WASHINGTON, Feb. 18, 2026 - Efforts to translate President Trump's America First agenda into concrete Buy American policies for U.S. agriculture are facing setbacks in Congress and within USDA, leaving producers of fruits, vegetables, cotton and grains without the domestic demand boost they had hoped for. While new school meal sourcing limits were set to tighten this year, USDA waivers and stalled tax incentive bills have slowed momentum at a time of heightened supply chain competition and pressure on commodity prices.

In 2024, the outgoing Biden administration finalized rules limiting non-domestic foods in school meals to 10% for the 2025-2026 school year, with caps tightening to 8% by 2028-2029 and 5% by 2031-2032. The policy was widely viewed as a win for U.S. specialty crop and commodity producers seeking more reliable institutional demand.

However, in February 2025, USDA under the Trump administration allowed states to request waivers for the 2025-2026 school year at the urging of school districts citing procurement and cost concerns. The department has not yet clarified its plans for the upcoming 2026-2027 year.

The School Nutrition Association (SNA), representing district food officials, has pressed USDA to continue flexibility. A survey conducted last fall found 30% of districts viewed Buy American requirements as a significant concern and 56% as a moderate challenge. Smaller districts reported greater strain, citing higher food costs and record-keeping burdens.

Distributors sometimes substitute imported produce - such as grapes - even when schools request domestic product, requiring additional documentation. Industry representatives argue the administrative load and supply inconsistencies complicate compliance.

Oats and Import Dependence Highlight Supply Gaps

One challenge frequently cited involves oat-based cereals. The majority of oats used in U.S. food manufacturing are grown in Canada, which supplies roughly 96% of the U.S. oat import market. Concerns about availability and pricing have fueled arguments for waiver flexibility.

For processors and growers, however, waivers risk undermining long-term domestic investment signals. Rich Hudgins, president and CEO of the California Canning Peach Association, warned that processed fruit is already losing market share to imports from countries such as China.

"My belief is that processed fruit is the canary in the coal mine," Hudgins said, arguing that fresh produce and other sectors could face similar erosion without corrective policy action.

Parallel efforts to create tax incentives for domestic sourcing also face headwinds on Capitol Hill. The proposed Grown in America Act would provide a 25% tax credit for companies purchasing U.S.-grown commodities instead of imports. Eligibility would begin at 50% domestic sourcing and gradually increase to 85%.

An analysis by Texas A&M University economists estimates the measure would cost $13 billion over 10 years while generating nearly $2.4 billion annually in economic output and supporting about 7,000 jobs per year.

Supporters argue the credit would strengthen supply chains and reduce reliance on foreign inputs at a time of geopolitical uncertainty. The coalition backing the bill includes rice, wheat, barley, sorghum and catfish groups, along with food manufacturers and business associations.

A separate proposal, the Buying American Cotton Act, would provide tax credits to apparel manufacturers using U.S. cotton. Roughly 80% of U.S. cotton is exported for textile production, much of which returns to the U.S. market as finished garments. Advocates contend the credit would incentivize more domestic textile manufacturing and potentially lift cotton prices, reducing reliance on farm program payments.

Despite bipartisan interest in strengthening domestic supply chains, moving legislation through a narrowly divided Congress remains difficult, particularly in an election cycle. Meanwhile, USDA faces pressure from both producers seeking stricter enforcement and school districts concerned about cost escalation and nutrition standards.

The broader debate reflects a tension within agricultural policy: promoting domestic consumption while maintaining affordability and trade relationships.

For fruit growers, cotton producers and grain farmers already coping with volatile yields, fluctuating commodity prices and uncertain export markets, Buy American policies represent more than symbolism - they are seen as potential demand drivers in a tightening farm economy.

Whether Washington can convert America First messaging into durable procurement rules and tax incentives may determine how much domestic agriculture benefits from future federal policy shifts.