How a new Farm Bill’s SNAP cuts could affect retailers

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Remember our multi-part series on the 2023 Farm Bill three years ago? Well, as it played out, there never was a 2023 Farm Bill. Lacking the votes to get a new one over the line, the 2018 Farm Bill has instead been extended three times, with the bill now set to expire this September.

This year, there’s finally been movement on a new Farm Bill—which, in case you forgot, is a food and agriculture megabill (typically) passed every five years. In late April, the House passed a $390 billion Farm Bill.

The bill now heads to the Senate, and will likely face Democratic opposition, as it codifies $187 billion in cuts in the Supplemental Nutrition Assistance Program (SNAP)—the largest-ever cut in SNAP funding, established in President Trump’s One Big Beautiful Bill Act (OBBBA) passed last July. Solidifying the historical cuts for the next five years could have considerable impacts on consumers, retailers, and local economies, as SNAP participation has already fallen by 8% (or more than 3 million people) between the OBBBA’s passage and January 2026, and could continue to decline.

That could have ripple effects across the economy. Every $1 in SNAP benefits produces $1.50–$1.80 in economic activity, Sara Bleich, professor of health policy at Harvard T.H. Chan School of Public Health, said in November.

And SNAP households make up 12% of grocery sales, per the National Grocers Association. During a lapse in SNAP funding last fall, recipients’ household grocery spending dropped by 10% during the weeks of October 5 to October 26, Numerator reported. Ahead of OBBBA’s passage last year, the Center for American Progress found SNAP cuts could put more than 27,000 retailers—including Walmart, Target, Albertsons, and Dollar General locations—at risk of financial burden.

State of flux: The OBBBA shifted a chunk of financial responsibility for SNAP from federal to state governments. States, which previously didn’t contribute to SNAP allotments, must pay for up to 15% of SNAP benefits if their error rate (the accuracy of SNAP benefit calculation and distribution by states) is equal to or above 6%, starting in fiscal year 2028. And beginning in October, states’ administrative costs for SNAP will jump from 50% to 75%. Both shifts in state responsibilities will require states to spend, on average, 202% more of their budgets on SNAP, Georgetown Law’s Center on Poverty and Inequality found.

The OBBBA also limited SNAP eligibility for many immigrants, and added new work requirements for several groups, which could drop SNAP participation by 2.4 million people through 2034, per the Congressional Budget Office.

Money off the table: As a result of these changes, the CBO said that some states might “modify benefits or eligibility or leave the program altogether,” estimating 300,000 SNAP recipients’ benefits could be eliminated on an average month over the six-year period.

Some new SNAP changes in the House’s Farm Bill have been well received, like a permanent bar on EBT processing fees and making the SNAP Online Purchasing Pilot permanent nationwide, by the National Association of Convenience Stores and the National Grocers Association.

Alongside the cuts, those moves are like “putting a Band-Aid on a shotgun wound,” Gina Plata-Nino, SNAP director at nonprofit Food Research & Advocacy Center (FRAC), said. She told Retail Brew that prior to OBBBA’s passage, FRAC had hoped this iteration of the Farm Bill would “protect and strengthen SNAP.” Now, it’s added the hope of “restoration,” so SNAP cuts won’t be set in stone for the next five years.

“It will have a detrimental impact, not just on individuals, but on whole communities and society and government,” Plata-Nino said, adding, “In food policy, there shouldn’t be winners and losers. The whole of America should be benefiting from this.”

What’s next? The Senate will now take up the Farm Bill, which will need bipartisan support to reach the 60 votes needed to send it to President Trump’s desk. Democrats on the Senate Committee on Agriculture, Nutrition, and Forestry said they’re particularly focused on “delaying the new SNAP cost shifts.”