock and factory farm operations come from a multitude of programs that would require individual parsing to accurately assess their effects.[9] Some of those impacts are particularly damaging or brutal and are worthy of all efforts at reversal. Subsidies for factory farm gas (aka biogas) fall into that category, as do subsidized “depopulation” services and misdirected “conservation” subsidies whose effects are often in opposition to their stated goals.[10-12]
Nonetheless, in the big picture of factory farm’s abuses, this funding is not the primary support for the industry. For context, $5 billion is ~2% of the total value of production of livestock and poultry operators.[13]
For a more detailed analysis of the impacts of agricultural subsidies, see, Agricultural Subsidies Overview [question: What are the major impacts of federal ag subsidies?]
Kirwan, B. E. (2009). The incidence of US agricultural subsidies on farmland rental rates. Journal of political economy, 117(1), 138-164. [“Accounting for nearly the full subsidy dollar with these two largely independent estimates provides confidence in an approximately 25/75 landlord-tenant split of the marginal subsidy dollar.” The “tenant” is the farm operator, who gains most of the value of the subsidy.]
Lubowski, R. N., et al., (2006). Environmental effects of agricultural land-use change: The role of economics and policy. USDA ERS, Rpt. No. 25, p. 46. [“Our results indicate that the increase in crop insurance subsidies changed land use measurably, but modestly.”]
Yu, J., Smith, A., & Sumner, D. A. (2018). Effects of crop insurance premium subsidies on crop acreage. American Journal of Agricultural Economics, 100(1), 91-114, p. 111. [“Our estimates imply that crop insurance premium subsidies have economically significant effects on crop acreage. …a 10% increase in the subsidy per dollar of liability increases the planted acreage by 0.43%.”]
Alizamir, S., et al., (2019). An analysis of price vs. revenue protection: Government subsidies in the agriculture industry. Management Science, 65(1), 32-49. p. 34. [“While the PLC (Price Loss Coverage) program always motivates the farmers to plant more acres compared to when no subsidy is offered, the farmers may plant fewer acres under ARC (Agriculture Risk Coverage).”]
Classen, Roger, et al., (2011) Grassland to Cropland Conversion in the Northern Plains: The Role of Crop Insurance, Commodity, and Disaster Programs, USDA Economic Research Service, ERR-120, p. 1. [Analyzing the conversion of native grasslands to cropland, “…the benefits of crop insurance, disaster assistance, and marketing loans increased cropland acreage by about 2.9 percent between 1998 and 2007.”]
Lubowski, R. N., et al., (2006), p. 47 and 51. [“While the insurance policy change is estimated to affect just about 1 percent of total cultivated cropland, the increase in insurance subsidies appears to have had the largest effect for low-productivity and certain environmentally sensitive land … Estimated lands in cultivation due to the increase in crop insurance subsidies include some areas with high populations of imperiled wildlife species.”]
See, Agricultural Subsidies Overview [question: What share of federal subsidies go to larger farms and wealthier landowners?]
See, Animal Ag Subsidies [question: What are the largest programs for factory farm and livestock operations?]
Waterman, C. & Armus, M. (2024). Biogas or Bull****? The Deceptive Promise of Manure Biogas as a Methane Solution. Friends of the Earth.
Andrew Jacobs (April 2024) A Cruel Way to Control Bird Flu? Poultry Giants Cull and Cash In. NY Times. https://www.nytimes.com/2024/04/02/science/bird-flu-aid-animal-welfare.html
Michael Happ (2022) Payments for Pollution: How Federal Conservation Programs Can Better Benefit Farmers and the Environment, Institute for Agriculture & Trade Policy. [“At the same time that EQIP pays farmers to improve their land and mitigate climate risks, it is also subsidizing many highly polluting farms that are actively making the climate crisis worse.”]
USDA ERS (February 6, 2025) Farm Income and Wealth Statistics – Value added by U.S. agriculture (includes net farm income). [Value of animals and products production = $274.6B. Value of crop production = $237.9B]
In general, studies on the environmental impacts of ag subsidies are sparse, inconclusive, or take conflicting positions. And many key reports on the subject are outdated and do not reflect current subsidy programs. A 2020 literature review of subsidized crop insurance by the OECD points to almost as many reports documenting incremental environmental benefits as environmental damages.[1] Despite an intuitive understanding that increasing income and reducing risk would generate more production and hence more environmental damage, some credible reports claim there is little connection.[2]
The strongest evidence of environmental harms comes from findings that show that subsidies generally incentivize producers to farm lands of marginal quality or ecological importance resulting in environmental degradation.[3-6] Additionally, it can be said with certainty that subsidies help keep in place a system of farming – monoculture, GMO-reliant, with heavy applications of fertilizers and pesticides – that brings with it a host of environmental problems including high levels of nutrient pollution and severe damages to waterways.[7]
We surmise that regional variation, the complexity of the programs, their changing size and structure, and the unpredictability of policy, weather, input costs, and market pricing make this a difficult area to study – though one that would benefit from added transparency and research.
DeBoe, G. (2020). Impacts of agricultural policies on productivity and sustainability performance in agriculture: A literature review, OECD Food, Agriculture and Fisheries Papers, No. 141, OECD Publishing, Paris, pp. 32-35.
Weber, J. G., et al., (2016). Does federal crop insurance make environmental externalities from agriculture worse? Journal of the Association of Environmental and Resource Economists, 3(3), 707-742. p. 739. [“Policies with nonenvironmental goals can cause unintended environmental harm. Using a novel data set and identification strategy, we find that federal crop insurance does not appear to fall into this category despite several past studies suggesting otherwise.”]
LaFrance, J. T, et al., (2001). The Environmental Impacts of Subsidized Crop Insurance. UC Berkeley: Department of Agricultural and Resource Economics, p. 15. [“We conclude that under reasonable conditions, subsidized crop insurance creates incentives to utilize greater quantities of marginal quality land.” Also points to earlier reports that reach the same conclusion.]
Classen, Roger, et al., (2011) Grassland to Cropland Conversion in the Northern Plains: The Role of Crop Insurance, Commodity, and Disaster Programs, USDA Economic Research Service, ERR-120, p. 1. [Analyzing the conversion of native grasslands to cropland, “…the benefits of crop insurance, disaster assistance, and marketing loans increased cropland acreage by about 2.9 percent between 1998 and 2007.”]
Lubowski, R. N., et al., (2006). Environmental effects of agricultural land-use change: The role of economics and policy. USDA ERS, Rpt. No. 25, p. 47 and 51. [“While the insurance policy change is estimated to affect just about 1 percent of total cultivated cropland, the increase in insurance subsidies appears to have had the largest effect for low-productivity and certain environmentally sensitive land … Estimated lands in cultivation due to the increase in crop insurance subsidies include some areas with high populations of imperiled wildlife species.”]
Cox, C., et al., (2015). Boondoggle: Prevented Planting Insurance Plows Up Wetlands, Wastes $ Billions. Environmental Working Group.
See, for example, Animal Ag’s Contributions to Water Pollution