Arizona’s more than 16,000 farms and ranches, the backbone of the state’s agricultural economy, are bracing for a potential $5,125 per year tax increase if the U.S. Congress fails to extend key provisions of the 2017 Tax Cuts and Jobs Act (TCJA), set to expire at the end of 2025. A recent Market Intel analysis by American Farm Bureau Federation (AFBF) economists warns that without action, America’s farmers and ranchers, including those across Arizona’s diverse landscapes, could face a collective $9 billion annual spike in federal taxes, threatening the viability of rural communities from Yuma to the northern plains.

“Arizona farmers and ranchers call upon Congress to keep taxes low and business deductions in place,” said Arizona Farm Bureau President John Boelts, a Yuma produce farmer. “These are challenging times for consumers and producers of agricultural goods alike. We all would appreciate the certainty of keeping taxes low.” 

The 2022 Census of Agriculture counts 16,710 farms and ranches in Arizona, spanning over 25 million acres and producing everything from lettuce and melons in the desert southwest to dairy and cattle in the central and northern regions. These operations, vital to feeding families and fueling the state’s $30.9 billion agricultural economy, now face uncertainty.

“The size of a federal tax bill can make or break farm profitability, particularly for small farms on the brink of breaking even,” the AFBF’s Market Intel report states. For Arizona’s farm families, each dollar diverted to taxes means less to invest in equipment, irrigation upgrades, or local businesses in towns like Buckeye, Willcox, and beyond.

Key TCJA provisions at risk include capital expense deductions, critical for purchasing tractors or improving water systems in Arizona’s arid climate; qualified business income deductions, a lifeline for small operators; and estate tax relief, essential for passing farms to the next generation. Without these, the average Arizona farm could see an extra $5,125 in taxes annually, a burden that hits hard as input costs rise and commodity prices slump, according to AFBF’s economic team.

“Farm families, like all families in America, are struggling with higher prices,” said American Farm Bureau President Zippy Duvall. “Farmers’ paychecks have shrunk at the same time because what they’re paid for their product has bottomed out, threatening the economic sustainability of rural America.”

Arizona’s 16,710 farms and ranches—95% family-run and supporting new and beginning farmers (nearly 1 in 4 producers) or veterans (over 2,000 producers)—stand to lose big. The report estimates agriculture nationwide could shed 49,000 jobs, including positions in Arizona, equaling $3 billion in lost wages. In a state where vegetable and melon farming, cattle ranching, and dairy drive jobs from Yuma’s fields to the Phoenix metro area, such cuts could ripple through rural communities, hitting workers, suppliers, and local economies hard.

“Congress now has the opportunity to provide some stability for the men and women who work every day to ensure pantries are stocked for families across our country,” Duvall added. For Arizona’s more than 16,000 farms and ranches, extending the TCJA provisions is critical to sustaining operations that grow food, fiber, and fuel, from the border hub of Nogales to the tribal lands and public ranches of the north. Without action, the future of Arizona agriculture hangs in the balance.